Travels with Jim follows Jim Huston around the country as he visits with landscapers and helps them understand their numbers to make smarter decisions.
Modern military snipers like Chris Kyle have taken their trade to a whole new level. Placing all shots within a 5-inch group at 1,000 yards is common practice today. This kind of accuracy was unheard of just a few years ago.
The improvement in accuracy is due to many factors, such as improved optics, more consistent metals for rifle barrels, projectiles and brass casings, and, most of all, better training. This constant pursuit of perfection resulting in improved accuracy greatly expands the shooters’ opportunities and effectiveness.
The modern estimator.
The modern estimator, like the modern sniper, should also be constantly improving his accuracy. Modern tools such as digitizers, planimeters and computers allow today’s estimator to be extremely fast and much more accurate doing takeoffs. However, it’s all for naught if the estimator puts all of this takeoff data into software containing faulty mathematical algorithms when adding margins and markups to costs for plants, pavers, irrigation materials and so forth.
Factoring.
Factoring is basically the mathematical process of multiplication such as 2 x 3 = 6. The 2 and 3 are factors and 6 is the product. Some estimators use a materials factor to arrive at a price for installed products. For instance, in the equation of materials cost x 3 = price, the 3 factor is supposed to cover costs for equipment, labor and burden, general and administrative (G&A) overhead, general conditions and a net profit margin. Really? It’s almost laughable how inaccurate this method, while commonly used, is.
How it works in the field.
Phil had a growing landscape installation company in the northwest U.S. He installed both residential and commercial projects. Early in his career, his local supplier told him to multiply material costs for a residential job by 3 and costs for a commercial one by 2.6 to arrive at a price. The supplier had no idea how to validate such factors, but they seemed to work. Phil soon determined that his supplier was doing him no service by “helping” him with his pricing.
Phil was pretty good at arithmetic and he was constantly attempting to improve his business skills. After much head scratching he came up with the following formula for pricing his installation jobs, which he hoped would give him a 20 percent net profit margin (NPM):
Residential jobs: Multiply all direct costs (materials, labor with burden and equipment) by 1.67.
Commercial jobs: Multiply all direct costs by 1.35.
Phil hired me to review his business and estimating methods. After reviewing his bidding technique, I informed him that he was making a false mathematical assumption by multiplying his direct costs by percentages for the purpose of calculating G&A overhead costs and NPM. Whether you multiply all direct costs by a single percentage, two percentages (one for materials and one for labor) or four percentages (one each for materials, labor, equipment and subcontractors), or a whole number like 2 or 3, you’re still factoring. When you multiply your direct costs by a factor, you’re always making a false mathematical assumption that could cost you jobs and money.
Three points regarding G&A overhead costs.
These costs vary insignificantly from month to month.
Almost 90 percent of such costs (rent, office salaries, utilities, etc.) are paid monthly and/or are based on time.
Field trucks and equipment should not be included in these costs.
Two jobs.
Phil’s G&A overhead costs were $10,000 per month and his entire field labor costs to include labor burden were $13,000 per month. His field trucks and equipment costs were about $5,000 per month.*
Analysis.
Phil’s 1.67 factor was extremely inaccurate. He could have lowered the price for Job A by almost $12,000 (12 percent) and still have achieved his 20 percent NPM goal. In a competitive market, he might price himself out of this job. The 1.67 factor caused Phil to underprice Job B by $16,000. Lessons learned:
Factoring direct costs will almost always cause your bids to be too high or too low.
A competitive market will give you the jobs you underprice and not the ones you overprice.
Conclusion.
Modern estimators, like today’s long-distance snipers, should constantly strive to improve their accuracy. Too often they take their best shot using a shotgun approach instead of using modern bidding technology. The estimator who uses factors to price his work usually ends up shooting himself in the foot and not the intended (profitability) target. And that can be a painful experience in the pocket as well as in the foot.
Jim Huston runs J.R. Huston Consulting, a green industry consulting firm.
Sales Call offers landscapers Marty Grunder’s practical and tactical advice on how to improve their sales and marketing, and grow their company’s bottom line.
Eight months ago, I made the biggest change I’ve ever made in my company and in my career. I took the reins of Grunder Landscaping and placed them firmly in the hands of my right-hand man Seth. Overnight, I went from having nine direct reports to just one.
I went from being directly involved in nearly every aspect of the business to focusing instead on where I can move my company forward the most through business development. And you know what? I’m having the time of my life and my team is re-energized and re-engaged.
What led me to make this radical change in our 35th year of business? It wasn’t that we were doing poorly. In fact, the last few years have been our most profitable yet. But I travel frequently in my work coaching and consulting with other ambitious landscape pros. It’s work I love doing, but it means I’m often away. And while my team has done a lot to accommodate my frenetic schedule, deep down I worried about the impact this setup was having on all of us.
But I didn’t really reckon with the bigger picture until last December, when, in a remarkable act of generosity, mentorship and friendship, four of our industry’s leaders – Frank Mariani, Jim McCutcheon, Todd Pugh and Mike Rorie – traveled to Grunder Landscaping and spent a day with my leadership team. After speaking with each of us individually and together, and taking a close look at the way we operated, they delivered their verdict: Our current structure would not enable us to continue to grow.
With my too-tight grip on the steering wheel and my travel schedule, I was holding good employees back and impeding momentum as a result. The best reason to grow a company is because you have great people who want more opportunities, Rorie, former president of GroundSystems, said. That was a real wake-up call for me.
I want to share with you here the positive developments I’ve seen from our reorganization because I think all companies can benefit from lessening reliance on the owner to some degree. It really is the only way to grow.
Communication.
A reorganization like the one we undertook at Grunder Landscaping only works if your leadership team knows the big picture. Under Seth’s guidance, we now share 100 percent of our financial performance with them. This enables them to see exactly how well we’re doing and where we need to tighten up or improve. The leadership team meets every Monday, without me, and they follow a strict agenda to drive accountability and progress. On Fridays, Seth and I meet to do the same. Delegation should never be abdication, and this structure ensures that doesn’t happen.
Speed.
While I’m still in charge, I am focused on business development and am not operating the day-to-day controls. I’m involved where I need to be, and not when I don’t need to be. Before, I was trying to do too much with too little time. Now that we’ve empowered our leadership team to make decisions on their own, we’ve removed bottlenecks. Issues that could take weeks to get resolved in the past can now be addressed much more efficiently.
Culture.
When we decided to undertake this reorganization, there was a fair bit of anxiety on all sides. Would I actually follow through and give my team the authority to make decisions without me? Would they actually want the added responsibility when they saw what it would entail? Would chaos ensue? How would we all adjust to massive change, especially when so many of us had worked together for so long and were so used to doing things the way we’d always done them?
It hasn’t all been wine and roses the last several months, but none of our serious fears have come to bear. Instead I’ve watched as my leadership team has pulled together and challenged each other to stop thinking about all the reasons we can’t or shouldn’t try something new and to start training our aim on all the potential we might realize if we do. As Seth likes to say, “Progress is finding solutions.”
The future.
What excites me the most about these changes is the future we’re building for the company and for my team. We’re on a new path for growth, with a succession plan that leverages the expertise of our longtime employees while capitalizing on the energy and strengths of the next generation. We’re proving that we can evolve and that young people have a future with us. And that makes for a pretty dynamic place for us all to head into work every day.
Marty Grunder is a speaker, consultant and author. He owns Grunder Landscaping Co.
According to a report by IBISWorld, the lawn and outdoor equipment industry has recovered significantly over the past five years, because it’s been “bolstered by a revival in spending on home improvements.” Grand View Research says gardening is growing as a hobby thanks to “improvement in the social lifestyle of an increasing base of the affluent middle-class population.”
Those proclamations sound good if you’re in the landscaping industry, but what would be better is if you had some cold, hard facts that prove that the market for landscaping products and services is growing. Here are a few pieces of evidence that show us that this market is growing. Read the full story at bit.ly/LandscapeOfLandscaping.
Photo by Kate Spirgen
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On Instagram, we like to highlight events we attend and places we get to travel. This summer, went to the Walker Family Reunion in Fort Collins, Colorado, where the company was celebrating its 150,000th mower coming off the line.
GIE+EXPO is right around the corner. Send us a tweet at @lawnlandscape and let us know what you’re most looking forward to!
On a monthly basis, we cover a host of add-on opportunities for landscape contractors and lawn care operators. There’s a number of common services that exist outside of what we consider the core four: maintenance and lawn care, design build and irrigation.
Add-ons like holiday lighting, landscape lighting and mosquito control are traditional ways to go if a contractor wants to diversify their service mix. Then, there are fringe ones that we don’t cover as much like parking lot striping, dumpster rental and maid services.
But this month we wanted to find companies that are truly providing unique services or, in some cases, a completely separate business.
Owning a landscaping company provides some unique advantages that companies in other industries don’t have when it comes to expanding services. Some of you have to lay off employees during slow times or have pieces of equipment that go unused for long periods of time. Why not use that talent and investment to make money and have some fun if your core services aren’t keeping you busy, profitable or engaged enough?
In the case of our cover subjects, Kathleen and Andy Dangelo, they love wine (who doesn’t) and had space on their property to fill so they built a winery. But they aren’t just going to sit back and sip merlot. Eventually, they’ll use the space to host clients, and show those potential customers the quality of work they do.
The Dangelos could have told themselves it’s not feasible to build a winery, but after researching the market, they decided it made complete sense to do it.
Owning a landscaping company provides some unique advantages that companies in other industries don’t have when it comes to expanding services.
We found another company that is creating columbarium gardens to place urns. Probably not the line of work Jeff Reynolds, owner of Custom Stonescaping, thought he’d be making money from along with landscaping. A priest approached him at a home and garden show and introduced him to the idea, which he knew nothing about. After some research, Reynolds decided it made sense. Not only is it revenue stream, but it’s also meaningful work for his employees.
“The guys really enjoy building them and they feel a sense of pride,” Reynolds says. “It’s one thing to build a patio for someone to grill a steak. It’s another thing to build something at a church that’s built special.”
I know there is a lot of value in concentrating on your core services and not losing focus on what made you successful in the first place. But keep an open mind about the capabilities of you and your employees. Your columbarium or winery might be out there; you just have to be willing to take the leap (after some research of course) when the opportunity presents itself. – Brian Horn
A greener mow
Departments - L&L Insider
Greenworks debuted new battery-powered zero-turn mowers.
The push for more power and longer battery life comes as a result of industry trends showing an increase in the use of battery-powered equipment.
At the Greenworks North American headquarters in Mooresville, North Carolina, Greenworks hosted a launch event for its latest in battery-powered equipment with its line of lithium ion zero-turn mowers.
Juli Denike, market insights manager at Greenworks, said there has been an uptick in battery-powered equipment for the last several years.
The two newest pieces of Greenworks equipment, the Lithium Z 82V GZ 60R Ride-On Mower and the 82V GZ 48S Stand-On Mower, were developed to be true gas replacements, said Kevin Gillis, vice president of product development at Greenworks.
Because the industry has seen more restrictions lately in terms of emissions and noise, the company sees its battery-powered equipment as a workaround to those problems.
“500 cities have a backpack blower ban,” said Tony Marchese, director of independent retail at Greenworks. “That number is up about 250 since October.” Greenworks offers a line of several backpack blowers to fit the needs of commercial contractors. The battery pack is located in the backpack to take the weight off the equipment.
Both the 82V ride-on mower and 82V stand-on mower are powered by an 82-volt 13.8kW lithium-ion battery and feature three 1.5kW brushless blade motors and two 1.7kW brushless drive motors. Battery voltage can be compared to an engine’s horsepower.
After a full charge, which takes approximately 10 hours, the ride-on ZTR is capable of up to five hours of cutting time. The stand-on will cut for six hours on a full charge which also takes 10 hours to fully charge.
During time trials for two-man crews using gas-powered mowers, it was discovered that actual cutting time per day for a zero-turn is about three and a half hours, with 20 minutes of cutting per property.
Battery perks.
Greenworks also announced smart batteries with a GPS option will soon be available for customers. The batteries will be able to communicate diagnostics with the user through an app and intuitively adjust machine performance.
“The battery will communicate with each part of the mower,” said Corey Fisher, engineering manager of mowers and vehicles at Greenworks. “So if one side of the mower needs more power, the battery will tell that blade to give more, not slow down.”
The GPS integration will be available as an add-on for larger products and vehicles.
The company is also introducing a six-pack battery charger. Currently, operators can only charge up to two batteries at a time.
Dr. Robert Ballard will bring his tales of discovery, which includes finding the Titanic, to the GIE+EXPO show as the keynote speaker. By Brian Horn
PROVIDENCE, Rhode Island – Dr. Robert Ballard remembers the first time he talked to his mother after finding the Titanic. The conversation didn’t quite go the way you would imagine a mother talking to her son who just discovered a historic artifact.
“I had been on the “Today Show,” the tomorrow show, the day after tomorrow show, every damn show you can image. I had been all over television. The phone rings and it’s my mom and she says, ‘Too bad you found that rusty old ship.’”
Ballard’s mom lacked the expected enthusiasm, but the statement was actually praise for her son. Ballard had many achievements before finding the ship that sank on April 15, 1912, and Ballard’s mom was afraid that was all he’d be known for accomplishing.
“I know my obituary is going to say, ‘The guy who found the Titanic died today,’” Ballard said.
Ballard will be keynote at the GIE+EXPO making two speeches: one for dealers from 10:30-noon on Wednesday, Oct. 17, and one for contractors from 1:30-3 p.m. the same day.
Lawn & Landscape visited Ballard at the Inner Space Center, which is located in the Center for Ocean Exploration, where Ballard is the director, at the University of Rhode Island's Graduate School of Oceanography.
Learning from a leader.
So, what can a landscaper learn from someone who makes their living by making underwater discoveries? Aside from the interesting details of his approach to all of his discoveries, including the Titanic, he can relate to a green industry business owner because he had to be a leader to achieve success. He also had a few missteps along the way to his discoveries, like many entrepreneurs have as they grow their companies.
“Failure is the greatest teacher you'll ever meet,” he said. “You can't avoid failure. You won't learn anything, so you just have to recover from it. You have to have the passion. It’s important to be smart. It’s more important to have a passion to get you up when you get knocked down.”
When Ballard first set out to find the German battleship Bismarck, he failed. On top of that, there was a camera crew to document the search. Afterward, the interviewer asked him how he felt about not finding the ship.
“I looked at the lens and I said round one to the Bismarck. I know where it isn't,” he said. “I'll get it the second time. And I got it. So, I got to put things in perspective.”
It’s that positive attitude that has been a key part of Ballard’s success as a leader.
“People want to be around optimists,” Ballard said. “When you're an optimist, people will bet on your horse. They'll say, ‘well, he seems pretty confident.’ I think it's attitude. It just becomes part of your DNA.”
Ballard found the Titanic while on a top-secret mission for the U.S. Navy. His mission was to find two lost nuclear subs. Ballard would embark on the mission in 1985, but since it was the height of the Cold War, he needed a cover, and looking for the Titanic was perfect. He received permission to look for the Titanic if he found the two sunken submarines.
“I was on a highly classified top-secret military mission that I was terrified people would figure that was what I was doing,” he said.
After finding the subs, it took him and his team nine days to find the Titanic. He is currently working with Titanic director James Cameron to help raise enough money to buy the more than $5,000 artifacts after the company that owned them filed for bankruptcy in 2016. The plan is to have them placed in the Titanic Belfast museum.
Giving back in D.C.
Green industry professionals headed to D.C. to pay tribute to fallen soldiers and advocate for the industry. By Brian Horn
When Lt. Col. Priscilla E. Quackenbush helps a wounded soldier as a patient, the patient’s first request is to speak with their mother. But Quackenbush, who is retired from the United States Army Nurse Corps, said the second request is to have a room with a view of the outdoors and especially trees.
Quackenbush said the role green industry professionals have to help these grounds is similar to the role she plays in helping people recover. She stressed the importance landscapes play in helping patients recover.
Quackenbush was the keynote speaker for the National Association of Landscape Professionals’ 22nd annual Renewal & Remembrance. The event allows hundreds of NALP members work on lawns, trees, irrigation and hardscape projects at Arlington National Cemetery.
NALP President Jeff Buhler, who is also senior vice president of customer service at Massey Services, urged the volunteers to take a moment and reflect on the chance to treat the grounds.
“Often the most impactful moments in our life are a blur,” Buhler said.
The NALP members also volunteer to treat the United States Soldiers’ and Airmen’s Home National Cemetery where more than 14,000 veterans are buried, including those who fought in the Civil War.
Photo courtesy of Brian Horn
According to the event chair, John Eggleston:
Lawn care professionals aerated 108 acres, applied lime to 117.5 acres and phosphorus to 46 acres.
Arborists installed lightning protection in four trees (at Soldiers Home).
Irrigation professionals revived a non-functioning system at the Administration Building, inspected, repaired, and increased efficiency at all the columbarium irrigation systems, and installed a main line in preparation for a future R&R project at the Coast Guard and North Pole monuments.
Landscape and hardscape professionals replaced a failing retaining wall with a new one, replaced a slate maintenance strip around Columbarium 1 – the first phase of a planned nine-year project, and replaced a worn area between buildings at the Service Complex with a new mulched and landscaped pathway.
Children planted an additional 15 shrubs and over 300 annuals at the Mast of the Maine memorial.
Dan Krems, CFO at LandCare, attended the event for the first time and said he felt a deep sense awe and of gratitude for the fallen soldiers, and a sense of connectivity and pride in the industry working alongside other volunteers. “Honoring those who serve our country and giving back to our communities represents the highest ideals of our industry,” he said.
INDUSTRY ADVOCATES.
As part of the preparation for visiting legislators on Capitol Hill, there were a few panels about issues being discussed and tips on how to be a better advocate.
H-2B: Laurie Flanagan, executive vice president at DC Legislative and Regulatory Services, NALP’s government relations firm, said the association has had two goals when it comes to H-2B – advocating for more H-2B visas to be released this year, and to get permanent H-2B cap relief (for example reinstating the returning worker exemption.) She said more visas won’t be released, but there is some hope about the returning worker exemption. Flanagan added that when business owners are meeting with representatives, they should explain everything they’ve done to hire American workers. Tim Daniels, who works in the office of congressman Andy Harris (R-MD), said even though there is opposition to H-2B by both Republicans and Democrats, political support for H-2B is at a peak right now. “I’m cautiously optimistic something can get done,” he said.
SOCIAL MEDIA: David Payne, president and founder of Codavate public affairs, and William Lopez, vice president of customer success at Phone2Action, gave tips on how to use social media for political advocacy.
Payne listed a couple of reasons on why you should be using social media for advocacy:
Government uses it. “It’s now more important than emails and phone calls to them,” he said, but he added that a call from a business leader still counts more than reaching out via social media.
A key demo uses it. Eighty percent of people are active on Facebook. Millennials are becoming the face of workforce and 90 percent are social media users. “Your employees customers and advocates are on it,” he said.
Payne said business leaders should also use it to thank a representative for supporting something the business owner supports. He added that it takes 30 actions to influence Congress. If you can get customers, employees and people in the community to comment or like something 30 times on a member of Congress’ account, they’ll take notice.
Lopez said almost 100 percent of politicians are on social media and it’s important to follow the legislator on social media. “It’s a good way to react or comment on what they are pushing because they often solicit feedback,” Lopez said.
Lopez said business owners should engage with legislators. Both warned that taking a political stance on social media can cause some blowback, so you have to be ready for that. “You have to perform a political calculus. I am spending my political capital,” so you have to pick and choose about putting your neck out on an issue, Payne said.