In 2012, I believe there’s going to be an opportunity for many of us to grow our companies. I’m not an economist, but the trends I see so far point to a better business climate for all of us. Let’s hope I’m right. And while I hope I’m right, I’m not using “hope” as a strategy to grow Grunder Landscaping Co.
There are all types of strategies that I see green industry companies employ. Some wander aimlessly from client to client, segment to segment, year to year. Others get focused on some days or weeks, lose that focus and then end up lost. But the most successful ones focus on a segment of the industry, clearly identify the client and then work like heck to own that space. This is the strategy I “hope” you’ll use. Let me explain.
The two most successful landscapers I know are Mike Rorie, who started Groundmasters in Cincinnati, Ohio, and sold it a few years ago, and Frank Mariani, who turned his father’s small mowing business into a multi-million-dollar giant north of Chicago. Both of these brilliant entrepreneurs focused on a certain client in a certain market and then went after it and won.
Mike started Groundmasters in 1979 outside of Cincinnati, like many of us did, with a pickup truck and a push mower. Along the way, he found commercial grounds maintenance to be what he understood the best, did the best and made the most money at. (If you ever see Mike on a program at a green industry event, I’d do whatever you have to do to go see him.) He didn’t just get lucky; trust me. His determination is world class and he ran Groundmasters to a point he felt it best to let someone else take it the rest of the way. Today, his company is part of the industry giant Brickman.
Mike grew Groundmasters by turning down the type of work that wasn’t a fit for what he did best. If he got a call to install a pool in someone’s backyard and landscape it, he said no. If he got a call to landscape a mall in Atlanta in the winter, he said no. If he got a call to do any type of work that wasn’t a bull’s-eye for the market he had defined, his team said no.
This incredible focus enabled him to make replication easier to attain. In every step of his business, he was able to keep things simple because the client was clearly defined. They were able to become a specialist instead of a generalist. So, I ask you now, how clearly defined is your client?
Frank’s Mariani Landscape in Lake Bluff, Ill., had a different focus than Groundmasters and it worked – actually still does today, as Frank has not sold out. His focus is high-end landscape design/build and maintenance. And that focus works for him too. If Midway Airport calls Frank and asks him or his team to put in a bid for the snow removal, the answer is no ... make that NO!!!
If a local shopping mall calls them and says they are taking bids and their number one issue in picking a contractor is price, Frank and his team politely say, “no, thank you.” Frank’s laser-like focus in a market has paid him well through the years.
By staying in his sweet spot, Frank’s team has become very good at taking care of the client. He knows what they do well and sells that, not something they don’t do well or don’t enjoy doing. I hope you are getting the lesson this month.
It is so hard in business to say no. We’re coming off a few bad years, ladies and gentlemen; it’s been about surviving, I know. But you must know the client that fits you best.
Pick the ones you enjoy working with, appreciate you and are profitable with. To do anything else is a mistake. Like a mentor of mine told me three years ago when the recession started, “You do in the short term what you would do in the long term and you will be just fine.” Words I have lived by and words that worked. They’ll work for you too; you just have to be focused enough to stick with it.
Now, who is your ideal client? What’s your sweet spot? Focus on those type of clients and prospects and success will be easier to attain.
Marty Grunder is a speaker, consultant and author; he owns Grunder Landscaping Co. See www.martygrunder.com; mail
Rewholesale doesn’t have to be a scary word. Many landscaping companies buy a large majority – if not all – of their plant materials from rewholesalers. If a good rewholesale business is found, the landscaper can save money, time and effort. This issue isn’t so much finding a good rewholesaler but finding the right one that caters to a landscaper’s specific needs. The following are some important questions to ask before choosing which rewholesaler to sign with.
1. What can I buy here? A better question might be what can’t you buy? Buying from one place instead of using multiple sources is easier on the landscaper, says David Whittaker, vice president of Chatham Landscape Services in Marietta, Ga.
“When you’re using a rewholesaler, you’re already paying a markup,” Whittaker says. “So you’re depending on a rewholesaler to carry a wide range of materials. If they don’t have something, I’ll keep calling down the line till I find a source that has everything I need. I don’t want to have to get one thing from here and another from there and pay for partial loads and delivery fees.”
Pastorek Landscaping & Grounds Management in Pennsylvania gets 95 percent of its purchases from a rewholesaler. President Dave Pastorek says it’s important to find someone who is knowledgeable about materials, because you might not realize a small mistake until a few months down the road. He says if a rewholesaler chooses a cheaper option rather than the one asked for, the result can be devastating.
“We do a lot of commercial work and the specs are already drawn up,” Pastorek says. “The difference between two pieces can be big. If you have somebody that doesn’t know what they’re buying, trying to save money, it can change the whole project.”
Whittaker adds that the best rewholesalers have everything you’re looking for.
“A great rewholesale nursery is a one-stop shop that has quality material that you can trust when it hits the ground,” Whittaker says. “It has quality material all of the time, not some of the time.” He says a few bad trees out of 100 can ruin an entire project. “Nothing makes me abandon a rewholesaler more than when I’m on a tight deadline and a few pieces need to be exchanged.”
Rewholesalers aren’t just for basic trees and bushes. Whittaker says he uses rewholesale material for all of Chatham’s larger, commercial projects.
“We are able to use a rewholesaler,” Whittaker says of high-end projects. “But we can only use the (rewholesalers) that understand our business and the quality factor.”
2. What are the costs? Don’t be afraid to negotiate with the rewholesaler. They have the ability to play around with prices because they buy so much material in bulk. Eric Taylor, operations manager of Roundtree Landscaping in Dallas, says negotiating can only benefit you.
“With the way that the economy is, even though it’s wholesale, we’re still trying to get the best deal for the best quality materials. We work with renegotiation,” Taylor says, adding that most rewholesalers give discounts if you buy larger amounts.
“If we buy exclusively from them, what kind of discount price can we get without sacrificing the quality?” Taylor says, noting that to Roundtree price does not trump quality.
Whittaker says it’s important to make sure there is a set pricing structure in place. Inconsistent pricing strategies can ruin a business, he says. For example, if a landscaper buys flowers for $10, and then the next week the rewholesaler increases the price to $12, a $2 variable can be crippling if buying large quantities.
“In a low margin business like landscape, that can be huge,” Whittaker says of the $2 difference. “Set pricing strategies specified for your needs.”
Plant prices aren’t the only thing worth looking in to. The current economic forecast can change the cost of delivery and labor very quickly.
“When gas prices start to shoot up, fees start to go up as well,” Taylor says. “Different wholesalers charge (differently) for deliveries. Some vendors don’t charge too much for delivery. I put all that into consideration when going with someone.”
3. How quickly can I get materials? With projects being signed off on every day, the quicker plans get under way, the better.
Even if a rewholesaler doesn’t have the materials in stock, Taylor says its better to at least have a workable time frame to plan around.
“A bad rewholesaler will just say, ‘Oh, no, I don’t have it.’ They’ll just leave it like that,” he says. “The good ones will say, ‘I don’t have this right now, but I know I have some trucks coming in next week from these nurseries, and I’ll see if I can get it for you.’ They always give me a call back or shoot me an email to keep me updated. ‘Hey I can get this in, but it might be a few weeks,’ or ‘I can get this in tomorrow. Will you be ready?’ They go that extra mile.”
Taylor adds that a good relationship with your rewholesaler can help you find specific items elsewhere.
“I just give them a call and they help me out a lot,” he says. “If they don’t have something, they help me by getting them shipped in for me from someone else. Then I don’t have to get one plant shipped in from Louisiana and deal with the shipping costs.”
4. What if plans change? Sometimes, project start dates can get moved around because of the threat of weather. Taylor says a good rewholesaler will try to work with your flexible schedule.
“If you don’t schedule a delivery ahead of time, their delivery boards fill up,” he says. “The good ones do what they’ve got to do to get that out to you. They take that extra step. It makes my life a whole lot easier. Otherwise, I’m having to drive out there myself and make arrangements.”
Whittaker also says communication is key.
“If they don’t deliver 100 percent of the order, they have to communicate,” he says. “It’s OK, especially if it’s a lengthy job. Mistakes happen, but they have to contact the company as soon as there is an issue. They need to call the buyer and say, ‘We’re not going to deliver on these items,’ so (the buyer) can readjust.”
5. What should I look for? Taylor suggests searching your local area first because rewholesale companies are everywhere. “I would first try out the larger, more established ones that have been in the area for awhile,” he says. “The bigger ones are really good about working with you, and all you’ve got to do is contact them and a salesperson will come out.”
Pastorek says it’s a matter of finding who matches you. “Find a good relationship, a trusting relationship,” he says. “If you don’t feel comfortable, don’t be there.”
Great rewholesalers are “few and far between,” says Whittaker, but they’re an asset to the landscaping industry.
“(Rewholesalers) are a necessary service,” Whittaker says. “When business is slow, and you write a contract today that starts tomorrow, there’s no time to set up deliveries. It’s not practical to go straight to the source.”
The author is a freelance writer based in Cleveland.
You don’t think it will happen to you. A partner wants out and drains the checking account before filing bankruptcy.
A large contractor holds up thousands of dollars of your pay with no remorse.
A business you’ve been servicing for more than a decade starts another LLC and dupes you out of pay.
But you’ve got to consider these worst-case scenarios. Because they do happen – to people like you. “Get an attorney who understands the type of business you are in,” says Matt Caruso, president, Decra-Scape, headquartered in Sterling Heights, Mich. (Caruso was ripped off $10,500 by a contractor who eventually settled on paying 80 cents for every dollar owed.)
And be sure legal contracts are water-tight and leave no room for creative interpretation. The Winlands in Zanesville, Ohio, learned this the hard way when an old partner took advantage of the checkbook.
This month, Lawn & Landscape spoke with three firms who shared how those worst-case legal scenarios can play out in the real business world and how to protect yourself.
Lien law and order
The 68-acre outdoor lifestyle shopping complex was complete, tenants had occupied the high-end storefronts and were paying rent. But Matt Caruso, president, Decra-Scape in Michigan, was still waiting for $60,000 owed to him for the expansive hardscaping work his team performed.
“It was disheartening to see people walking in and out of stores knowing that the company was sitting on sixty grand of your money,” he says, noting that the project totaled in the neighborhood of $600,000 and that leftover past-due money was held up in “retention.” Essentially, the company paid 90 percent of every invoice Caruso filed and held the remaining 10 percent until the end of the job.
But there was no check in the mail.
“We got to the tail end of the job, and the payments stopped all of a sudden,” Caruso says, noting that he turned in a pay application for the job because projects of that size require draws for work performed.
Caruso had closely followed the paperwork protocol these large contracting jobs require. Before the start of the job, he sent the client his notice of commencement. And upon completing the job and not receiving that retention pay, he filed a claim on the lien. “Once your last day your labor has touched the ground is over, and after 90 days passes, if you don’t put a claim in on your lien when you haven’t been paid in full, you start to get into some muddy waters,” he says.
Lien laws can get tricky, and Caruso emphasizes that landscape companies that work on large projects like this one with multiple contractor-players involved should “watch their backs” and understand lien law. Otherwise, your company could get duped out of hard-earned pay.
“From a contractual standpoint, (the client) was likely hoping that we were not privy to (the law) and they were hoping to take advantage of us,” Caruso says.
Caruso confronted the client and was invited to their offices to discuss the matter. “I walked into this grandiose conference room and here come all the suits and ties trying to offer me 25 cents on the dollar to go away,” Caruso says of the paltry settlement proposition. He declined. Then he sought further counsel from his attorney.
After back-and-forth negotiating, Caruso eventually settled for 80 cents on the dollar. His attorney suggested that after a yearlong wait, Caruso accept the offer. Otherwise, he’d end up spending that money on attorney’s fees in court.
Caruso lost $10,500 on that job. “That’s not chump change,” he says. But ultimately, given the economic slump and slow pay trend of other clients, he felt he had no choice but to settle.
Lien laws are there to secure a debt the property owner owes to another person – in this case, Caruso. They’re a protection, but only if you use them. “I had all my i’s dotted and t’s crossed, which is why I got paid 80 cents on the dollar eventually,” Caruso says.
Partners and crime
When the partner that R.D. Winland started his first landscape company with back in college wanted out, what seemed an amicable request fast rolled into a drained checking account, bankruptcy and three years of stress.
All this happened right before the economy really took a dip.
“I had first rights to buy him out, or we could find someone else to buy him out 50/50,” R.D. Winland says of the somewhat loose partnership agreement that was drawn up between him and his buddy. Winland was the field man, managing operations and delivering the service. His partner was the sales leader who also managed the books.
Before giving the partner an offer, Winland figured out the worth of the company minus its debt. Then, he put an offer on the table. “The next thing I know, I’m being sued,” Winland says. But worse, in the midst of meeting with an attorney to deal with the lawsuit, the partner drained the checking account. There were no check-signing limitations requiring both partners signatures in their casual partnership agreement. That was a big mistake. Winland filed a countersuit that persisted for six months before the partner filed personal bankruptcy. So the case was essentially dropped because the bank takes precedence in situations like this. “We sat there for almost two and a half years waiting for the bankruptcy to go through court, and bank trustees, who oversee the procedure, came to us to see if he could get some assets out of the business,” Winland says.
The trustees determined that the partner indeed had ownership in the company. But they never asked the Winlands to give up any assets. Meanwhile, the partnership was still intact legally. And that is still the case today. “We filed for a dissolution instead of going back to sue him for what he stole,” Winland says. That process is in the works.
In the meantime, Winland faced a credit lock-up when he approached banks to get working capital because of the partner’s bankruptcy state. “No one wants to allow you to have a line of credit to purchase materials that you need to do long-term projects,” Winland says.
So Winland started a new business with his wife, Stephanie, as partner. They realigned their marketing by giving the company a new name but keeping the logo similar to the old one. “We want people to identify with the good things we have done in the past,” Stephanie Winland says. “We are in a small town, so reputation is everything.”
The Winlands communicated with customers about the name change, leaving the partnership battle out of it. “We put a letter out to customers and vendors saying we are realigning our business and marketing efforts to truly describe our line of work (with a new name), and it’s a positive direction for the company,” she says.
The lesson learned, Winland says, is to think twice before you bring on a partner.
Client use and abuse
For 15 years, Lawn Managers in St. Louis, had served as the lawn care subcontractor for a large maintenance firm in town – a several-million dollar outfit that only focused on landscape maintenance. The big firm sold lawn care services to its customers, turned the business over to Lawn Managers and paid Linda Zweifel and her then-partner directly. That business generally amounted to $200,000 in commercial work each year for Zweifel.
Last year, the large firm seemed to be growing exponentially. “They kept getting more and more accounts and having us bid on them and start to service them,” Zweifel says. “I thought it was strange that they were taking on so much work. Then, they started falling behind in payments.”
Lawn Managers’ 60-day payment policy went by the wayside. The big firm hadn’t cut a check for 120 days. Zweifel wanted to stop doing the work – better to lay off a couple of employees than put the business in financial jeopardy. But her partner wanted to keep their guys busy. They continued to do more work, driving the bill owed to them up to $150,000.
Zweifel placed phone calls, doing her best to collect. “They said, ‘We’re having a rough time, we’ll get it to you next year,’” Zweifel says. But by the end of the seven-month season, Lawn Managers was owed $185,000. The big firm would send scant payments of $3,000 here and there, barely chipping away at the balance. Today, Lawn Managers is out $122,000 and that doesn’t count operating costs. Plus, because Lawn Managers runs the business on a cash accounting basis, it couldn’t claim the $122,000 as a loss on their tax returns.
Meanwhile, the big firm had started another LLC, and Zweifel believes its unusual surge in business was an effort to falsely build up revenues in order to eventually sell to a large national company. “They used us for all of their chemical apps, knowing they weren’t going to pay, and they made it look like they had so much revenue going through them and capital to back it up,” Zweifel says.
That big firm is still in business. Zweifel sees the trucks on the road – their old name and logo were removed, but she can see where the signage was stripped from the vehicles. “They are still out there working, even though they ripped us off for $122,000,” she says, fuming.
Lawn Managers took the issue to court and found 10 other companies waiting in line to get their money, too. “There is nothing we can do to retrieve it,” Zweifel says of the money.
Zweifel says the LLC and fast growth were red flags, and Lawn Managers should never have allowed a large customer to run such a big balance. She says there are really no legal repercussions, and so now the focus is on driving the core business, not being a subcontractor for someone else. Lawn Managers is embarking on a website project to enhance its Internet marketing.
The end lesson: Don’t get brushed off by the bigger guy, she says. “A lot of businesses have working relationships with other companies and think, ‘Well, they always paid us in the past. They will pay us,’” Zweifel adds.
The author is a frequent contributor to Lawn & Landscape.
A single new and noteworthy plant can jazz up even the most run-of-the-mill projects. Before you submit your next bid and spec list, cruise through this list of introductions and consider substituting an old standby with a new offering.
Lady of Shallot
Gravely Pro-Walk 61 mower
The pitch: Gravely introduces the new commercial Pro-Walk 61 mower with a 23-hp Kawasaki FS 691v engine and a 61-in. cutting width.
- Features a fixed and floating deck.
- The floating deck cuts to the contours of the landscape and is lockable, giving operators the adaptability for changing terrain and improving the finished appearance.
- Built with a durable, fabricated seven-gauge steel deck, the newly designed Pro-Walk has a heavy-duty rubber side-discharge chute to expel clippings faster and farther without clogging.
For more information: www.gravely.com
BigDog Mowers T-series walk-behind
The pitch: The BigDog T-series walk-behind mower features the PowerBar Steering System and easy hand operated deck lift.
- All T-Series mowers come equipped with Kawasaki FS engines, available in 16-24 hp.
- Comes with a 36-, 48- or 54-in. deck and an optional electric start on the 54-in., 24-hp model.
- No daily lube points, and integrated serviceable ZT2800 transmissions.
- 18- or 20-in. drive tires and a 3.6-gallon fuel capacity.
For more information: www.bigdogmowers.com
Wright Velke Pistol Grip Hydro Mowers
The pitch: Wright Manufacturing’s Velke pistol grip hydro mowers can be operated as a walk-behind or it can be paired with Wright’s Velke foldaway sulky as a ride behind.
- Deck widths of 32-, 36-, 48- and 52-in.
- The mower has an integrated latch system for easy deployment and stowage of Wright’s Velke sulky.
- Simpler hydraulic control system with fewer components.
For more information: www.wrightmfg.com
Mean Green Electric Mower
The pitch: The Mean Green WBX-33 electric mower is capable of mowing more than 1 acre on a single charge.
- Features a one-click key start, and no choking, cranking or warming up is needed.
- No gear shifting, easy fingertip variable speed control up to 5 mph forward and 2.5 mph in reverse.
- Auto-shutdown of mowing blades before batteries are depleted allows plenty of power to get back to charging area.
- Fits through 36-in. gates and basement doors for storage.
For more information: www.meangreenproducts.com
For companies that produce propane walk-behinds, search “walk-behind mowers” on www.lawnandlandscape.com.