Different stages of growth

$300,000: Building a team beyond laborers

Up to this point, the owner is pulling weight as “the doer” – the doer of everything, from selling jobs to laboring in the field, from invoicing those jobs to managing all of the business bookwork. This can only last for so long.

“As the owner, you’re doing all of the estimating, all of the marketing, the pricing, plus you are probably working with the crew, so to get up to that $600,000 mark, you need to take your time away from the crew and delegate that to strong crew leaders,” says Jim Huston, president of JR Huston Consulting and green industry benchmarking expert.

A three-person crew in a design/build company should produce $300,000. Add another crew to your $300,000 business and you’ll double the production (and revenues). For maintenance businesses where a full-time laborer generates about $60,000, you’ll need 10 more people to boost revenues by $300,000, and this move will be made gradually.

In the office, a part-time office person is essential at the $300,000 mark – someone who works up to 20 hours a week and can focus on accounting, filing and answering phone calls. Before jumping up to $600,000, that part-time person may increase to full-time, Huston says.
 

Labor reinforcements
Office assistant: Manages filing, word processing, telephone, other basic office needs.

Crew leader: Oversees and directs the crew in the field; works with minimal supervision to carry out jobs according to specification and budget.
 

From the trenches
“Basically, I was overwhelmed and realized I couldn’t take care of everything myself last year,” says Jeff Wichman, president of Wichman Landscape Construction in Pittsburgh. The company was bringing in about $450,000 in revenue at that time.

Wichman says the company lost a project because it wasn’t attentive to the customer. That was a real wake-up call. The business needed ramped-up customer service, but there was no one running the office except Wichman, and he was busy selling and producing.

Finally, he hired an office administrator, opting to bring on the person full-time, skipping past the part-time staff “transition” role. The business was growing too quickly.

“The office person reviews all information from Google Calendar, which we use to generate estimates, and he completes the estimates and reviews the job with employees so we can turn around estimates in a day,” Wichman says. Plus, the office manager addresses customer questions and concerns.

When is it time to move from part- to full-time office staff?

Robin Luce recognized this demand well before his Foley, Ala.-based firm, Jubileescape, reached $1 million. Today, the $3.8 million company has 67 employees, two full-time office staff, three operations managers and two account managers.

“Your accounting numbers have to support hiring a new person,” Luce says.

Huston says, “Having an office manager in place is huge,” for moving up to the next level. So is getting strong crew leaders. “You want these crew leaders to operate with minimal supervision – you don’t want to be babysitting them,” he says.

“You want to depend on these crew leaders to do the work, do the paperwork, and keep you informed about what’s going on in the field.”

$600,000: Building reliable support staff

Not adding additional layers of talent required to reach the next level, and increase sales, can prohibit a company’s upward mobility. Here’s how the numbers shake out to continue on a profitable growth path.

By the numbers, a $600,000 maintenance firm will have 10 laborers who generate $60,000 per year. That could mean five crew leaders in the field, which takes an owner from managing laborers to managing crew leaders. And before that, there’s the challenge of training these good people, Huston says.

Before hiring additional personnel, create detailed job descriptions and identify skillsets the company demands for each role.

“Rather than just saying, ‘I need help,’ consider what type of person you are looking for, what you need to pay them, and what they are supposed to do,” Huston says. (The brief job descriptions you read in this story as labor reinforcements can get your wheels turning – flesh out the details based on your company’s needs.)

“The critical turning point at $600,000 is that the owner is starting to build a team other than laborers, and now there is an office person and crew leaders,” Huston says, adding that this may also mean adding a designer to an installation firm.


Labor reinforcements
Office manager: Manages the company’s IT and HR operations, including accounting, budgeting, finance and administration; may also handle some aspects of scheduling.

Crew leader: Oversees and directs the crew in the field; works with minimal supervision to carry out jobs according to specification and budget.

Designer: Creates landscape designs; may also include sales.
 

From the trenches
Shifting from managing laborers to overseeing crew leaders and other positions, such as designers, is a mindset shift, says Rudy Larsen, president of Lawn Butler in Centerville, Utah.

“If you have the right people on board, you shouldn’t have to micromanage them,” he says. “If the person is the right fit, then back off and let him do the job.”

Larsen says that reading lots of management books and talking to other owners about leading people has helped him get better at overseeing his own team. Today, that’s about 105 employees working in the $8-million business.

The first layers Larsen added to his maintenance-only business were office support and field crew leaders, expanding into operations and account managers.

$1 million-plus: Driving a sales engine, learning to lead

Now that you have reached the $1-million mark, there’s a larger organization to support – and that demands more sales. And adding key positions calls for more sales. Therefore, a crucial person to add to the payroll is a dedicated salesperson or another manager that functions in a sales role, along with taking on other operational, administrative or design responsibilities.

The business structure ultimately determines the next personnel moves, Huston says. Recruiting quality managers is critical regardless of whether increased sales force comes in the form of a dedicated salesperson/account manager, an operations manager with sales abilities or a designer who also sells. “Set clear objectives and have procedures in place in writing,” Huston advises.
 

Labor reinforcements

Salesperson/account manager: Familiar with all aspects of the bid process, oversees interaction with the customer, prepare and present bid documents, completes sales, interfaces with company production and accounting personnel, subcontractors and vendors (as required); also conducts final walk-throughs.

Operations manager: Familiar with all aspects of company operations; manages other managers on a daily basis; creates and maintains a professional atmosphere.

Designer: Designs all aspects of landscape construction; interfaces with production, sales and accounting personnel.

General manager: Familiar with all aspects of company operations; manages other managers.

Controller: Chief accountant of the company; handles accounting, budgeting, IT systems development, finance and administration; manages other office staff; may assume some general manager or office manager duties (if those positions do not exist in a company).
 

From the Trenches
When the time came for Brian Dumont, president of Yard-Nique, to build an executive team to lead his $19.6-million firm, with 300 employees, he sought out professionals from outside of the industry.

The CFO is his father, a retired IBM executive who joined the firm 11 years ago, when the company was young.

The director of sales, who joined the firm four years ago when the it was about $10 million, came from Proctor Gamble. Today, this manager oversees five other sales reps. The COO came from National Builder World.

When Yard-Nique hit about $14 million in 2012, Dumont brought on an HR professional who was previously a regional bank director with 900 people working under her.

As Yard-Nique has grown in size, Dumont’s managerial responsibilities have become more focused. “I used to do all of our sales, and now as we continue to grow, there are fewer people who directly report to me,” he says.