Outsourcing made easy

With labor being an ongoing struggle for green industry companies, and with remote work more popular now in the wake of the COVID-19 pandemic, the need to reshape business models and potentially outsource certain tasks is greater.

During the Bruce Wilson & Company 2023 Thought Leaders Retreat in Miami, a panel of three landscaping companies shared how and where they are outsourcing things to make their teams more efficient. Panelists included Charlie Johnson, president of Outdoor Systems Management; Chris Lee, president of Earthworks; and Johannes Louwers, COO of Southview Design.

The first thing panelists discussed was the benefits they’ve already experienced when it came to outsourcing.

For Southview Design, Louwers says finding subcontracting partners that felt like real members of the team has been a godsend.

“Three years ago, when labor force was really tight, we classified two types of workers — classic subcontractors and then classified a new group of workers called sub-partners — other landscape companies in the Twin Cities…they were still their own company but run as if they were our own,” he says “It helped us install all the work we had because sales were going nuts after COVID.”

Louwers adds that by bringing on the sub-partners, the company’s design/build margin increased by 5% in one year.

Lee says that at Earthworks, the places where the company is outsourcing are the things that don’t align with his, or other leadership team members’ key strengths.

“There are certain things that we know aren’t our core abilities and we don’t want to be experts at these things,” Lee says. “Outsourcing and fractional positions has helped with growth and has bridged that gap where we can be financially responsible.”

It’s financially responsible, because instead of jumping into a new service headfirst, Lee says subcontracting with another company beforehand to see how things go allows for him and Earthwork’s team to make better long-term decisions. 

“It’s helpful to maintain that conservative mindset and be debt free,” Lee says.

At Outdoor Systems Management, Johnson says the company outsourced its administration roles.

Johnson says the motivation behind this move was to eliminate having one person responsible for all administrative tasks and then the fear that they’d leave the company and Outdoor Systems Management would have to start all over with a new person.

“I didn’t like that risk or that exposure,” Johnson says. “We just farmed out the administrative piece and they used our accounting program.”

Johnson noted some unintended benefits the company noticed early on was that operation costs lowered from 12% to 3%.

“We’re able to scale a lot better — we don’t have to worry about training them and bringing them up to speed on our culture,” he adds.

Johnson suggests finding a company that will adopt to your existing systems rather than making you switch all your information into their system for them to take things over.

“Find someone who is able to adopt your systems and run with it, so it doesn’t interrupt you or your staff,” he says. 

Other areas where the three companies have outsourced duties and found success are:

• Fractional CFO — Lee says having a fractional CFO has been great for Earthworks because they still get all the insight and knowledge but without having to justify a CFO’s full-time salary.

   “We realized there was a gap there, but we also realized there wasn’t a $250,000 gap that would justify bringing in a full-time CFO,” he says. “We meet with him weekly, and he challenges us on the numbers. Sometimes he may ruffle some feathers but that’s exactly what we need.”

  Johnson, who also utilizes a fractional CFO, says having an outsider’s perspective on the numbers can be more beneficial than bringing someone into the fold.

  “It takes a lot of time to get that kind of person up to speed,” Charlie says. “Working with the fractional CFO still keeps you as the owner involved. You’re just getting an outside, unbiased, professional view that you get to then take and employ into the company.”

• Marketing and Social Media — While Southview Design has a dedicated marketing professional on staff, they still outsource some tasks.

“We have an in-house person who handles 90% of our in-house campaigns but have an outside firm that handles our website, its content and our marketing analytics,” Louwers says. “Being able to outsource a portion of it allows her to bring in new ideas and been a huge benefit for us.”

Lee says Earthworks also employs a marketing firm.

“We outsource all of our marketing,” he says. “We don’t have a huge marketing budget. Everything comes from referrals and word-of-mouth.”

“We use marketing primarily for brand awareness and education,” Lee adds. “We meet with the people once a month and we set up a quarterly calendar. It’s a fraction of what a full-time employee would cost.”

The only caution Lee warned attendees on is that sometimes it takes time to get an outside marketing company up to speed with the industry if they have no previous experience in it.

“It did take time to get eye-to-eye as they weren’t familiar with our industry,” he says.

However, when it comes to outsourcing and bringing outside people into one’s company, there are bound to be concerns on culture and brand awareness.

Louwers says when deciding to go with sub-partners, culture was their biggest concern.

“We ended up making them part of the Southview family,” he says. “Whatever event we hosted we invited them. We ask them to come to our monthly safety meetings. Any company update we have, we give them access to that as well so they’re abreast of the happenings of our company.

“We’ve got nine sub-partners and they keep coming back every year,” Louwers says.

On the other hand, Lee says Earthwork’s subcontractors don’t have much impact on company culture or brand awareness as they don’t directly interact with employees or customers.

“You just have to drop them in and let them learn,” Lee says. “They don’t have an ability to directly impact our culture without coming to our executive team and getting approval for it. All that stuff is filtered before it ever hits the team.”

Johnson says the best advice for any outsourcing partner is just to do your due diligence and research them thoroughly ahead of time. And make sure any expectations of them are explicitly laid out.

“Make sure their name is known well within the industry,” he says. “Do your research…Hold them accountable to those expectations and include it in the contract.”

At the end of the day, Johnson says it’s money well spent to outsource administrative duties.

“Having someone who does it professionally for many companies and operates at such a high level, the efficiency is far beyond anything we’d be able to do in-house,” Johnson says. “As an owner, it takes a tremendous amount of work off my plate. What they can do with the money we spend is far greater than what we could do in-house with the same amount of money.”