Mark Tomko admits he’s a risk-taker. But after weathering the storm and surviving a serious revenue hit, Metco Landscape’s rebound is more balanced.
“To this day, I know nothing about landscaping,” says Mark Tomko, CEO of Metco Landscape in Denver, a $28-million firm that has landscaped 32,000 new homes. The company captures 40 percent of the homebuilding market in that region, not to mention a thriving $11 million maintenance and snow division that has quadrupled in growth since the economic downturn in 2006.
But anyway, Tomko knows nothing about landscaping. He left his career as a stockbroker after the 1987 market crash and began mowing lawns.
After 28 years in the business and growing his firm to $33 million with a staff of 450 at its peak in 2005, has learned everything the hard way.
“My business has always been based on customer service. That’s my passion,” he says. “I really just knew nothing – I didn’t even know what a walk-behind mower was, I only knew what a 21-inch mower was.”
Here’s what Tomko always did right: He showed up on time, he did what he said he was going to do, he built trusted relationships with clients, and he recruited a staff of people who are skilled and motivated to grow with the company.
In that time, Metco has escalated from a homegrown business to a market leader, managing some real bumps along the way. The biggest was in 2009 when the firm’s revenues plummeted by half, down to $14 million.
“It was quite a ride,” Tomko says. “But we learned a lot of lessons.”
Crunching the Numbers.
Metco was founded in 1997, but Tomko says it “started being a real company” in 2000. That’s when he began to focus in on the two hallmarks of what separate his business from the pack: strong numbers and skilled people.
Eye on the numbers
Mark Tomko is a stickler about watching his numbers. He posts budgets and actuals at Metco Landscape in Denver, so his employees have a clear view of the company’s financial state.
“Everyone sees the numbers,” says Tomko, CEO. “We post those numbers everywhere and we celebrate all of our wins, and if we lose, we learn.”
Here are some strategies Tomko recommends companies use to help them engage their entire team in working toward a common goal of financial success.
Weekly checkup. Every week, department heads report on their revenue and payroll and materials expenses. Then, when budgets are set up at the beginning of each month, Tomko can project exactly what the company should be spending and earning every day, week and month.
Focus on the variables. “So the variables like payroll and materials are two numbers you can really control,” Tomko says. He monitors those weekly, meets with department heads to compare budgets and actuals, and relies on those heads to communicate budget information down the chain.
Meet and review. Every month, project managers and office personnel meet to review the company’s numbers and forecast the upcoming month. “Everyone is all about the numbers,” Tomko emphasizes, adding, “We also have a lot of fun.”
What sparked the more professional business approach? “My son was born in 1998, and I said, ‘Gee, you’ve got to start getting serious now because you’ve got a family,’” Tomko says. “And, we owed a lot of people a lot of money. We were virtually broke in the year 2000.”
Metco had $300,000 in debt and $8,000 in the bank that year. In one year, Metco paid off $200,000 of that debt, and in 2002 the balance was back to zero. He started watching every dollar that came in and out of the business. “And, we had an extra $350,000, so that was when the ball started rolling.”
In 2001, Metco did $3.2 million in revenue. The firm closed 2006 with $33 million because of the housing market boom. Metco became the go-to for the area’s key builders, which were planting subdivisions en masse. “We could never keep our systems ahead of our growth,” Tomko says of those years.
But what Metco did right was watch the numbers – and anticipate the downturn. Tomko halted equipment purchases in 2006 – a bold move since the firm would buy $1.5 to $2 million in equipment each years. During that time, a number of builder customers went bankrupt. But Metco cut expenditures, trimmed down the staff and kept an eye on payroll and materials expenses.
Balancing the Mix.
Metco Landscape operates four distinct divisions: maintenance and snow, custom (residential design/build), a commercial division and homebuilder department. Before the housing market crashed, that maintenance division was about 25 percent of the overall business.
But establishing more stability during a time when homebuilding contracts were lead was absolutely critical to Metco’s survival.
“Our game plan is to be one-third maintenance, one-third commercial and one-third homebuilder work,” Tomko says.
Now, Metco is pricing better, too. “We are not afraid to lose work on price anymore,” he says. “Back then, we’d take work at any price, and no we said, ‘Wait, this is the price. If you don’t like it, you can go to Google and find someone else.’”
Gearing Up Again.
Now that Metco is swiftly growing once again, Tomko is gearing up for a $32 million year in 2014.
This time, Tomko is in the office. He now has four salespeople and two vice presidents on board.
Is he afraid to dive in after falling so hard?
“We can sense when things change,” Tomko says of the economy. “It doesn’t bother us, and we let that tide take us where it takes us. We are ready to run it again and see how it goes.”