Tips from the Top: Brian Lemmermann

Brian Lemmermann, owner, Somerset Landscape & Maintenance

Landscaping was kind of a way to pay for college. I was playing football at a community college. Then when I was going to transition from the community college to a full, four-year school – there was a chance of getting a scholarship in Nevada. I’m a real numbers guy, and I ran the numbers on how many hours you had to practice and how much the scholarship was worth, and I realized it was about $2.50 an hour. I decided I was going do something else.

Our first expansion was from Phoenix to Dallas. We thought we were actually buying a small company in Dallas. We started winning contracts out there with a 60- or a 90-day start, and the deal fell through. The week it was supposed to close, the guy wanted to be a teacher, and didn’t realize until we were about to close that he needed a teaching license to be a teacher.

We said, “OK, we already signed up to do this contract,” so we just sent some people out with some equipment, and we moved them out to Texas, and we finally got started. Once you start doing the work, it’s hard to focus on sales because we have a budget for the company, and the majority of the focus is getting put on getting work done. You’re not established, so people don’t know who you are. We were passed over on some jobs because they just said we didn’t have the experience rating over there.

I think one big thing that we’re dealing with, and the whole industry’s going to deal with – or is dealing with – is labor. The labor market is pretty difficult right now. There’s construction coming back. There are a lot of high-paying, low-skill jobs out there right now, and so we spend a lot of time training guys.

We had a guy that was working for us. He worked for probably a week. He was really not a good worker, not good at all, but we were paying him probably more than we should have because we needed guys at the time. He didn’t show up the next Monday. On my way home from work, I saw him holding a stop sign at a construction site. And I said, “Hey, what are you doing?” He said, “They’re paying me $15 an hour to turn the sign back and forth, from go to stop.” I said, “Good for you, man. I don’t know what to say. I can’t pay you $15 an hour to do that.”

If we did an acquisition that would make a revenue jump – there’s been a couple times in the past, as we were growing from $3 million to $5 million or $6 million to $9 million in a year, that we had to catch our breath. We were really a cash-based company. If we were buying equipment, we didn’t finance it. I know that’s not the typical way, but that’s just how I was always comfortable growing.

Then I met with the bank, and I said, “I’d like to look at doing a loan on equipment going forward.” And they said, “Well, we don’t like your finances because you don’t cash flow as much.” And I said, “I don’t have any debt.” And they said, “Well, we would rather you have debt and cash flow more money than have no debt and not show big profits.” I said, “OK, well, that doesn’t make a lot of sense, but OK.”

I’ve changed my outlook. I understand more what they’re looking for and why they’re looking for that, and we’ve made a transition into more of a long-term financing and banking relationship.

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October 2015
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