Connect Four

  Mark HenningMark Henning’s landscape company survived one of the toughest challenges many businesses face – that of a merger. But what made his experience even more challenging was that after the merger, all four owners opted in.

Henning believes he has been on one long and hard journey in the landscape business. He went into the merger blindly, knowing very little about two of the owners until after the companies merged. He also remembers how frustrated he always was with his company’s business model prior to the merger, yearning to sell his business on several occasions.

Henning began his career as a schoolteacher in the 1970s, working the summer months for a Seattle area landscaper. After four summers on the job, the owner, who was looking to retire, was impressed enough with Henning’s landscaping skills that he offered him to buy out his business. Henning wasn’t sure at first because he had no experience running a business, but nevertheless, at the age of 27, he bought the business, and ran it himself with another employee.

For close to a decade, Henning focused his business on landscape installations, experiencing severe highs and lows both emotionally and financially, without ever quite knowing how to get off of the merry-go-round. This frustrated him to no end, as well as finding that too much of his time was spent chasing the next job. He then decided to sell his business.

When he couldn’t get the price he wanted, he kept the business, shifting his focus to landscape maintenance for consistency. He also for the first time worked with an accountant to prepare a budget and make financial projections. His strategy was to rack up long-term maintenance contracts securing steady work that allowed him to build up his business over time.

In 2000, at the height of the Northwest’s tech boom, Henning thought about selling his business once again. He wanted to focus on a new business that would capitalize on the growing niche to create urban garden spaces for the Seattle-area yuppies inhabiting the proliferating new high-rises and condos. But, once again, Henning found his business difficult to sell. Ultimately, he acted on the urban landscaping concept too late as many other businesses filled that niche.
Signature’s management team started with four owners (from left): Doug Hart, finance and administration; Linda Fox, contract administrator/marketing coordinator; Mark Henning, business development; and Susan Hanley, human resources. Greg McDonald, general manager (far right), joined the team later.
In the spring of 2001, Henning decided instead to merge his company, Henning Landscape Services, with another Seattle area-based landscaping company, Lake East Grounds Maintenance Co. He was mildly acquainted with Lake East through the Washington Association of Landscape Professionals, for which he had served as president and board member.

The merger resulted in a single company with a new name, Signature Landscaping Services. It had two operating facilities, about 30 employees and combined annual revenue of approximately $1.5 million. The newly-formed firm also had four owners, including Henning, Lake East owners Doug Hart and Hart’s sister Linda Fox, and Susan Hanley who joined his company and with whom Henning had planned to launch the urban garden business.

“We all wanted equality of ownership and had to arrive at a formula on how to do that,” says Henning. “I think we finally figured it out quite nicely by managing to evade the trap of internal power struggles.”

The owners’ initial challenge was to divvy up duties based upon their collective strengths and areas of expertise. They also brought in an industry consultant who helped them determine the value of the merged companies. He helped balance the two companies’ strengths and weaknesses and worked through the nuances.

Fortunately, each owner brought different strengths to the table: Hart had a head for finance; Fox is skilled at administration and marketing; Henning, business development; and Hanley, human resources, including employee recruitment and retention. In September 2001, Greg McDonald was hired as the general manager, running the day-to-day operations of the company. He was cut in as a fifth owner.

In August 2002, Signature Landscape Services purchased Northwest Grounds Maintenance, without having to add another owner. It was a good exercise in working by consensus for the owners.

Today, Signature Landscape Services is a full-service landscape contracting firm nearly tripling in size since its inception, specializing in landscape maintenance for the commercial, industrial and multi-family market. Their “signature” includes the ability to work at sustainable landscaping concepts and provide long-range planning for their customers.

McDonald brings company leaders together monthly with a manager’s meeting followed by an owner’s roundtable where key decisions are made and strategies formulated.

“Greg is invaluable in helping the owners make decisions,” says Henning. “Whenever we find two very good ways but (are not) able to agree on one, Greg helps us find a third way.”

Each owner remains passionate about what they do because they are able to focus on their respective areas of expertise and interest, and are at all times cognizant of compromise.

“We learned early on that even when we don’t fully agree on an idea that is important to someone else, we all need to back it up fully anyways,” explains Henning. “Rarely do we step on each other’s toes, but when we do, we are immediately called on it so it doesn’t happen again.”

The author is a freelance writer based in Akron, Ohio.