Greener pastures

In farming, you learn that to sow your own future you’ll work long and hard – that the weather could dictate your success, but your dedication is what brings the harvest. Jon Baedke grew up on his family’s 50-acre commercial apple orchard, working alongside his parents in the business from the time he was young.

“I learned at an early age that you have to work hard to get to where you want to go. I swept floors, folded boxes, did whatever had to be done,” says Baedke, who owns Smitty’s Lawn, Landscape and Garden with his wife, Heather. They acquired the business from a prominent businessman in their Fort Dodge, Iowa, hometown back in 2004. Since then, the Baedkes have grown the operation from a $170,000 “hobby” business to a firm about to break $2 million.

For Baedke, purchasing Smitty’s was a segue from one green industry to the next. He had left the family farm to attend Iowa State University, majoring in horticulture with an emphasis in fruit and vegetable production. For the 10 years following, he went to work for his family’s orchard with its restaurant, bakery, gift shop and pumpkin patch.

“I had a passion for the business and I wanted to be a part of it,” he says of his decision to help grow the family farm. He began doing landscaping jobs on the side during weekends for extra money. Before long, his landscaping work was cutting into his duties at the farm. “I was taking more time off work and it was conflicting,” he says.

So when Smitty’s went up for sale in 2004, Baedke jumped at the opportunity to acquire a solid, reputable landscape firm with roots in his hometown. “It was a small mom-and-pop that was all high-end residential, and that is what I wanted. That was important to me,” Baedke says of going into business backed by a solid name.

Smitty’s focused on lawn care – weed control, fertilization and some maintenance. Baedke added a design/build service to the setup, which at the time was operating from a double-car garage. Baedke kept the operation modest the first couple of years, before purchasing a 2-acre property for a new shop and offices in 2006. Then came snow business, holiday lighting, an account manager and last year, a retail garden center.

“I consider this conservative growth,” Baedke says. And indeed, this is the case, with gradual, steady increase in revenues during the last 10 years.
 

Seeds for growth.

When Baedke purchased the business, the equipment was old and “not as efficient as it could have been.” Early on, Baedke determined that investments were necessary to upgrade equipment so he could deliver the level of service he wanted to bring his clients. “Financing it was tough in the beginning,” he says. The company initially worked through lease or financing programs.

Today, with a healthy cash flow and a decade of operating on the books, equipment acquisition is a regular part of the business. “We make sure we rotate our equipment every three years,” Baedke says, adding that Smitty’s brought on a mechanic to service the equipment regularly and manage minor issues. Elevating the equipment integrity handled one productivity/quality hurdle, but at the same time, and to this day, Smitty’s is constantly seeking quality employees to fuel the growing firm. In a town where the population is about 30,000 people, the workforce is relatively limited, Baedke says.

“The business is there – and the business can still grow – but our biggest obstacles is finding, training and keeping good employees,” Baedke says.

Currently, the company employs eight fulltime employees and has a team of about 15 part-time workers, many of whom stay busy with Smitty’s jobs year-round because of the company’s 200-account snow business. That side of the business brings cash flow to the operation in winter and early spring, before the heavy lawn care, maintenance and landscaping season gets started.

Baedke has had success recruiting dependable employees by offering referral bonuses to existing team members. “If our current employees can help us recruit and bring someone in, we think that is our biggest solution (to the hiring problem),” he says.

Plus, the garden center is bringing in a higher caliber of hires, he says. “Having a bigger presence in the community will help us retain more qualified help.”

Meanwhile, retention year-round is always a goal for Baedke, who wants to keep his good people working even when the main part of the business slows down in winter. That’s part of the reason he added two profit centers to the core business: snow and holiday lighting.

“We specialize in residential plowing and shoveling sidewalks, and we use our full-time people to help us out, along with our part-time people who are laid off and come back to help us during snow events,” he says. “We keep our part-timers at arm’s length.”

Baedke says “we are happy with where we are at” with the size of the snow business, which is about 15 percent of the company’s revenue. “The biggest bonus is cash flow and being able to give our key employees something to do in the wintertime.” Baedke has focused on steering growth, able to take himself out of the field more since hiring an account manager, a milestone for the business in 2007. Of course, bringing on this person, alone, is not enough fill routes. Baedke has learned the importance of keeping this position “active” and motivated.

“We have a daily routine the account manager follows each day so tasks get done in the proper order,” he says of implementing a system to improve this role’s efficiency, a suggestion from a consultant.
 

Expanding the footprint.

Baedke understands how a retail component can bolster a core green industry business. He watched his parents’ orchard thrive with the addition of a restaurant, bakery and gift store. In the landscaping realm, he knew that adding a garden center would provide a similar balance of services and goods.

In 2013, the Baedkes acquired Eddie’s Greenhouse, another reputable business in the area. The greenhouse had been in business for 32 years before it became part of Smitty’s. “I had always dreamed of getting into retail, and a key component for us to acquire the business was attracting the manager,” Baedke says. “If we didn’t get him, we weren’t going to do it.”

The garden center had an outstanding reputation for its bedding plants and vegetables, and the manager running the store has been critical for smoothing the retail/inventory learning curve. The 37,000 square-foot covered greenhouse space does about 80 percent of its sales in the month of May. The Baedkes have expanded inventory to include trees and shrubs, though conservative buying has been the key to ensure fresh plant stock, especially as Baedke gets a feel for the inventory game.

“The biggest growing pain of the retail side is knowing the inventory – not buying enough or buying too much and worrying about sitting on inventory,” he says. “We are using the previous manager’s experience and buying inventory in smaller quantities to keep plants fresh. Plus our suppliers and distributors are helping us make some of those decisions.”

Just a year into the garden center, Baedke says it is the most profitable part of the business. Plus, he is excited about its potential to grow the Smitty’s name in the community and generate leads for the landscaping division.

“When we bought the garden center, we knew the rest of our business had the potential to explode,” he says. In a smaller community like Fort Dodge – and Smitty’s only travels to jobs within a 20-mile radius of the shop – capturing all of clients’ business is a key to continued, steady growth. Baedke says, “People come into the garden center and ask questions about seeding and landscaping, and now we are a one-stop shop for everybody.”