HOW WE DO IT: Opening a New Location at Greater Texas Landscape Services

Sometimes, when listening to tales of glory at green industry conferences, there is an overwhelming desire to run with the big dogs. Those of us who are small fish hear the stories of fleets of trucks and fancy equipment and layers upon layers of staff members all reporting to multiple locations. If we could just open a second location, then we would  have surely arrived at success. Ah, the stuff of dreams.
 
At Greater Texas Landscape Services, we listen to all the glories of those industry patrons living the good life while wielding the baton of leadership over a kingdom of lawn mowers, skid-steer loaders and fancy corporate offices. All too often, we get caught up in the excitement of being “big” and don’t stop to think through the wisdom of making these moves.

It is important to be confident and comfortable that the time is right and the company is ready for those big steps. Otherwise, making huge monetary and time investments will insure a disastrous outcome. Knowing when to open a second location, branch or satellite is one of those scary steps.
 
Six years ago, Greater Texas Landscape Services was at that infamous crossroad. Our geographic service area for our commercial landscape maintenance operation had grown, gas prices were on the rise (when have they not been) and the drive time was increasing due to traffic snarls.
 
Whereas in years past, we spent 10 to 12 percent of our crew time on the road, we were now approaching 20 percent. To reduce this drive time, which was very non productive, we had to either reduce our service area or open a second location.
 
We talked to people who operate multiple locations and some indicated that they just took the plunge and invested the people, money and equipment and simply did it.
 
Some said they invested in new real estate while others said they leased space. Some set up full-blown branches by moving half of their portfolio, staff and equipment to the new location.
 
I was not ready to take such a monumental step. I wanted to minimize my company’s risk while reducing drive time, saving money and adding to the potentially shrinking bottom line.
 
What is the magic number or the trigger to know when it is the right time to pursue a second location?
 
It comes down to numbers. We analyzed how much time and money we could save by having crewmembers report to a second location. We calculated the costs of setting up another office. We underestimated the costs, of course, but justified it through the numbers.

We were right on target with the savings. Multiply that by the five years we have had the location and the numbers get even larger as more and more efficiencies are achieved.
 
The first office was established with subleased space with a local arborist. Instead of being 30 miles from our main office, this was 20 miles.
 
As we anticipated, there was separation anxiety by moving a portion of our staff to a new location. At the new location, some individuals felt a disconnect from the main company.

Doing it over again, we would have staffed it with all new staff members to allow those individuals to develop their own identity and not feel as though they are second-class citizens because they are separate from the mother ship.

Our original branch manager spent two days a week with the new “satellite” staff. The owner spent a half-day per week. In retrospect, this was not enough time. Even though we had the business systems well established in our main office, it did not mean they would translate easily to the new location. Leadership was needed.

Within six months after start up, we moved to our own site 5 miles further into the new service area. We replaced the account manager we had moved from the main office to the satellite being careful to look for someone who was a team player, but would thrive in an independent environment.
 
We moved a third of our base portfolio of commercial maintenance contracts to the new satellite office. This was a good move for the company because it gave the team enough work to be fully occupied. Soon the new satellite office grew and served as the catalyst for additional expansion. Within two years, there was enough additional revenue to become a full branch and warrant the hiring of a new branch manager.

We purchased land, built buildings, hired administrative staff and set up a virtual private network (VPN) so the staff could easily access the main branch server for information. There is no magic number for dollar volume of revenue to justify a branch/satellite, however, $1.5 million to $2 million works well for us.
 
The logistics of location and equipment were easy. Staffing, communication and standardized procedures are the real challenges. Before jumping in to open a second location, be sure you have enough money to finance it, the right people to manage it and time to spend cultivating it.
 
Would we do it again? Yes, in fact we’ve done so 100 miles to the south in a different city and we used the lessons learned from the first branching out.

Deborah Cole is president of Greater Texas Landscape Services. She can be reached at dcole@gtlandscapes.com or at 512/462-2311.