A Yard & A Half’s open book policies helped tutor employees for the next stage in business as a co-op.
Imagine a large white board, your staff and an open invitation to share “what’s wrong” with your company. What would your people say? How might their insight influence the way you do business?
Eileen Michaels (bottom right), owner and general manager of A Yard & A Half Landscaping in Waltham, Mass., leads a rap session like this at least once each year. The perspective she gains from staff sometimes sparks new initiatives, and always results in improving the way her 25-year-old firm operates.
“The first time I did this, the whole board was filled and I thought, ‘Wow, I thought things were going pretty good,” says Michaels with a laugh. “It’s good to get input from your people because their perspective can be so different.”
One year, employees agreed upon analyzing how much money was extracted from their paychecks for taxes that they’d like a way to preserve some of those dollars. “They were very interested in trying to get more out of their paychecks,” Michaels says. “So, I said, ‘Are you look for a tax shelter?’ And they said, ‘Yeah.’ So I said, ‘O.K.’ and I thought about that. And then we put in place a Simple IRA retirement program.”
A Yard & A Half matches up to 3 percent of employees’ total wages per year. This non-taxable savings helped workers achieve their goal of taking home more.
The white board has also been marked up with operational changes – like improving the inventory system so materials are in stock when needed. And, there are plenty of wish-list items that get tossed up on the board, too. Like a laundry service for cleaning uniforms in the spring, when the schedule gets hectic. “That’s a long way off, I old them,” Michaels says.
Beyond the white board, Michaels takes her open-book approach to finances and shares the numbers with employees. This practice has been a key driver in her business growth over the years, she says. And, the firm has added an average of one new employee each year since it was founded in 1988.
Ultimately, these practices build a culture that attracts talent and fosters loyalty. “We know the value of a good employee, and we don’t let them go,” says Michaels. “We give them as many benefits as we can to keep them.”
Building the business. When Michaels started the firm, she was leaving a management position and wanted to try something new. She had an MBA and a love of plants, so she started a maintenance company that was a one-woman show (with a Toyota pick-up truck). “I got rolling,” she says. Then, she attended the Radcliffe Landscape Design program and RCC Horticultural Program.
By the fifth year in business, Michaels brought on a landscape designer and began to grow this area of the business. “It was slow at first,” she says. “I wasn’t ever the type to go out and buy all new equipment before I really knew that I had the sales to support it.”
Michaels also grew the business slowly because finding good labor was never easy. The company has had success recruiting hard-working Latino employees who are U.S. citizens – Michaels abandoned the H-2B program several years ago. “We got shut out after spending a fortune, and I said, ‘That’s it,’” she says. A Yard & A Half seeks out people with a great attitude who want to learn the company’s way of providing service, she adds.
Meanwhile, as Michaels’ attuned interest in landscape design and installation prompted growth in this division. “There is creativity involved,” she says of the service. “It is satisfying to start something from nothing and see the end results.”
Today, the business is 72 percent design/build and installation, and 28 percent maintenance. A Yard & A Half markets to two types of design/build “customers”: homeowners, and designers/architects who are looking to partner with a reputable firm to manage installation. For a while, the latter part of the design/build division was really driving this segment’s growth. Michaels networked with designers and architects – most of them working solo – through professional organizations. Once they got to know and trust her, the business snowballed.
“Architects and designers become additional salespeople for us – not that we ask them to, but it’s their word of mouth talking about us to clients that really got us going, and then some residential customers heard about us and contacted us as a result,” Michaels says. “Those two markets reinforce each other.”
Also, A Yard & A Half is a member of COGDesign, the Community Outreach Group for Landscape Designers, which works with charitable organizations. Last year, the company completed a project for the Girls Scouts of America.
These types of projects – and the firm does one each year – send out a positive message to the community. “The synergy is amazing,” Michaels says.
Succeeding with a Co-Op. Michaels is watching a different type of synergy happen in her business these days, as she nears retirement. Her succession plan: to convert A Yard & A Half to a co-op that will be owned by the employee-members she has grown to trust over the years. They’re like family, she says. And now they’re buying the business. “So many of the folks have been on board for 10-plus years, so it would have been extremely difficult for me to sell the company to a stranger and say, ‘O.K., see you all later,’” Michaels says.
Michaels decided on a co-op arrangement as a succession plan. “At first, I think my employees thought it was a crazy idea – then, after listening and collecting more information, there is a core group of about eight people who are really taking the bull by the horns and doing all the work associated with setting up the organization,” she says.
In fact, the group just signed papers to set up the co-op with the state of Massachusetts. The name of the company will stay the same. The employee-members will each own one share of the co-op company. And Michaels will stay on as a board member. “Being an entrepreneur, it’s hard to give up your baby – but I feel like I’m giving it up to my kids,” she says. “It’s really cool, and they are really excited and I know it’s going to be successful for them. It’s an exciting process for us right now.”
Michaels had to find an attorney and accountant who were well-versed in co-op arrangements. And the employees began attending local co-op meeting to learn more. “If you are a cooperative, you want to help other co-ops, so you become part of a community,” Michaels says, adding that some of the firm’s customers are so excited about the arrangement they’ve expressed interest in buying in.
She expects the process to be complete in about a year – and then she’ll go on to teach, travel and check off items on her bucket list. “It’s a dilemma when you’re ‘getting older and want to retire,” Michaels says. “On one hand, I want to retire, on the other hand, it was like, ‘Oh, my God. How am I going to do that?’ But there are places I want to go, things I want to see…” Michaels is keeping her options open.
And as for the continuity of the business, the co-op assures clients and employees of a mutually beneficial “to be continued” for A Yard & A Half. “It’s a win-win,” Michaels says.