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Cover Story: Your next big step
1 Mar, 2008 By: Michael Seuffert Landscape ManagementA couple years ago, business was humming along at Southwest Landscape Management in Columbia Station, OH. The company's owner and vice president, Steve Rak II, says the company was growing about 40% annually.
But things started to change as the company neared the $1 million mark. It's not that business was bad. It had just leveled out. Last year, Rak says, the company grew only 3%.
The economy might have something to do with the slow down, though because Southwest Landscape Management specializes in commercial maintenance, it really wasn't hit as hard as other companies that rely more on big new construction and design/build projects.
"Last year was really rough," Rak says. "There's a ton of competition out there, and the commercial landscape maintenance market is getting saturated. We need to find a way to differentiate ourselves; we can't just compete on price."
JP Horizons' Bob Coulter says that Rak's predicament is common in the landscape industry. Hard work and determination can take you far, often to the $1 million mark, but that's where problems within your systems — infrastructure and personnel — often catch up with you. Beyond that, there are other "plateaus" companies hit that are difficult to overcome. Coulter pegs these around $2.5 million, $4.5 million, and even $8 million for the larger companies.
"When a company is larger than $2.5 million dollars, it's not a little company anymore, and you have to behave in a different way," Coulter says. "You have to have some infrastructure in place. You have to have that administrative wing, someone handling the office stuff. You need a salesperson. You need to have production leadership. The owner can play one of these positions, but if the rest isn't there, the whole thing is going to implode."
 Bob Maffei says it seemed like half a lifetime before his company reached the $1 million mark; then it took off. |
Getting stuck on one of these plateaus is not unavoidable. There are steps you can take to jumpstart or re-energize your business and continue on the road to growth and profitability.
People in place
Coulter says that the biggest barrier to growth throughout the landscape industry is people.
"If you don't have people within your organization who can step up and take on a pivotal role, you're going to get stuck," Coulter says. "If the owner doesn't have a key manager he can pass duties along to, the company will get stuck at $1 million. Once you get to about $1 million, you simply can't do it all yourself anymore.
"With the right people, that support mechanism frees the owner to focus on one position — either the customer side or the production side of the equation — allowing the owner to do what's best to grow the business."
Rak realizes this. He recently brought an office manager aboard to handle the administrative duties that we're eating into his time.
"You get to a certain point and you have to leave these other jobs behind," says Rak. "As the business grew, I'd be out on the job and my phone was ringing and my pager going off. I was trying to do 1,000 things at the same time and wasn't doing any of them particularly well.
 Steve Rak, Owner and VP, Southwest Landscape Management |
"Having someone who can handle the administrative tasks like uniforms, insurance, payroll and all those other things frees me up to go out there and really focus on my sales."
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