Been There, Done That: Success Tips

BILL CANON, OWNER AND PRESIDENT
CANON RUSSEAU LANDSCAPE, CARLETON, MICH.
The smartest strategy smaller contractors can use to position themselves for growth is to get solid systems in place and stick to them, according to Canon. From a mission statement to a business plan to a customer service strategy, establishing systems will set the stage for success. “Even if you’re the only person in the business, you need to have systems,” Canon pointed out. “Without this structure, you won’t grow.”

Canon recalled the days of doing business without one particular system, a clearly defined customer service procedure. “When I started my first company doing residential design/build, I would get paid but I didn’t have good follow up,” he remembered, adding that warranty concerns and complaints from customers soon overwhelmed the company. “As we kept growing and growing, the calls became greater and greater. It got to a point where we could hardly function, dealing with past clients. The problems were killing us.”

Canon finally sat down with his staff and came up with a form letter to give to clients immediately after a job’s completion, clearly explaining what they should expect in terms of service, warranty and so on. After the system - the letter - was put into place, “the calls just disappeared and customers were happier,” Canon related, adding that with smaller companies in particular, these kinds of issues are all over, just begging to be addressed. “There is room for systems everywhere.”

In addition, a system such as a mission statement provides a focus, which is invaluable to growing companies, Canon advised. “What is the company there for? What is it trying to sell? Who is it selling to and why?” he said, offering up some of the questions smaller contractors need to consider.

Canon warned of the danger of getting too sidetracked from a mission statement. “It’s easy to go off on some tangent when you’re smaller, to be drawn away from your focus by interferences,” he said, noting that at one point, he got sidetracked into a garden center venture, which slowed down his company’s growth for a brief time. However tempting a new business opportunity might be, straying from a mission statement “eats up your money and your thinking time,” Canon warned. “Keep it simple and stay focused on what you do well. Be disciplined. Otherwise you’ll get clobbered.”

One more bit of advice: When it comes to drawing up a business plan - another critical system to have in place - Canon suggested that contractors scrutinize all growth and revenue projections. “Critique what you’re assuming. If you assume you can do $1 million in sales, back it up,” Canon urged. “Once you start putting all the numbers down,

back them up. You really need to go through and do the ‘what ifs.’ What if your assumptions change? Be as conservative as possible and don’t create too rosy a picture.”

PERRY BRATT, PRESIDENT
BRATT INC., PLEASANT GROVE, UTAH
Establishing a professional image should be a top priority for smaller contractors looking to make a long-term name for themselves in the industry, according to Bratt, whose family-owned company currently brings in about $8 million in annual revenue. “Image is extremely important,” he said. “Start cultivating a professional image as soon as you can afford to.”

Bratt’s company has differentiated itself from the competition with its unmistakable trucks and uniforms, all done in the company’s signature color: bright yellow. From customer recognition and increased community awareness to improved employee morale and retention, there are countless benefits to this standardization, Bratt pointed out. “Our employees like that they work for the sharpest looking company around.”

While this sounds cliché, all contractors should know that their employees are their most valuable asset and act accordingly, Bratt urged. “Nothing has helped us more than realizing this.”

One way of letting employees know they factor into the success or failure of a business is through open book management - an approach Bratt firmly believes in for any size company. On a quarterly basis, Bratt reviews his company’s financial information (all numbers except wages and salaries with all employees. Open book management motivates employees to view the company as “their own little business,” Bratt said. He has found that illustrating how production is tied to employee bonuses is a tremendous motivator and clearly demonstrates how employee actions affect the company’s bottom line.

“If we can eliminate five minutes of wasted time per hour per employee, the net profit increase would be $126,720,” Bratt said, describing an example he recently gave to his employees. “That’s 80 employees x 8 hours per day x 5 minutes per hour x 198 working days (22 working days per month x 9 months) equals 10,560 wasted hours x $12 per hour (average pay) equals $126,720 additional net profit or $25,344 additional bonus money.”

To get ahead, Bratt also advises networking within the industry as much as possible. “Nothing is more important than to visit with other contractors,” he said, adding that whenever he travels outside of his market, he meets with area companies to gain a sense of how they do business. Of the contractors he’s visited with, in just about every case, “they’re more than willing to share their expertise, successes and horror stories,” Bratt said.

DUANE DENISON, EXECUTIVE VICE PRESIDENT
DENISON LANDSCAPING, FORT WASHINGTON, MD.
Knowing their niche is essential for smaller contractors, Denison advised. His $12-million company has found success concentrating on what it does best - installation work. “We’ve paid attention to our core customers,” Denison said. “From the very beginning, we realized that this was important. We’re not a maintenance contractor.”

Denison also noted that good credit can be a small business’s most important asset in the growth stage. “Without good credit, you’re up against a wall,” he said. Simple things, such as paying bills on time, can work wonders for a contractor who’s just starting out, helping to establish solid relationships with banks and suppliers, Denison described. “You may get products at a lesser price or get better terms.”

From employees and customers to vendors and consultants, effective communication and people skills are also essential for growing a business, Denison observed. “If you can’t communicate, you’re going to have some problems. Pay attention to the people that you’re working for and work with you.”

BILL COX, PRESIDENT
LAWN MANAGEMENT COMPANY, HOUSTON, TEXAS
Cox, who runs a $3.2 million commercial maintenance landscape company in Texas, warned smaller contractors against putting too much emphasis on making it to the $1 million mark - a traditional benchmark for success. “It’s a common mistake,” Cox related. “You can focus so much on that goal that you lose sight of what your business is about - satisfying clients. Focus on customer service rather than just growth.”

Cox recalled a time when he lost his focus. In the late 1980s, when the economy took a downturn, he had hired a salesman to bring in new business. The salesman ended up bringing in too much business, and maintaining quality became a concern, Cox described. To get back on track, he ended up getting rid of about $250,000 in business, to return to a more customer-oriented focus. Going through that “turned me around from being so sales oriented,” Cox said.

“It was a major mistake and it hurt us - we lost a lot of money. Today, the company has no sales staff and I control the growth of the company. We’re not going to take on more than we can handle.”

Cox also suggested that contractors surround themselves with those they can learn from. “You need the ability to bring in the right people,” he said. “Surround yourself with quality.

“An ongoing challenge is finding the right people to bring in as you grow,” he pointed out. “Finding those who want to share your vision. In 20 years, slowly but surely, if you hire people who buy into your vision, you end up with the best people. It’s not by accident.”

One of the keys to growth is employee empowerment, Cox added. “As an owner, you’ve got to be able to trust others to do their jobs,” he said. “After you get more than one or two crews, you can’t do all the supervision. You have to find which area you’re most efficient in and do that. Delegate responsibility and focus on your strengths.”

KERRY ROTOLO, OWNER
JACK’S NURSERY, SLIDELL, LA.
According to Rotolo, leader of a $9-million Louisiana landscape company, one of the keys to a smaller company’s growth is

the ability to delegate and maintain a long-term perspective. “A business manager must facilitate an atmosphere where clients and employees both want the business to succeed because of past performance and in anticipation of a future ability to ‘make it happen’

on the job site,” Rotolo advised, adding that this will help with employee retention.

Another way to keep good workers is to welcome their feedback. Owners must establish a means to include key managers in their company’s decision-making process, Rotolo urged. “Eventually, managers feel as though they can be compensated elsewhere for the same work and effort,” he observed. “By generating loyalty and common causes, a business can continue to grow.”

Judging from his several decades of industry experience, Rotolo thinks growth gets easier as a company gets larger. Life often becomes more complicated for the owner, however. “Eventually, management realizes that getting additional business is easier due to a growing list of satisfied clients, and relationships are formed that lead to repeat business and more negotiated work,” he remarked.

“However, at some point the realization hits that you are not strictly an entrepreneur, but you must also be an administrator, cheerleader, provider of last resort for employees, organizer, accountant, banker, lawyer,

insurance man and forger of the initial infrastructure to carry the company forward.

“It is at this point that many small businesses stagnate or fail as the owner-operator fails, chooses not to, or is incapable of making the transition to owner.”

To the benefit of smaller landscape contractors, growing a business isn’t as isolated an endeavor as it used to be. “There’s a lot more knowledge available now,” Rotolo said. “It is easier to grow a business today because there are so many examples of past successes that have been documented, that an enterprising owner can pattern his company after one that closely fits his situation.”