COVER STORY: Know Your Strengths

Jeff Tobias isn’t like most design/build business owners – and he’ll tell you that right away. “I don’t run my business like most people do,” says the owner of Calabasas, Calif-based Landscapes By Jeffery. “I do things a little differently.”
 
By differently, he means his laid-back, California-cool attitude translates to his business. For example, he doesn’t work by a rigid schedule. He gets up in the morning, gets in his truck, and goes wherever he’s needed.
 
He means he doesn’t have a methodical system for design – he doesn’t use consultation questionnaires and nine times out of 10 he works without a landscape plan. 
 
Tobias doesn’t refer to himself as a landscape designer – though he designs award-winning outdoor environments. He acknowledges he doesn’t have sharp business acumen, either.  But Landscapes By Jeffery is a profitable, 22-year-old award-winning firm with a high-end client list and niche services like building and maintaining avocado groves and vineyards.
 
How does he do it? “I’ve paid my dues – I’ve learned from my mistakes,” Tobias says. “Once burned, twice shy.” He learned a few difficult lessons early on that made him change his business for the better.

HARD TIMES. A decade ago Tobias landed in quite a bind. He had concentrated about 75 percent of his work with one home developer. The Southern California real estate market was “cranking,” and Landscapes By Jeffery, his 12-year-old company, was doing well as a result with several hundred thousand dollars in annual revenue. And then one day the developer packed up and left town. The client owed Tobias $150,000.
 
Tobias’ business faltered – at one point he owed an irrigation supplier $60,000, and he struggled with family difficulties, too. His father was sick thousands of miles away and his wife, who has multiple sclerosis, was in the middle of a difficult pregnancy.
 
Tobias’ attorney told him there was only one thing he could do if he wanted to stay in the landscape business the rest of his career: Pay down his debt and focus on earning steady income.
 
“He said to set up payment plans with all the vendors, drop your installation work and service the hell out of your maintenance clients – they will be the ones that will pick you back up when you get out of this,” Tobias says.
 
That’s what he did. After his son was born he was able to take on installation work again. Before long, the company bounced back. “He was my four-leaf cover,” Tobias says. “We went from doing a few hundred thousand dollars to $3.5 million in 2007.”
 
But it wasn’t just luck that launched Landscapes By Jeffery to an award-winning, company with 55 employees. Tobias learned several significant lessons during that dark period in his business. Today he lives by two words: diversify and delegate.

DIVERSIFY. The failed developer rela-tionship showed Tobias he can’t concentrate his business with one customer, no matter how lucrative it seems in the short term. “Now I always say it’s better to have 10 jobs for $1,000 apiece than one job for $10,000. You can’t put all your eggs in one basket.”
 
Today, Landscapes By Jeffery is split between design/build and maintenance. The installation side typically has three to five residential jobs going while the maintenance division services about 90 accounts.
 
In the name of diversity, a few key clients have allowed Tobias to branch out into atypical landscape services, like installing avocado orchards, vineyards and horse ranches. These opportunities, while challenging and highly specialized, provide the company with some stability during potential economic slowdowns, Tobias says.
 
Over the years, Tobias has recognized his strengths and weaknesses. “The business end is a nightmare for me,” he says.

DELEGATE. Ten years ago, Tobias tapped his brother-in-law – a certified public accountant – to be his outsourced CFO. “Everything goes through him,” he says.  “All of the banking, billing, taxes. I don’t have to come home at night and figure out my billing or payroll or anything like that. All my contractor buddies are jealous because they say it’s the killer in their business.” To finance this arrangement, Tobias and his brother-in-law have worked out a trade agreement – financial services for landscaping. Tobias also pays the firm several thousand dollars a year when there’s an imbalance between services rendered.
 
Several years ago, at the suggestion of a client, Tobias began outsourcing human resources to an employee leasing firm. This company does workman’s comp, payroll and payroll taxes for Landscapes By Jeffery. He also enlisted the leasing company to write a custom English/Spanish employee manual and he uses the firm to verify potential employees’ work eligibility.
 
The sticker price of working with such a company can be high, but Tobias says it pays for itself because of the discounts he gets in payroll and workman’s comp. “My rate on contractors’ insurance went down five or six percent,” he says. “With that percentage of savings in workman’s comp, you could say it doesn’t cost me anything from the way I used to do business.”
 
The moves Tobias has made to outsource administrative duties have helped the company grow 10 to 20 percent per year since 2004. They’ve also freed up Tobias to do the part of his job he loves and excels at – the aesthetic side.
 
Tobias is the firm’s only designer and estimator. Though he doesn’t have formal training in landscape design or architecture, he has a degree in agronomy. This background affords him the right plant/right place knowledge to excel at creating landscapes. Starting at 4:30 or 5 a.m., he spends his days researching and creating designs, estimating jobs and meeting with clients.

DECENTRALIZE. Internally, a decentralized management system frees up Tobias’ time and empowers division managers to make decisions. As long as they meet their budgets, the installation and maintenance managers have complete control over hiring, firing and setting wages in their respective divisions. “They’re the ones who come into direct contact with the employees on a daily basis,” Tobias says. “They’re more adept at knowing if guys need five-cent or five-dollar raises than I am.”
        
Part of the reason he trusts these supervisors is their tenure  – one has been with him since the start 22 years ago. The other has been with him for 19 years.
 
In the last year and a half, Tobias has also delegated quality control. The goal is to provide better service to his demanding clientele, the majority of whom live in multi-million dollar homes within five gated communities in Southern California.
 
When clients are paying $600 per hour for a five-man maintenance crew to tend to their properties, they demand perfection. To reach their standards, Tobias promoted a detail-oriented, highly skilled, 14-year employee to quality control supervisor. He wears a different uniform than the rest of the crews with a special “quality control” patch on his sleeve. He rotates among the maintenance crews, joining each of them for a week at a time to ensure quality and to train less experienced employees in the field if necessary.  “The clients really like it,” he says. “It’s something different and they know they’re getting good service.”  PLD