25 years and growing

Ken Hutcheson has big goals. From his home base in Orlando, Fla., he runs one of the largest franchise companies in the green industry – one he helped start 25 years ago.

But he’s not finished.

The president of U.S. Lawns wants to grow from his current stable of 200-plus franchisees in 34 states to all 50, and bump revenues from $102 million to a level that would put them among the top five firms in the industry. (In 2010, that meant revenue of at least $272 million.)

“We don’t look for incremental growth,” Hutcheson says. “We look for exponential growth, and that’s been from day one.”

We caught up with Hutcheson to talk about what it’s like to work as a division of The ValleyCrest Cos., the future of the landscape industry and how he’ll reach those lofty goals. 

What’s your average day at work like?
Usually we sleep in ’til about noon. (Laughs)

And then you play golf the rest of the day.
Yeah, schedule a late brunch and then decide what time we’re going back up. (Laughs) Send that one to Burt and our typical day will change dramatically very quickly I’m sure.

I use a line a lot, and that is, “Right person, right position, right time.” Everybody knows the right person, right position. Those are cliché. People write books about that, right? “Right seat on the school bus.”

But I think what so many people miss is right time as well. Today my role is to be a facilitator of things. My role is to help inspire and motivate franchisees from a very high level.

My job is to be looking five years out. What will we be doing in five years with this company? Are there opportunities that we’re missing? Understanding that while we look for opportunity, we also want to remain true to our course, and that’s the same course that we laid out 25 years ago.

What is your vision in five years? What does U.S. Lawns look like?
We have some high-level objectives. One is to be in all 50 states in five years. Second is top five in five. Be on that top five list in the United States of America within five years. We’re number nine today, and we’d like to be in that top five group, and we see that that is a very, very, very achievable goal for us.

Now, to break that top five, if my numbers are right, you’d have to more than double your revenue in five years.

If I had not been involved with this concept for as long as I have and if I didn’t have tremendous faith in the ability of owners to do what owners do well every day, we would not have publically put that goal out there. It’s an achievable goal.

How do you expect to get there?
Well, today we really haven’t done acquisitions to speak of. Some of our franchisees will acquire other local companies, and we encourage that if they can find a good quality acquisition candidate.

Although, that’s not a significant driver of our business at all. Almost all of our growth is organic. It’s through what we do every day. So we have two ways to do that.

One is by our existing current franchisees continuing to grow at the same rate they are today, and we have some very significant operators in these local markets. And then also clearly by adding to the number of franchisees we have in the system. Understanding that when a franchisee comes on, more often than not they’re starting from scratch.

Year one, they grow. Year two, year three, year four, year five, they grow. So the bulk of that growth that we see in the next five years will be our existing franchisees following the financial pattern that they’ve laid out and that we’ve coached them on.

And ultimately we see that typically being in that million-and-a-half dollar range per branch, and that’s what the model has been built around from day one.

What’s the biggest change that you’ve seen in the industry since you started?

People first, tools second. We can build the greatest tools in the world – and I’m talking about processes, procedures, systems – but ultimately people first, tools second.

That’s both the home office team that we have here that supports the franchisees and sells franchises, and the franchise owners themselves.

Where will the industry be in five or 10 years?
History repeats itself. There’s nothing original in this world. What we can do is look at other similar industries to see how they have matured and evolved over time, and I think we’ll see that in the world of commercial. When I look at the maintenance business, I see it continuing to evolve and mature.

I see customers becoming far more educated. I see contractors becoming far more educated and sophisticated.

What other industries do you keep an eye on yourself?
We keep a close eye on the janitorial industry because they tend to serve a lot of similar customers that we do, and they are a very, very mature industry. They also rely completely on labor, which is what we do. We sell labor and expertise, and they do the same. We also watch very carefully the property management industry. These are the management companies that work on behalf of owners managing their properties. We watch that industry, and we’ve seen the same thing there, that we now have many, many national players in that arena where 15 years ago we had few.

What are your biggest challenges facing U.S. Lawns?
Our biggest challenge is building the right team and managing that team effectively. I don’t look outside necessarily. I mean, we watch for threats, but ultimately as long as we’ve got our eye on the customer, we’ve got our eye on customer satisfaction, and we build the right team – we feel pretty confident that the success will continue. Grass keeps growing, man.

That’s good. You’ve got some insurance there.
Look at the last four years. The most dramatic changes in the world that I’ve seen in the last four years going from ’06 to the end of 2010. We’ve seen the world change so much, and in fact in our regional meetings in 2006, our topics of conversation in our seminars and sessions were on building the bench, taking advantage – or being aware of opportunity cost. It was all around how will we get the work done. In ’07 we started to see a little bit of a blip on the horizon.

We saw residential construction slowing. We still didn’t feel anything in unemployment yet, but we started to have some nervousness in the market. In ’08 there was a significant change when we saw residential construction absolutely stop in its tracks. We saw the first rise in unemployment even though it was just a minor rise, and we saw a lot of fear in the market. Again, we’ve had, by the way, record breaking years. Each year we’ve grown.

In ’09 it was – unemployment was hitting 9 and 10 percent and in some markets significantly above that, and we still were growing. In 2010 it was a feel of let’s get back to work, which we did, and we had a great 2010. So I look at that and I say, “You know, that validates the model pretty well.” So when I look for the next five years, I trust and hope that the world won’t see the change and the tension that we’ve seen the last five years.

Is there anything we didn’t touch on that you think is important for our readers?
We’re still working after 25 years with the same set of core values that we had 25 years ago: trust, value, quality, service. That’s not changed one word in 25 years. We still have the same vision, and we emphasize this vision and these values at every meeting we have. This is how we open a meeting, and that is our vision is to be the leader in the landscape industry.

And when we talk about being the leader, we don’t just talk about being a leader in the industry. We talk about being the leader in your community, being the leader in your family, being the leader in your local company. L&L

The author is editor and associate publisher of Lawn & Landscape. Email him at cbowen@gie.net.