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Turnaround Tour - Turnaround Tour

An Oklahoma couple wants to take their company to the next level.

January 31, 2017

Jeremy & Heather Dirksen: This husband-and-wife team run a $500,000 lawn care company. They are growing and working very hard, but don’t know how to pay themselves and are not seeing a financial return on their sweat equity.
© Jon Arman

Jeremy Dirksen started Freedom Lawn Care while he was in high school and ran it for 13 years, providing lawn maintenance. Dirksen did everything at the company: mowing, billing, selling new work. But he couldn’t fathom any type of growth since he was struggling to meet his current demand and wasn’t sure how he could service any more accounts.

Jeremy and Heather met at an airfield in 2013 (she was working as general manager and he was helping a friend wrench on his jet), and married two years later. With Heather’s landscaping background and business acumen, they bought a small lawn care company for its equipment and customer list in late 2015. They added a few commercial accounts and brought on an additional crew, added irrigation system maintenance and brought landscape installation work in house. Now Freedom Lawn and Landscapes, with Heather as CEO and Jeremy as director of operations, has four seasonal employees (including Jeremy’s brother, Ryan, on irrigation repairs) and one part-timer (Jeremy’s mother, Cherry, who works in the office once a week).

In 2016, the full-service company posted revenue of $498,632, performing mostly residential lawn care and landscape maintenance, and has been steadily growing, but has struggled with cash flow and managing overtime.

As they wrote in their Turnaround Tour application: “Although all of this sounds like a great success story, (we) are finding it difficult at times to pay (ourselves) To cut costs and improve their bottom line, (we) have been vigilant about preventing overtime and began doing a larger portion of the field work on (our) own. It has come to the point where (we) are considering getting second jobs on the weekend. (We) know that just working harder is not the answer. (We’ve) done that.

“(We) need your help to grow successfully and to strategically plan what’s next. (We) feel like (we) have exhausted (our) ideas and (we) need your expertise.

“(We) are humble people and will do what (we) are ordered to do – both veterans of the armed service … that type of environment is where (we) function best. (We) know what it’s like to make sacrifices for the greater good and (we) give everything they do their all.”

Their goals for 2016:

In their application for the Turnaround Tour, Heather and Jeremy said they wanted to double their 2015 gross revenue ($336,000) in the next year, manage their cash flow better and ultimately do more selling and less production work in the field. After meeting with Arman and Laflamme, issues immediately became clear.

“We were just operating day to day, and not looking forward too much. Working with Bill and Ed, you can take a step back and look at everything. They tell you step by step, ‘This is what needs to be done, but this is most important,’” Heather says. “(We want) systems in place for everything we do, cleaning up the operations and working as a more lean company than what we were. We’ve already started making so much headway.”

Some of that headway includes a decision to get rid of half a dozen residential accounts and two large commercial accounts that aren’t profitable. It will mean a loss of about $100,000, but help them realize a higher gross profit margin in the coming years.

Harvester assessment:

Arman and Laflamme recommend first an investment in equipment, specifically trucks, so the Dirksens can look as good as the jobs they’re doing.

“They’re afraid to spend money because they’re not making money,” Laflamme says. “I get that, but then what happens is it gets to a point … and starts to cost more than if you buy new stuff. We’re encouraging them to fix the stuff that needs to be fixed – get the trucks painted and get them consistent. Maybe invest in one truck. You have to look good, you know?”

Arman says Freedom needs to reevaluate its margins on each job individually and improve its estimating so it only works on profitable accounts.

“It has come to the point where We are considering getting second jobs on the weekend. We know that just working harder is not the answer.” Heather Dirksen, CEO

“The margins aren’t enough to sustain a business. They had three or four jobs that were upside down,” he says. “If we don’t have enough gross margin we can’t even feed the bear.”

As Freedom eliminates unprofitable work, Arman and Laflamme both recommend more commercial work to balance out the business, but they disagree on how far to take it.

“Bill is pretty much a 90 percent commercial guy, and I’m more a 75 percent commercial guy, but they’ve been doing mainly residential and feel comfortable there,” Laflamme says. “Commercial is out of their comfort zone. My idea is: Let’s go after both and see what happens. It won’t hurt.”