INDIANAPOLIS – Growing the company to the point where it operates out of multiple locations, perhaps even in numerous markets, is part of the end-goal for many lawn and landscape professionals. Be it through increased density within one market or by grabbing revenue from multiple cities, expansion equals more sales and greater profits.
Oftentimes, this proves true. But the other side of the coin is that successfully building and then managing multiple locations is a challenge unlike any other for contractors. This was a Breakfast of Champions discussion at this year’s Green Industry Conference, Nov. 4-7, 2000, put on by the Associated Landscape Contractors of America.
MANAGING EXPANSION. "We have one branch, and it’s in Charlotte, N.C., and two satellites in the Atlanta, Ga., area," explained Keith Warsham from Post Properties. "The difference between the two is that the branch has its own administrative staff and operations manager, whereas the satellite locations get administrative and operational support from our primary Atlanta location."
"Why do we think we need more branches or satellites?" asked Frank Mariani, Mariani Landscape, Lake Bluff, Ill., which opened a satellite one hour south of its primary location last year.
"We needed the branch and satellites for customer satisfaction," responded Warsham, noting that the notorious Atlanta traffic was requiring too much drive time for crews and hurting the company’s ability to bid competitively. "Having a satellite allows us to boost our response time when there’s a problem and offer more face-to-face communications with clients."
"We’re looking at expanding because our facility can only hold so many people," added Jeff Rieger, Dennis’ 7 Dees Landscaping, Portland, Ore.
"There’s also an issue with the employees’ tolerance of how far they will drive," observed Dan Foley, D. Foley Landscape, Walpole, Mass., who added that he’s exploring the concept of securing a series of small, 1-acre locations instead of building his company on one, 10-acre spot. "And a new location can also expand the area we can pull from to hire employees.
MANAGING COSTS. "We have 18 acres at our main location, and there’s a bunch of nursery stock grown there as well," noted Mariani. "I like the idea of owning my land, but it was too expensive when we looked for a spot for our new location. Plus, I didn’t want to build an office yet because we want to grow our business out of this location quickly, and I don’t want to build a facility that is too small in a couple of years."
In addition, Mariani observed that the nature of the services to be offered out of an additional location can significantly impact the cost. For example, offering design/build or installation services from a satellite will likely require enough land for a nursery or holding yard, and that will require installation of drip irrigation. "At that point, you’re almost talking about opening a second business," he commented.
"Handling the service and shop is a real concern with my model," recognized Foley, "because we won’t be big enough to support the necessary inventory and a mechanic at each location."
MANAGING WORK. An additional challenge associated with opening a new location, and one that literally frightens a number of managers and owners, is how they can ensure that the work gets done in the proper fashion at a new location unless they are in that office regularly.
"You really need to have systems, and you need to have everyone following them before you set up satellites or branch out," recommended Mariani. "You have to go right down the checklist of how you do everything because you can’t drop your standards. How often do you change your mower blades? How do you dispose of the trash? And so on."
MANAGING ADMINISTRATION. Another question companies have to address when setting up another location is how to handle administrative functions, such as payroll, accounting and purchasing. The participants around the table for this discussion agreed about the benefit of keeping these functions centralized at the primary location.
"We do all of that out of our main office, and that gives me a lot of comfort," Mariani pointed out. "We even have their phone calls come into the corporate office, and then we transfer them to the branch. I think it lets the employees in the branch know that they have the support of the corporate office. We have a very strong account manager who runs the branch, but we make sure we bring all of the key people to the corporate office for a company-wide management meeting twice a month so they’re not losing touch with the culture or feeling isolated."
Mariani also noted that performing regular customer surveys and job inspections for the work being performed out of the new location is important to make sure the company’s standards and level of quality are being maintained.
The author is Editor of Lawn & Landscape magazine.