You can sell a million and not make a dime.
This is one of several hard-won lessons Nate Moses learned while growing Precision Landscape Management in Greenville, S.C. In 2016, after pushing past a milestone fifth anniversary for the business, Moses was coming off a year of $550,000 in revenue and committed to doubling that. “That was the year I knew I wanted to build this company to be about more than just myself and some employees,” he says, reflecting back to the rapid climb from $20,000 in 2010. “I wanted to grow a team and an organization that hopefully would outlast me.”
He hired a construction manager to expand the landscape design/build division, which was about 30% of the mostly maintenance business at the time. The plan worked, and by the end of 2016, Precision Landscape Management’s construction jobs accounted for half of the company’s revenue.
“But in 2016, the profit was negative,” Moses says.
Grinding, growing — acquiring new customers, sure. But there was nothing left to reinvest in the business. “We weren’t pricing our jobs correctly or tracking the hours allocated to jobs,” Moses says, admitting the year-end result was “pretty painful.”
“I realize I needed to change,” Moses says, “and as the leader of the company, I was the only one responsible for creating that change. I was the one responsible for the mistakes and if we were going to get this thing figured out, I needed to grow before I could expect anyone else at the company to do the right thing.”
Moses is admittedly impatient to succeed.
But he turned the ship around and finally in November 2021, achieved the first month of profit exceeding 20%. “The changes we made really paid off,” says Moses, an eternal optimist who says, “I can fail today and tomorrow I’m ready to just go get it done again. And I take each failure, mistake and setback and try to remove myself from the situation to look at it and say, ‘How can we learn so it doesn’t happen again?’”
$1 Million—and a Profit Flop
Rewind to 2010 when Moses, then 22, took the leap from running a part-time maintenance service while working another job and formalizing Precision Landscape Management. He had been mowing lawns since he was 12 at home in Michigan and went on to Bob Jones University, a Christian liberal arts school in South Carolina. He graduated in 2008 and continued caring for some local residences during the recession. Then, the market began to rebound and Moses — young and confident — figured he could grow a business.
“In the early years, we really didn’t know about numbers or how to structure and organize a business,” he says, adding that “grit and hustle to make it happen” is what drove him to grow to $250,000 by 2013. By 2015, Precision Landscape Management closed out a $550,000 year and Moses had his eye on a sought-after milestone: breaking the $1 million mark.
The problem was, with all the hustle, there were crews working, equipment running and invoices batched out to customers. Job costing and people management fell short while the team raced ahead.
Aside from not pricing jobs for profitability, Moses says a key mistake was neglecting to clarify staff roles and responsibilities. “I gave them a lot of freedom and held little accountability, and since I provided little to no direction, they did what they thought was best,” Moses says, quickly adding, “I don’t mean to say they were intentionally not doing their best. As a leader, I didn’t provide the clarity they needed to operate.”
Basically, Moses’ idea of best and many employees’ concept of quality did not align.
A dramatic reset was in order.
In 2016, Moses attended an industry event. He became a sponge and sat in on sessions, taking notes and networking with other professionals. And he did something quite challenging for growth-driven entrepreneurs: He asked for help.
“To fix people and process issues, it takes objectivity, and that is incredibly challenging because, as owners, we tend to get emotionally attached to our businesses,” Moses says. “The grit and ability to figure out something out of nothing is what sets entrepreneurs apart, but in order to grow beyond yourself as an organization, you really have to ask for help, whether from mentors or by reading books or attending classes.”
Moses points to a few impactful books: Covey’s The Speed of Trust, Wickman’s Traction and Crabtree’s Simple Numbers, Straight Talk, Big Profits! He continued attending conferences, joined a peer group and consulted with industry advisors to gain insight on how to stage a dramatic U-turn after a no-profit year.
One people process he put into place was copied from Traction. Initially, he began defining very detailed job descriptions. But the book suggested focusing on the top five tasks or roles you want a position to manage. “During the course of the day, week or year, there might be other things the person does that are outside of that top five, but we used this as a base because we felt that giving a person five things to focus on would help them be successful in their positions,” Moses says.
Digging into the numbers was also a priority area of business. Moses was facing a multi-faceted challenge: continuing on a growth trajectory while developing processes, defining roles and reworking pricing. Digging into the data, Moses realized that he was underestimating direct costs such as labor and materials. “We had to make sure that we were paying attention to overhead and direct costs, and we started paying closer attention to expenses and understanding benchmarks in our industry to help us know what we should be targeting,” he says.
With these tweaks, the company began achieving single-digit profit margins. Moses says, “Our profitability in 2017 and 2018 still wasn’t great because we were spending a lot of money on the organization and resources, training staff and acquiring equipment. But at least we were profitable.”
And, in fact, the business still was growing swiftly because in 2019, Precision Landscape Management finished the year at $2.4 million, up 60% from the prior year. During that time, Moses was developing crew leaders who were capable of climbing in the organization by assigning them to oversee a couple of crews. “That way, I didn’t have to be so hands-on with crews,” he says.
Combining in-house, on-the-job training with resources from the National Association of Landscape Professionals gave employees direction and more of a career path because they could see how achieving skills and goals led to more responsibilities. Also, Moses joined a peer group and networked with other professionals at industry trade shows and conferences. “You can’t ask for help too soon,” he says, relating that listening to how other established companies provide training and education helped him prioritize and deliver programs at Precision Landscape Management.
The construction division continued to flourish, attracting new business. In 2019, now-operations manager Brian Gray came on board, bringing plant healthcare expertise as a certified arborist.
“I presented Nate with the opportunity to start a plant health care division — they were already doing lawn and turf care, so he liked the idea,” Gray says, adding that he and Moses knew each other from working in the same South Carolina market.
The jobs were rolling in and so were revenues, but still, Moses had not met his target profitability goal in 2019, which was 10%. “It takes one mindset to hit $1 million and another mentality to do $2 or $2.5 million,” he says.
A U-Turn and Focus
A process mindset is what Moses needed to establish in 2019, along with making some tough decisions about what type of work he really wanted to perform — which jobs would yield favorable profits. It was time to say, “No, thank you,” and offer referrals to customers and prospects who wanted services like one-off mowing jobs, clean-ups without long-term contracts and minor construction projects.
“We took a lot of things off of our plate,” Moses says of a scale-back initiative. “Before, we would take on a $500 project to clean up or do mulch and the time invested didn’t make sense,” he says.
Moses started saying no to commercial properties, too. “We decided to stay strictly residential because we feel with the time and energy we put into customer relationship, for a lot of commercial customers it can be just about the bottom line and that’s understandable,” he says. “But we didn’t want to build our business around that model.”
High-end residential clients living in $800,000-ish homes are the sweet spot for Precision Landscape Management. “They are not going to want to be involved in anything outdoors, and they want to trust one company that can handle all of those needs,” Moses says.
What did existing customers who didn’t fit that profile think?
“I think they were impressed that we knew what we were good at and what we were not good at, and they were either willing to change the scope or take a referral,” he says, speaking to those who would hire the company to do a little project here and there. “Or, they’d maybe use the referral and come back to us.”
By this time, Precision Landscape had a couple of fulltime salespeople and Moses had shifted into a CEO role with Gray rising to operations manager. “I was still involved, but more there to provide support and guidance to staff as they faced decisions they needed to make or tasks they needed to accomplish that maybe they were not as familiar with,” Moses says.
A continued focus on training and development created career paths for team members. And, a close eye on numbers with consultation from outside advisers kept the business on a track toward improved profitability.
By 2020, the company had grown a healthy 34% over the previous year — then COVID-19 hit. During this time, customers’ attention was even more concentrated on the outdoors and Precision Landscape had refined its target customer. Gray says, “Clients have been at their houses noticing ways they want to improve, so we’d speak to them on site, answer their questions.”
Gray speaks to his own development under Moses’ leadership and the company’s newfound processes and procedures.
“When I moved into the operations manager role, it gave me a broader vision of what it’s like to run and grow a company, and the one thing me and Nate have learned together is that we need to have patience,” he says.
“We tend to want things right now and if we say we are going to do something, we want to see the results quickly. During the past year, especially with COVID, we realize that making changes within a company to be better and adding new services takes time and patience to see the results of hard work.”
A Move—Ahead Strategy
Precision is an apt name for a business that is on a journey to refine and redefine how it operates. During the past year, the company decided to pass on construction jobs that would bill less than $10,000. “Maybe our enhancement team would handle it, but for a construction project, it needs to be a minimum of $10,000 and have a defined landscape drawing,” Moses says.
In 2021, Moses recruited a salesperson with landscape design experience. Now, all construction jobs are predicated with a formal client consultation followed by a landscape plan. It’s design/build rather than just build.
Also, the company increased its labor rates to stay competitive in a market where finding great people — as is the case in most areas of the country — is a real challenge. But with higher standards for what Precision Landscape would say “yes” to and a defined target customer, they could charge what the service was worth and stop accepting one-off jobs. In 2021, the company grew revenue a conservative 10% while focusing on what mattered most. And finally, Precision Landscape is achieving the double-digit profit margin Moses had his sights on more than a decade ago.
Growth is on the horizon. Gray says, “We want to be able to move into new markets close to our area as we expand, where we can take our culture and processes and plant ourselves and our vision.”
Today, the business employs about 40 people and generated $3.6 million in revenue and poised to grow by 25% in 2022.
By peeling back issues “like an onion,” Moses says a long-term restructuring is paying off. And the key to success, he thinks, will be to keep evolving and evaluating. “I’m excited about the trajectory we’ve experienced as a company during the past few months, and we are excited to begin a New Year that feels like a new chapter of the company where we’re focused on processes, making decisions based on numbers and continuing to empower our team to make decisions.”