Tips from the top: Tom Hougnon

For five years I was a branch manager at TruGreen LandCare. Before that, I was 20 years in the golf business developing and building golf courses.

Reliable started in 1983 and all they did was snow removal. Part of the reason I came in was to help start up our summer services, and 2008 was the first year we did any landscape work.

It was an interesting run, that’s for sure. We’re the biggest snow provider in the Twin Cities. We kind of thought, “People like us for snow, why won’t they use us for their landscape and stuff?”

That didn’t really happen.

At that point, we were a quarter summer services, about $4 million at that time. Now, for 2013, we’re at just under $27 million and about $10 million of that is the summer work.

We ended up doing an acquisition and partnership with the Bruce Company out of Madison. That brought in additional snow removal, and also their golf maintenance division.

But the landscaping side of it, there’s a lot of similarities to the golf side. Your crew’s going to the same ten sites for the week versus your guys on the golf course and fairways every day. The guys really get to know their area, and really take a pride in that.

That mid-level manager, that account manager, it’s a tough position. They’re dealing with customer budgets, they’re dealing with our company budget, they’re dealing with hiring, they’re dealing with firing, they’re dealing with managing people in the field and it’s a very tight stressful job.

It’s a great job, but we’re having a hard time finding those people right now. As I look back on it – I love the golf business, don’t get me wrong – but if I was a 22-year-old coming out of college, that is a job that sets you up to do just about anything.

I don’t care where you are in the country or what service you’re doing, margins aren’t getting any bigger. You need that multi-faceted person who can generate revenue for you on the sales side and also do the production.

We’re not seeing a lot of increases in pricing. We’re not getting more money. We’re doing sites for less than maybe we were doing sites four or five years ago, and that trend isn’t gonna go away. The customers’ expectations are still where they were, but think they’re seeing they can get by paying a little bit less.

That’s the running battle we’ve always had: How can you provide both – support your company, support your employees, turn a profit to your investors, but give the customers the experience they want?

You have to make sure you choose customers that best fit your platform. Not every customer is a good fit for us and we’re not a good fit for every customer.

Revenue for revenue’s sake doesn’t do anybody any good.

People look at their own business at the end of the year and they paid themselves this, and they bought two new trucks. OK, it looks pretty good. But you really have to dive into the details of where your profit is. Not only where your profit is, but where you are losing. Where are you bleeding? That’s not always easy to see.

I just had lunch today with three of my biggest competitors in the Twin Cities. A friendly lunch – we give each other a little grief here and there, but you learn so much from everybody, and that makes the business better.

I love talking. If anybody wants to talk about this business, you go talk to them. You’ll learn something from it. I guarantee it. I guarantee if it’s a mowing guy who mows his own stuff with one truck or it’s the vice president of whatever it is, everyone’s got something in this business you can learn from.