Industry Advocate: The secret behind every green industry business

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There are plenty of negatives about being a grizzled veteran in the landscape industry. For me, being 6 feet 4 inches tall has ruined my lower back (forget the “lift with your legs, not your back” stuff, folks — buy a forklift instead). But the good far outweighs the bad, and you accumulate lots of great stories along the way.

Back when I owned my own business, it came time to change banks, restructure my loans and get a new line of credit. You know the drill. Through some relationships, I met a banker eager for my business. As we began the due diligence process, he came across a line item on my balance sheet for a promissory note. “What’s this?” he asked. I explained I sold several residential lawn care accounts to a buddy of mine years before. The deal was for a few thousand dollars down and a few thousand dollars a month until he paid it off.

The banker was incredulous. He didn’t believe that goodwill was a transferable asset. He told me he wanted to see every documentation related to the transaction and demanded to speak to my buddy. I happily provided him with everything he asked for. In the end, not only did he give me the loan, he demanded the promissory note as collateral!

Democracy of landscaping

None of that is a surprise to any of us in the lawn care business. Mergers and acquisitions valued in the millions of dollars happen all the time, and much of the basis for the valuation is the expectation of future business. Lately, however, these transactions have become more common.

Even more surprising is the entry of mainstream venture capital into the green industry. People with serious money are buying well-established companies across the country. There is a level of maturity in our industry today that did not exist a few years ago. This is fantastic.

The landscape industry is utterly democratic. Not the red versus blue form of democracy, but rather the kind that speaks to equality and lack of snobbishness. A person that didn’t attend college can compete in the green industry with someone with a horticulture doctorate. At some point, every single business on the LM150 list began with zero customers and zero revenue.

It’s humbling to start a business and have obligations staring you in the face with no money coming in. You wonder if you’ll even survive.

Shared stories

Behind each of the LM150 companies is a story — one that will seem very familiar to you. Many of the LM150 companies are multigenerational businesses, while some are relatively new. They are headed by people whose families are growing at the same rate as their businesses.

Sometimes I think it’s hard for someone just starting in the industry to relate to a company doing $1 billion a year. However, the difference isn’t so much a question of dollars — it’s a question of time. How much time has elapsed since the business started and how much time has the owner of the business invested in it? You’ll hear comments from successful business owners all the time about how they’re shocked looking at what they’ve created as if the business took on a life of its own.

Success has many faces; what one person might envision as success might not be another’s definition. For some, it’s being the biggest, while for others, it’s being the best. Sometimes it’s both. Others simply want something that allows for a livable work/life balance. Therein lies the secret — figure out what is right for you.