Keep the cash flowing

Landscape maintenance can be tough, but it’s something “you just have to do,” Ron Monteith says. The president of AllGreen Grounds Management has been in business for 17 years, and while he started out doing just irrigation, maintenance work now makes up 40 percent of his company’s revenue.

It’s great for marketing since the company’s seven branded trucks are on the streets, keeping the AllGreen name out in the community. That brings in new accounts and additional work like mulching.

While irrigation and lighting are Monteith’s biggest revenue makers, followed by design/build, maintenance is crucial for cash flow.

The nearly $3-million company offers landscape maintenance, irrigation installation and repair, lighting, hardscaping and landscape installation in Charlotte, North Carolina, for both residential and commercial customers.

“You’ve got to inspect what you expect.” Ron Monteith, AllGreen Grounds Management

The margins on AllGreen’s maintenance service are tight, but it keeps cash coming in every week, which is the hardest part of managing the busines, Monteith says. “It’s not getting the work and it’s not doing the work, but it’s being liquid enough to fund your business.”

The customers.

When AllGreen started offering maintenance, the clients were 100 percent residential but Monteith’s goal is to eventually have all commercial contracts.

The mix right now is 30 percent residential and 70 commercial, but the cost of gas and time spent traveling to each account really cut into profits on residential routes.

“Unless you can get to a neighborhood where you can pick up 20 or 30 properties, the drive time just kills you,” Monteith says.

AllGreen bills about $30 per man-hour for maintenance crews and when he bids 12-month contracts, he makes sure to give customers a time frame for service since spring and fall work cutting grass and raking leaves takes more time than winter and summer months.

AllGreen splits its eight employees up into two-man crews for commercial jobs and sends one man for residential accounts. On larger jobs, the company will send out more than one truck so that if one crew gets done early, it can move on to the next job.

The big difference, Monteith says, is that residential accounts are more personal than commercial ones.

“When you’re doing a commercial job, they want it to look nice and clean, but they’re not nearly as picky when it comes to weeds in the grass and the bushes being as tight as they want,” he says.

And while commercial clients bring in more money, they’re harder to get. Monteith has found that they often want to come out and inspect his shop and his equipment. That makes it hard for smaller companies to land big jobs since clients might not think they have enough power to get the job done.

“It’s a catch-22,” he says. “You know where you need to be and you know what they want, but a lot of times they’re not going to give you the opportunity to even pick up the work because you have to start off small and grow by adding trucks and employees and equipment before you even have an opportunity to get onto bigger things.”

Growing pains.

Growing as a maintenance company is impossible if you don’t start out charging the right price. Monteith recommends studying the market in your area and charging what the big companies do. Otherwise, as you add more trucks, equipment and staff, the margins will get smaller. “The biggest eye-opener is that growth means more expense and sometimes you don’t see that coming until you get into it and you realize, ‘OK, I’ve had two guys and now I have six guys and I don’t know why I’m not making more money,’ and you’re not seeing what’s happening with your insurance bills and all of your other expenses,” he says. And if you start off in maintenance hoping to offer other services like landscaping or irrigation eventually, be sure to study the market to make sure you can afford to hire a licensed professional, Monteith says.

The crews.

Finding good help is always a challenge, and Monteith says he usually ends up letting employees go before they quit.

“I can’t look at somebody and tell if they’re going to be a good employee. A lot of times you just have to hire them and see if they pick up on what we do,” he says. “I don’t feel like cutting grass is rocket science, but there is a process you have to follow and if they’re not willing to follow the process, they’re not going to last very long.”

He says it usually takes four to six weeks to figure out if a new hire is cut out for lawn maintenance work, and a lot of the job is just sticking to the routine, which can get tough when working long hours or in intense heat.

“Unless you can get to a neighborhood where you can pick up 20 or 30 properties, the drive time just kills you.” Ron Monteith, AllGreen Grounds Management

To make sure every job is up to snuff, AllGreen’s operations manager inspects jobs once they’re completed. Monteith has noticed that if employees don’t know someone is following up on quality, things start to fall through the cracks.

The operations manager will inspect properties and pick up any slack left over. His team also spends a lot of time on the phone with customers to follow up and make sure they’re satisfied with the work.

And it seems to work. Monteith says he loses very few maintenance customers, keeping that weekly cash flow coming in. “You’ve got to inspect what you expect,” he says.