Change of plans

David Hawkins Jr., and his team at Hawkins Landscaping planned on trying to land a lot of commercial clients this year. Plans have since changed on a dime.

“Once COVID started, commercial work just fell out,” Hawkins says. “We have some of those (commercial accounts), and they haven’t quite spent the money like they normally would. They’re just doing the bare bones to get by.”

That doesn’t mean business is bad. Hawkins estimates their revenue figure will actually hover right around where it was last year, and that’s in large part due to their high-level residential accounts. Where they’re located in Maryland, restrictions on landscapers are among the lowest in the country, Hawkins says.

Even during the middle of a widespread quarantine, his work was considered essential, so in some ways, they kept business rolling without missing a beat. Hawkins says they also kept busy with aeration and overseeding services, too.

“People are taking their vacation money and putting it into their yards,” he says. “When (the pandemic) first happened, people panicked a little bit, but I think a majority of people are balancing out.”

As business slows down for the impending winter, Hawkins says they’re also going to continue working on some of the Harvesters’ other initiatives. The big elephant in the room had been transitioning ownership from Hawkins Jr. to David Hawkins III, his son, who Hawkins Jr. says is already handling most day-to-day work as it is.

Hawkins says he could work another 10 years or so before retiring, but they want to get the formal transition of leadership moving. Part of that involves figuring out insurance and refinancing the team’s farm, plus factoring in an economic downturn that he and the Harvesters say is impending.

Additionally, they’re working on getting more organized with the team’s budget. They planned to shift under the Harvesters’ mini budget but couldn’t get to that before the pandemic struck and changed course for everything. Hawkins says they’ll reexamine their “on-the-fly” budget in the offseason but is ultimately glad with everything they’ve worked on so far.

“Most people don’t make changes very quickly or easily,” Hawkins says. “We want to, but it’s just getting there. We’re taking little steps and those become big steps.”

The Harvesters’ Take.

Pricing is getting tighter and tighter and the residential install back log is getting a bit thin. The Hawkins team is working on ways to deal with a changing market.

We are working with them to get in place a better screening process to help delineate shoppers vs. viable targeted accounts, prioritize install projects that have a higher potential for lang range maintenance recurring revenue, among other steps.

Long-term, we want them to build maintenance revenue to the $1 million level to help make business more sustainable with less emphasis on installs. A couple of ways to do that is trying to sell maintenance to targeted jobs that were installed and building selection criteria for maintenance targets.

The Harvesters also suggested that a five-year plan be put into place for the legacy transition of the business from David (Dad) to David (Son). This is an area all family businesses should consider well in advance of the actual transition.

After several meetings with the Harvesters and family members along with some great spirited “open dialogue,” the Hawkins now have a framework of a game plan with several options to decide on.

After some employees tested positive for COVID-19 earlier in the spring, the company hasn’t had a case as of early September. The good news continues as the company has stayed very busy and has hired a business developer to capture more work.

Frank Leloia and the Harvesters set a goal for the company to have a 50-50 blend of residential and commercial accounts by 2022.

Leloia says he’ll continue working toward this goal and is optimistic about the remainder of the year.

“We’re coming into the selling season,” he says. “We’ve seen some requests for proposals come in, but we feel confident going into next year.”

While COVID-19 has impacted some of his commercial clients, Leloia says there are others who’ve been thriving.

“There’s definitely going to be some commercial places that are more affected, like shopping malls, retail centers and maybe even office complexes with everyone working from home,” he says. “It’s funny, but we’ve seen HOAs spending more money than ever on their grounds...We’ve also seen bigger industrial centers be busier than ever, too.”

Along with securing more commercial work, Leloia says the Harvesters are also helping him get more acquainted with the company’s finances.

“We’ve really been focusing on organizing our financials and knowing our numbers from an operational standpoint and an expense standpoint,” he says.

“We’ve really been focusing on that and gross margins and strategizing on how to improve them. It’s nice knowing what our gross margin goals are. We can operate our business more efficiently to hit them.”

Improvements in HR are also a priority for Leloia by finalizing a handbook and some other policies. With so much going on, it’s important for Leloia to stay focused on the right tasks.

“Basically, I need to be focused more on the business side of things rather than the day-to-day involvement; not that I should stop doing that completely but lean off of it a little bit,” he says.

While finishing out the year with the Harvesters’ help, Leloia says he’s stay committed to knowing the numbers even better.

“We just want to continue to know our numbers better and have a more clear, defined roadmap for where we are as a business now, and where we want to go,” he says. “And we want to continue to work on that plan and go after it.”

The Harvesters’ Take.

Some of the excellent advances Custom Lawn Care has made was to separate the various profit centers in QuickBooks. The actual changes in the chart of accounts was done with the aid of an outside QuickBooks expert.

Now the company knows their gross margins by the month, per department. Leloia is also working with the Harvest Mini Budget.

With this tool, he can obtain his gross margins by the week for each department. He told us his eyes have been fully opened now in that he can see just how low some of his residential work is performing at and can now make the needed changes.

The Harvesters have suggested to Frank from their initial visit that strategically he would be better off to fully move into commercial work and as new contracts are obtained, reduce the amount of small residential clients the company is maintaining. In July, he hired an experienced salesperson that is concentrating on expanding this department.

One area that the Harvesters have spent considerable time in talking with Leloia about is whether to create a totally separate business with his lawn care department or keep it part of Custom Lawn Care. Frank will be taking advantage of having a future conference call with the Harvest Group to weigh the pros and cons of such a move.

All in all, Frank and his people are doing extremely well and will exceed both their sales and profit projections this season.

It was touch and go for Paul Welborn and Lawn & Pest Solutions in Mississippi as COVID-19 caused shutdowns. But as the season continued, Welborn says the company has beaten its new-sales goal of $625,000 for the year and is on track for $775,000.

As of early September, the company is on pace to reach the overall revenue goal for 2020.

“As time wore on and we didn't see as much of an economic impact in our area, I think people got a little bit more free with their money,” he says.

Welborn brought on a business developer and was able to nab a big commercial client that turned over about 75 properties to the company in May and added 25 additional properties in the first week of August.

Fortunately, the labor was already in place to handle the workload. Welborn said this year the company made a more concentrated effort to have people in the pipeline – interviewing and staying in touch with good candidate.

“We ran across a good guy, brought him in, let's say during the month of June and about two weeks later interviewed another guy that we didn't yet need, but felt like we were headed in the direction that we would,” he says. “We went ahead and brought him in and he came in during July.”

One aspect Welborn came in really wanting to change was his inability to delegate tasks. He says he’s about 70% of the way there, but still has trouble when it comes to technical advice.

For instance, if a technician asks him a question about a chemical application, he can be 10 minutes into the discussion before realizing he should have defaulted to the employee’s direct report.

“I should have said, ‘You need to go ask your manager and let me know if you don't get the answer you need,’”Welborn says.

As far as how the year will conclude, Welborn says the plan put in place at the beginning of the year was just what the company needed to succeed in 2020.

“We have had some years where we get to this point in the year and we're like, ‘We have worked so hard, but we're falling short,’” he says. “But if we had not had a solid plan heading into this year, it could have really been a mess.”

The Harvesters’ Take.

On boarding a number of new people in the spring and early summer always presents issues for most companies and Lawn & Pest Solutions is no exception. In order to help The Harvesters suggested that each new person be teamed up with a “Buddy,” to act as a coach for at least the person’s first 90 days. To help bond the employees and foster a positive company culture he also had team meetings and even a cookout at his house with their families.

Paul feels his biggest challenge as he moves toward the end of the season is his cancel rate. Although it’s only 15%, which is far better than most all lawn care and pest control companies, his goal is to get it under 10%. On our last call we thought out the pros and cons of hiring another manager to help reduce this. As of now, the verdict is out on what direction makes the best short- and long-term business sense. Regardless of the challenges Paul and the company faced thus far, it looks like he is moving toward a very successful season.