“I guess the new word of the year is pivot,” says Matt Lyum, president of Honolulu, Hawaii-based Performance Landscapes. He started the company in 2002 when he drew up a three-year cash flow projection, personnel policy, safety manual and job descriptions. Admittedly, the number-crunching before he hired a single employee was not business-as-usual for the industry, particularly in his market. “Most people thought it was overkill, but it set us on a path of growth,” he says.
So, the plan was to land work in the Association of Apartment Owners (AOAO) sector – Hawaii’s version of HOAs. Lyum tapped into his family business’s real estate contacts, reaching out to property managers to let them know he had started his business, a pivot from his previous career in landscaping and composting.
“I called these property managers that my dad and family knew and they were all excited and encouraging me, saying, ‘A year from now, we’ll have a bid coming up, so we’ll keep you in mind,’” Lyum says.
“I’m thinking, ‘I need money now,’” Lyum says. “My cash flow projection said I’d be hiring in the upcoming months. I had to pivot right away.
“I rushed and got my contractor’s license, which in my business plan was not until year two. I jumped into install work and then the maintenance followed.”
Earning a contractor’s license requires working in the field for at least three out of the last 10 years. Lyum leveraged experience working for a previous licensed landscape contractor, plus the compost company had a landscape division with licensing.
“I was able to use that to qualify,” he says, adding that he passed the test within a month’s time. This fast ramp-up was necessary because potential clients were requesting install work and the new business already had a growing pipeline of opportunities.
Since then, consistent growth has followed. Performance Landscapes evolved from Lyum and his business partner and operations manager Benny Abrigado, to more than $7 million in revenue and 120 employees, a large portion of which are Filipino and are embracing Performance Landscapes’ customized training and opportunity to work on the island’s high-end properties.
Lyum says of the business, “This is scalable. I don’t even see an end in sight to our growth right now.” In fact, he turns down potential clients in order to preserve quality and ensure the infrastructure is in place to deliver on the company’s standards. Currently, Performance Landscapes services 24 HOAs on The Big Island.
“I intentionally turn down work so we don’t have big jumps in our workload,” Lyum says. “We always have to keep looking at infrastructure, and that infrastructure has to change and evolve with our growth.”
Ramping Up reputably.
Referrals feed new accounts to Performance Landscapes because property managers are looking for providers that understand Hawaii’s tropical nuances and what this means for landscapes. “We have year-round insects, pests and weeds, so you have to be up on your horticulture skills to identify those and know how to treat them,” Lyum says.
When he started the business 18 years ago, there were “lots of mow, blow and go” contractors. “But if you don’t control irrigation, fertilization and pests, you can really lose control of your landscape quickly,” he says.
In essence, Performance Landscapes has “taken control” of the high-end market because word passes on the island. Lyum rewinds to the first year in business when a friend of his received a wrong-number phone call from a woman seeking a landscaper. “He convinced her to call me, and she was on the board of one of the largest HOAs, which was a big leap into that market,” he says.
Lyum met with this new contact and she hired him. A year later, the HOA board requested an RFP from Performance Landscapes. But the property, called The Peninsula, was 43 acres, “and we were still too small to ramp up,” he says, always thinking infrastructure.
So, Lyum declined the opportunity. If he said yes, he’d have just 30 days to find staff and acquire equipment. “They actually liked our honesty, and they gave us 90 days to ramp up,” Lyum says.
The company recruited 10 more employees, which was a 30% jump in labor. Performance Landscapes relies on referrals to recruit new team members, offering a $1,000 bonus paid out during a year’s time to crewmembers who bring a qualified, hard-working employee to the table. “It helps motivate them to get good guys, and they want to do that anyway because they don’t want dead wood working with them,” Lyum says. The bonus is paid monthly until the $1,000 cap is hit as long as the new employee stays on board.
With a phase-in plan to handle the account and ongoing recruiting, Performance Landscapes took over the property maintenance and has been working there ever since.
HOA properties are bread-and-butter for Performance Landscapes, but entering the military property management sector has provided stable income and advanced the company’s safety training. In 2007, Lendlease reached out to Lyum. Lendlease is a private military contractor in the real estate industry and has a number of properties in Hawaii. “Usually, we don’t do government work because it’s in the low-bid world, but I talked to them and toured the site,” Lyum says.
“I intentionally turn down work so we don’t have big jumps in our workload. We always have to keep looking at infrastructure, and that infrastructure has to change and evolve with our growth.” Matt Lyum, president, Performance Landscapes
They were looking for something different. “They wanted a high-quality service provider,” he says.
Lyum’s wife, Tracey, who is a financial adviser and does the accounting for Performance Landscapes, helped changed Lyum’s tune. In 2007, the country was on the brink of a recession and she saw the writing on the wall. “She said I might want to consider a customer with a 50-year federal contract,” he says.
Performance Landscapes has been servicing Lendlease properties since then, and the account has grown exponentially, from 300 homes to now more than 5,000 and counting. Plus, the work has been recession-proof and resulted in safety and training protocols that Lyum says makes Performance Landscapes a better business.
For example, Lendlease implements the military AHA, Activity Hazard Analysis. “So, you have to analyze each piece of equipment or activity, come up with a training program and workers have a laminated card signed off by a supervisor saying he is trained for one year,” Lyum says. “Every year it expires, and they have to retrain.”
Lyum loved the concept and adopted it as a best practice at Performance Landscapes. Every year, the company hosts a training day. The workweek is cut to four days and staff is paid overtime on the fifth day, which is set aside for field activities and education. Team members retrain on every piece of equipment.
“We think this is a better way to operate, and we’ve grown from it,” Lyum says.
Meanwhile, Performance Landscapes creates its own training manuals and videos, primarily because the company translates English into the Filipino language of Ilocano. Landscape training manuals are widely available in Spanish, but not this dialect. “We make our own in-house training flyers, and several of our supervisors and managers are fluent in English, so now we are doing in-house training videos,” he says.
Recruiting from the Ilocano Philippine farming communities has resulted in building an agronomically strong team, which is important to Lyum.
“They have an awareness of plants and plant management,” he says.
Similar to how Performance Landscapes has grown its client base, it expands its team through referrals.
“Our people almost prequalify people for us,” he says. “They have already talked about our company and our values, our attention to detail and professionalism. So, a lot of the guys who come to us say, ‘We want to work like that, too.’ It cuts the interview process way down.”
Systems with an edge.
If you see Performance Landscapes on the road, you’ll notice their vehicles because of the professional logo.
Plus, the enclosed vans aren’t the usual truck-and-trailer outfit. The service vans are windowless, which prevents theft. They’re easier to drive on the volcanic Hawaiian topography. And it’s easier to jet through traffic, which can be merciless during rush hour.
“A truck and trailer have physical difficulty getting around town and to different jobsites,” Lyum says. “And because our streets follow the contour of the land, our crews are winding up and down hills, and truck-and-trailers are a little bulky for that. So, we use the vans that are lockable for mobility, maneuverability and security.”
With growth a theme, the fleet has expanded and so has Performance Landscapes’ need for warehouse space. A major milestone was purchasing a location – its third move – in Honolulu, where industrial real estate can cost up to $300 per square foot.
But being in town was critical for reducing drive time, Lyum says. As everyone files into the city to work, the crews are driving against traffic.
“We save what we pay in our mortgage in travel-time costs,” he says. “And, buying our own property really stabilized that part of the equation where a landlord could raise the rent or evict us.”
Another stabilizing force is how Performance Landscapes uses time-motion efficiencies for estimating through online property measuring software. “We set up production rates and did some random checks on our crews and modified those a little bit,” Lyum says.
With those rates and the measurements software provides, Performance Landscape can accurately job cost. And once a year, Lyum reviews those numbers to assess whether price increases are necessary.
“If we are doing really well with time on a property, it will not get an increase. But if we are behind, there might be a price increase,” he says.
Looking ahead, Lyum says that Performance Landscapes, like every business, is anticipating the end of the pandemic.
Though, he’s grateful to be in an industry that is deemed essential and that his accounts are HOA and military vs. hospitality and retail, which are struggling. Sure, some jobs have been postponed, but other areas like installation have accelerated. In fact, the company was wrapping up a CARES Act-funded job in December.
Acquiring plants and landscape materials continues to be a challenge across the green industry, and it’s no different for Performance Landscapes. Back to the word of the year: pivot.
With one job, Lyum is working with the architect to re-specify plants and extending the project through 2021. He plans to contract grow a lot of plants.
Continued growth is on the docket, though. Performance Landscapes created another layer of management to allow for career development. “We just have to be conscious of not growing too quickly,” Lyum adds.
With all the pivoting during the company’s history, in many ways it was prepared for the pandemic. And, there have been may silver linings. Lyum names this one specifically:
“One of our HOA accounts applied for the local building industry ‘landscape of the quarter’ award because of our service,” he says, proud.