Passing the baton

Ira and Deborah Wade have been in the business for nearly 20 years but still struggle to understand their pricing, compensation and gross margin. They have succeeded in building great relationships with their clients in Goodlettsville, Tennessee, especially on the commercial side, but don’t have systems in place to capture their profits and eventually step back from the business and let their son, Darris, start to take over.

Ultimately, the Wades want to grow Wade’s Lawn Service to the $500,000 mark in the next year, and then to even greater heights in the years ahead, paying off debt and putting themselves and their company in a stronger financial position. They also want to implement the necessary systems that would allow them to step back (Ira is 56 and Deborah is 53) so Darris, 29, can operate the company day to day.

“What we’d like to see happen, honestly, is to get things in place so much so that the company is basically running itself – my son coming in and being the person and Ira and I would like to step back and go into a semi-retirement,” Deborah says.

Consultants Bill Arman and Ed Laflamme say the Wades actually have too much gross margin – more than 50 percent.

“They have so much gross margin it looks like they’re overpricing the market and that’s why they haven’t been able to grow,” Laflamme says. “They go high thinking they have to make it all on the one job.”

Arman says a few more employees – and more productive employees – could mean tremendous improvement in profits for the Wades.

“They haven’t grown,” he says. “One more crew could achieve 48-50 percent gross margin, they’ll have a windfall profit like they’ve never had before. Just add one more crew on. Put three guys to work with another truck and equipment and let’s go to town. It’s all about sales with those guys.”