Bill Hildebolt, then-president of PLANET, and ValleyCrest’s Burt Sperber at Executive Forum earlier this year.During the last 60 years, Burt Sperber has grown ValleyCrest Cos. into a billion-dollar, worldwide enterprise. He sat down with then-PLANET President Bill Hildebolt, owner of Nature’s Select Premium Turf Services in Winston-Salem, N.C., at the association’s Executive Forum earlier this year where he talked about the importance of strong financials, how he motivates his teams and why he still thinks of himself as a gardener. – Chuck Bowen
BH: What’s your advice for someone who would like his company to be the next ValleyCrest?
BS: All of us get the opportunity to grow faster than we can afford. Don’t grow faster than you can finance the work yourself. If you’re doing $400,000 a year and someone offers you $1 million worth of maintenance or $1 million worth of construction, you probably have to learn the word – the tough one – “no.” If you can’t finance it, the chances of success are very low. We have not grown very fast at all; the numbers are crazy big today, but anyone can do that if you spend 60 years growing 15 percent a year. We don’t double a year; we grow very slowly. I would say being able to finance your work is the single most important thing and learning how to say no to people who offer you work just because it sounds like a big exciting job.
And don’t get financed by your suppliers. If you’re not bankable and you allow an irrigation distributer or a nursery to finance you, then you’re going to end up in trouble. And you’ll see this year, especially, we’re going to have a lot of failures because the suppliers are going to get hurt very badly this year.
BH: Very sound advice. Any further advice? Some lessons you’ve learned, maybe from a mistake?
BS: I think collecting money is the single most important thing you better learn how to do. A good customer is a customer that pays you. A customer that doesn’t pay is not a good customer. And you shouldn’t treat a bad customer like you treat a good customer. I recall sitting in offices to collect my money and I would deliberately go out and bring a lunch bag and sit in the office and say, “Hey, I can’t go back to my office. I have to wait for you to write a check.” And I wouldn’t leave. There are lots of things you can do to collect your money. You have to tell your customer the rules. He has his rules. You better give him your rules.
BH: Leading on the theme of the economic times, during the past 60 years you have seen a lot of downturns in some areas because of the recession. Obviously, ValleyCrest has come through very well. What would be your advice on how to survive these tough times?
BS: In the construction end of the landscape business, I believe that we’re going to have a very slow recovery as we’ve had in the past. And there’s going to be a lot less work-share. We’re going to have probably 25 to 30 percent of the work that everyone is accustomed to doing a few years ago. And we’re all going to have to share that and that’s going to be difficult for most all of us.
I think our customers are not going to pay for our failures. When we waste money on jobs – our customers aren’t going to pay for that. We have to stay focused very much on doing what you know well and don’t stray. I think you better love what you do and do what you love or this isn’t the business for you. It’s a very good business. You better love it. If you don’t – get out.
You have to treat your people very, very well; treat your people like you want to be treated. So you have to spend a lot of energy caring about your people. The single most important thing that most employees want is training. The training we do is as deep as you can get. Consequently, I think it’s one of the reasons why we’re one of the better places to work in this industry. It’s a career. We have very little turnover issues. We have people who decide that this is the company I want to make a career in. We work very hard to make that happen.
Our customer satisfaction in these times is going to be more important than ever before. We survey every one of our customers. When we start a job, we immediately do a survey to find out if our contract processing was comfortable for them. We found out our customers didn’t like how we processed the contracts. We had to do something a lot different. We have a contracts department in our company that employs 12 people. In our landscape construction, we have 12 people who read contracts. Can you imagine reading a contract? We read contracts. And send them back. With things crossed out. And our customers weren’t very happy about it so we made a bunch of changes to make our customers happier.
There are going to be some companies that go by the wayside; there are going to be some companies that become a lot stronger. Don’t use your supply house as your bank. If your bank won’t loan you money to grow, you probably shouldn’t be growing because I promise you’ll get in trouble from over-expanding. Don’t grow faster than you can afford to grow. It’s easier to walk forward; it’s harder to walk backward. The word “yes” comes out of our mouths a lot easier than the word “no” and you have to learn how to say “no.” We watch our operations very carefully, and if we have management that’s not doing the job right and we’re not having profitable operations, we close. Just like those of you who aren’t doing a good job. Maybe you shouldn’t be in business for yourselves. Just as we close our operations that are not successful.
BH: Looking in your crystal ball and with 60 years of experience, what do you see for the future for ValleyCrest?
BS: I think we will stay the single largest company in this industry. We care about our people. We train our people. We’ll become a $2 billion company in the next five to 10 years, growing at the same rate we were growing during good economic times. It’s just going to take a while to catch up because we’ll probably be flat or have a slight dip this year like a lot of companies in our industry. I think good quality work is desperately important. And we’ll work our tails off to be sure we have very happy customers. I think our customers are learning that we have the ability to do a number of huge jobs simultaneously. We can work in almost any area of the world now and be competitive with anybody local because we have very highly trained people. We’re looking forward to the future being good for our company and hopefully good for the industry in general.
BH: Some of your growth has come from acquisitions. If I were building a business and wanted it to be acquired some day, how would I go about doing that to create the most value for my organization?
BS: First of all, we only buy companies that are maintenance businesses.
Our companies are made up of people. And we spend a lot of time trying to learn about the people in the company. Numbers are numbers. And everybody’s numbers do what the numbers do and some do great and some do fair and some do excellent. We spend as much time understanding the philosophy of the people more than anything else and be sure that they have similar values that we have.
Density in routes is important. If there are new areas that we haven’t been in, we’ll take a good look at them. We spend a lot of time looking at their safety practices. Our modification rates in our company are incredibly good and we want to make sure they have good safety philosophies. Safety is very important.
Probably the No. 1 thing is morals and ethics, and how they do business and how it aligns with how we do business. If a person’s morals and ethics aren’t right, they’re not right for us. We’ll pass a deal if it doesn’t look right for us.
We’ll look in areas that we’re not in. If it’s a major market and a company is for sale, we’ll look at it if it appears to be in the right locations for us. We do surveys of all our customers. We want to make sure with their customers that all that work they do is the same quality that we do. I’ll never forget we had a couple acquisitions in line, and Richard (his son, and president and CEO) called me and said, “Dad, we want to be bigger but we shouldn’t buy this company. Their work is terrible.” And we walked away from it. We’ve done that a couple times.
We think that the quality of work better be good and if you don’t understand how to build a good job or maintain a good job, it’s just not good enough for us.
BH: In recruiting to attract top college graduates, what school programs have proven to be most beneficial to hire from?
BS: We recruit at about 25 schools. Hiring people is one of our toughest jobs, because if we’re going to continue growing, we’re going to need a lot more people. For example, today we are $1 billion and that means we’re not growing this year. To grow just 15 percent – that’s $150 million. You know how many people you need for a $150 million company? You need a lot of people. We work very hard with a lot of schools. We’re a fan of BYU. We’re a fan of the two Cal Polys. We’re a fan of a number of schools where we’ve had scholarships for years. And bringing in people to our company is desperately important and one of the biggest jobs we have.
BH: As a small landscape contractor, what advice could you give us to help us grow?
BS: I think I said it already: Don’t grow faster than you can personally finance. If you can’t cover 100 percent of your costs – that includes overhead – don’t take the job. You’re going to lose money. And to do a job to pay for the job you did last month because you think things are going to get better, you’re just digging a deeper hole. So don’t grow faster than you can finance the work yourself.
BH: What are the barriers to a company like ValleyCrest entering all major markets?
BS: There are no real barriers. We’re looking for maintenance companies that have routes, that have stability, that have good people. And we’ve had a success rate that is just incredible.
When we acquire a company, we will tell the prospective seller, “Here’s a list of the companies that we have acquired and there’s the principal’s name and phone number. Call them all.”
Our industry is a pretty small industry. Everyone knows everyone that we’ve bought. We won’t leave names off. We include every one.
BH: Why do you still call yourself the gardener after all you’ve accomplished?
BS: Because I am. I like the gardening business. I like building gardens. I like taking care of gardens. It’s what I do for a living. Anybody who looks down on it doesn’t understand it – if you’re not proud of the industry, go be a photographer, a banker, a lawyer. I like doing gardens and I think you all should be proud of it. I think in a lot of countries the gardening profession is looked at a lot higher than our country and that’s too bad. All of you should help by telling people you’re a gardener.