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April 19, 2012

The Serpico Way

Quality control and constant communication are the keys to attracting and retaining HOA clients.

In the homeowners association world, landscape firms have three bosses: the property manager, the board and a landscape committee. Then there are all of the people who live on those properties within the association, keeping a close eye on what you’re doing.

“You have a lot of eyes watching you … the retired guy who is home all day, and there are a lot of people who are home, who work at home,” says Sharon Serpico Hanson, CEO of Serpico Landscaping.

Client scrutiny on many levels puts heavy demands on service firms that work for HOAs. “You need to be really professional in how you present your organization and the work you do,” she says.

Because Serpico Hanson experienced inadequate service while on her HOA board, she came to the industry with specific ideas about what areas of her operation needed to be fine-tuned to win and maintain HOA accounts.

From left: Rick Hanson, CFO, Sharon Serpico Hanson, CEO, and Brad Barroso, COO.

She sees things from a service perspective.

“We were creating an organization based on how we communicate with customers – it wasn’t really about mowing lawns,” she says. “I hired people who were experienced with that, and we trained them well and developed a training program that was really important in those first years because I wanted to deliver consistent service.”

Serpico Hanson set out to change a trend in the HOA market of boards hiring then firing their service providers. “One thing I heard over and over again was that (service firms) start out well, and then after a couple of months or a year or two, they fall off the cliff,” she says.

A solid training program prevents quality from waning after an account is won. And so does a stringent set of quality controls that are referred to as the Serpico Standards. From implementing a detailed work order system to demanding high-touch communication, the standards form a set of key performance indicators for Serpico Landscaping.

But those standards are no guarantee that Serpico Landscaping will win business. And breaking into the HOA market was a lot more difficult than even Serpico Hanson expected. “This is a very tough segment of this business because it’s very, very communication intensive,” she says.

Serpico Hanson did have some connections from her time serving on an HOA board, but mostly, her offer to deliver HOAs something different and better and measurable appealed to this audience.

Essentially, Serpico Landscaping sets out to show those three bosses they can indeed hold on to a service provider for the long-term.  And that message resonates with HOAs. Partnering? Communicating? Reports? HOAs like what they hear. Serpico Hanson says business exploded quickly for her firm because no one at the time was talking to HOAs about these things.
 

Read how Serpico Hanson ditched the corporate world and built a $15 million landscaping business. Find the story and sign up for the A Cut Above e-newsletter at www.lawnandlandscape.com/newsletter


Kristen Hampshire


Setting standards

Holding employees to high standards is one thing. Implementing a system that ensures those standards are ingrained in the company culture is what Serpico Standards accomplish. They are more than a set of ideas about what is expected. They include operating instructions for making sure those expectations are met on a daily basis.

If this sounds militarily strict, well, you’re partially correct. Serpico Hanson credits her penchant for quality control to her father, a career Army officer. “His life was structured around doing things right and having a plan in place,” she says, adding that his influence was significant, particularly in the way Serpico Hanson embraces and tackles standards head on.

Serpico Standards address communication, pricing and work quality. And these key areas are exactly what must be addressed for companies to keep homeowners association (HOA) accounts over the long-term, Serpico Hanson says.

Communication is emphasized through monthly account reports, real-time work orders, emails and property walk-throughs. “It’s a communication intensive business,” she says.    

Pricing must be competitive, but that is not what ultimately wins over HOA clients. “Being competitive in price is necessary, but you don’t have to be the cheapest out there (although there are some HOAs that are looking for that),” Serpico Hanson says. “What’s more important is having a lot of patience and doing quality work. Mow, blow and go doesn’t cut it in this environment.”

To that end, quality is upheld at Serpico Landscaping via a work order system.


 

In the field

Why Bill Gallagher spends his days beside his employees and customer.

Bill Gallagher, president of Summer Rain Sprinkler Systems, isn’t the type of boss that you’ll find behind the desk every day. He likes being in the field. And even after growing his Connecticut-headquartered business past the $10 million sales mark, he says he still wants to be out with his guys.

In fact, Gallagher says it’s rare for him to be in the office for more than an hour or two each day. He’s usually meeting with existing clients, helping supervise crews and making sales calls. Here are three reasons why working in the field works for him.

After recovering from a serious illness, Gallagher decided to change careers and open an irrigation firm.

Responsibility. Gallagher says he always remembers that, in the end, he’s the one responsible for what his employees are doing. “I have really great people and I trust them, but I’m still the one ultimately responsible,” he says. “So I’m always still involved. I don’t turn my guys loose and turn a blind eye. But being involved is helpful for them, too. They want direction and to know we’re on the same page. Their idea of an efficient design might be different than mine, so we work together.”

Discussion. Being in the field and working with his crew helps Gallagher keep the lines of discussion open. “It’s important to talk and share the wealth, as far as what’s being done and why,” he says. “We can really learn from each other that way. Maybe we can zone that one corner a little differently or discuss a certain type of plant material that may need different irrigation. This is an industry where things are always coming up out in the field and it helps to be there to talk about it.”

Service. Gallagher says that his clients like seeing the boss out and about, and he says they equate that to dedication. “Without a doubt, it’s something that the customer notices,” says Gallagher. “They know I’m a hands-on business owner and they like that. I think it’s a big part of the reason that so much of our good reputation comes from word of mouth and referrals.” 


Gallagher has grown his company to $10 million by hiring employees with a range of skill sets. Read the story and sign up for the Water Works e-newsletters at www.lawnandlandscape.com/newsletters.


Lindsey Getz
 

Natural Fit

Summer Rain Sprinkler Systems started off as solely an irrigation business and eventually got into lighting services, as well. Today the business is about 90 percent irrigation and 10 percent lighting – including a holiday lighting service. Gallagher shares why he decided to add this segment and how he’s working to fight the price wars while still maintaining the company’s strong integrity.

Gallagher says that lighting was a natural transition. “We were in the ground to begin with, so it just made sense to get into the lighting segment,” he says. “We already had the machinery and had been thinking about hiring an electrician for years because we don’t just plug-in our controllers – we hardwire them.”

It’s been about 10 years since the company started offering the service and Gallagher says the add-on has been a good fit for his business. However, since the economy has turned downward and price competition has grown steep, Gallagher says it’s become increasingly challenging to hold his prices. He says it comes down to customer education.

“We do everything to code and we use good, quality high-end fixtures that really complement a property beautifully,” Gallagher says. “But we find more and more that other contractors aren’t following code. They don’t care about the principles or the rules.

“Unfortunately that can be challenging when it comes to price. They are cutting corners but offering an extremely low price that we can’t match. And sometimes the homeowner only sees the price. So it comes down to us to educate – to make sure the customer knows why we price the way we do.”

 

 

Smooth transition

Tom and Paul Jones offer ideas to discuss when creating a succession plan.

Tom Jones will be the first person to tell you that he and his brother Paul aren’t getting any younger. They know they won’t live forever and, like the leaders of so many businesses in so many industries, they know they need a succession plan to ensure LandArt isn’t just sold to the highest bidder.

“We started really talking about it probably three or four years ago,” Tom says. “Our banker is a good source of information on some of the ideas, and we’ve talked with some people who do this for a living. We’ve been kicking some ideas around, but nothing has really jumped out exactly and screamed that this is exactly how we have to do it.”

Tom and Paul Jones

Here are some of their thoughts on how to go about the process.

Bring your employees on board early during the process. One option is to hire, train and incentivize a new and younger class of entrepreneurs to help ease the transition. This is one option Tom and Paul are considering as they start to phase out bit by bit. “We feel that an excellent way to reward talent and performance, and secure the future of the business, is by creating an equity position for interested and qualified employees at every level,” Paul says. “With founding ownerships maintaining a consistent message of dependability, community service, customer relations and access to capital, a younger company can be recreated without threatening existing relationships.”

Make sure your customers are aware of the changes well in advance. In 1974, when “Old” Ed Blackford gave control of the business to Tom and his business partner at the time, Roy Egelhoff, he wrote a sincere and succinct letter to his customers. “It is indeed a pleasure to introduce them to you, because they are young, with the vigor and stamina necessary for tree landscape work,” Old Ed wrote then. “Let me say that I take personal interest in seeing that each of my customers has complete satisfaction and gains a fruitful new interest in his home and business grounds.”

Find a comfortable speed. If you ask Paul, entrepreneurship is like a relay race. The best relay teams – on the track, in the pool, in business, in life – never slow down or even, really, speed up all that much. No, they maintain a constant speed. The first leg of the relay is starting the business, the second is growing the business during its maturation years and the third is eventually handing it off, just like the relay baton, to the next generation. “It never ends,” Paul says, “and improves over time.”


The Jones brothers have been in the industry for more than three decades. Read what they’ve learned and sign up for the Business Builder e-newsletter at www.lawnandlandscape.com/newsletters.


Matt LaWell
 

Employees first

Outside of the quality of their work – everything from design and construction, to regular maintenance and seasonal services – managing partners Tom and Paul focus on customer service and competitive bids. But not how you might think. Not how you might focus on those things, either.

When dealing with customers, they want to deal first with their own employees.

“Treat your people well,” Tom says. “I remember we went to a Wisconsin Landscape Federation meeting, just a local chapter. I was real young at the time, and one of the older guys said, ‘You want to run a good business? Go out and hire people and beat ’em like a rented mule. As soon as they’re tired, you go out and hire somebody else.’ That was exactly the opposite of what I thought. You treat your people as well as you possibly can, and that helps how they treat your customers, and how they respect you and their whole outlook toward the company. It will show up.”

“Only if our employees are properly compensated and rewarded for performance can they give our customers the service we insist they deserve,” says Paul, who joined LandArt in 1979 when his sons were young and he wanted to spend more time with them and less time with his job at a multinational company. “Really, we do put the employee first.”

 

 

Recognizing wise investments

Tim Schnabel found a reliable employee, gave him ownership in the company and moved out of state.

The last thing that Tim Schnabel thought he wanted when he graduated from Texas A&M University was to work in the lawn care industry. 

“My dad was in lawn care,” says the Houston native. “I wanted to wear a tie and be somebody important.”

So after college, Schnabel packed his bags for Colorado. He worked as a branch manager for an IT company, but two years of corporate sales left him restless. 

“There’s no loyalty in corporate America – you’re there for one reason, to make the company money,” he says.

When he was 29, Schnabel started his own lawn care company, Integrated Lawn & Tree Care in Colorado Springs. He knew it was demanding to run your own business – he’d grown up around one – but he wanted to be his own boss, not push paper all day.

Using an old push spreader given to him by his dad, Schnabel began to build his company. He knocked on doors in the middle of winter and cold called at night. Within a few months, he had two hundred customers. For several years the company grew steadily, and before long it became successful.  

Then, just as quickly, his life changed again. Schnabel and his wife had a baby, and Colorado suddenly felt like a long way from Texas. They wanted to be closer to their families back home. Yet the company was just taking off. If Schnabel left now, he thought, all of his sacrifice and hard work would be for naught. 

That’s when he met Jon Rick, an undergraduate student at the University of Colorado at Colorado Springs. He hired the 19-year-old as a part-time, seasonal employee, but Rick’s ambition and talent was immediately evident, and Schnabel saw something of himself in his new worker. 

In 2007, Schnabel moved back to Texas and founded a new lawn and landscape company called Aggieland Green Lawn & Tree Care. He and Rick now own Integrated Lawn & Tree Care together, and have a plan to increase Rick’s ownership over time.

The story of this rare, productive partnership and how both entrepreneurs structured the change to meet their goals is a lesson in managing transitions. 
 

The meeting. From Rick’s first day on the job, Tim Schnabel knew that he’d made a good hire. The undergraduate was a step ahead of other student employees.

“Jon just stood out,” he says. “He always made good decisions with my equipment, trucks and customers and worked circles around everybody else. He led by example and earned trust from others. I knew that I could put him in charge.”

Rick came along at a fortuitous time. Schnabel was busy managing Integrated Lawn & Tree Care, but in the back of his mind, he was plotting out a transition plan.

“I made a lot of sacrifices, including knocking on doors when people couldn’t see their lawns, there was so much snow,” Schnabel says. “I wanted to realize my investment.”

Schnabel thought about selling the company, but he knew it wasn’t mature enough yet. Although he wanted to move back to Texas, he couldn’t give up what he’d worked for.   

“My personal needs didn’t match the maturity level of the business,” he said. “I’d made so many mistakes and learned so much – I knew I couldn’t sell yet.”

Then Schnabel came up with an idea. What if Rick agreed to work side-by-side with him before he took over as manager and co-owner? That way, he’d gain valuable experience and added income, while Schnabel and his wife transitioned to Texas. 

The key to making it work, Schnabel thought, was ownership. “I knew I’d have to give up some of my share of the business, so Jon would treat the company as his own,” he says.  
 

To read how the two worked out details on the ownership and transition, visit www.lawnandlandscape.com/newsletters. While there, you can sign up for our Growing Green e-newsletter.


Lee Chilcote