Fuel, Fertilizer, Frustrations: How to Know Your Margins in June, Not December | Podcast Ep. 281

Hello and welcome to Toolbox for the Trades. My name is Amanda Salvatore, and today I am bringing you an amazing conversation with John Gohl and Travis Wills. I had the opportunity to host them on LinkedIn Live where we really dug deep into what's causing headwinds for the landscape industry this summer. I had a blast having them both back on the show for a second time, and I hope you enjoy this conversation as much as I did. Hello everyone and welcome. Thank you so much for joining us for this LinkedIn Live. Really excited to have a conversation today with John Gohl and Travis Wills. Fuel fertilizer frustrations. Know your margins in June, not December. We're gonna find out all why that is and what you should consider now that we are in mid-season. I am joined by John Gull. He is the Director of Customer Experience with Aspire, as well as Travis Wills, who is Senior Manager of Advisory Services with Aspire. If you know Toolbox for the Trades and if you know Aspire, you most likely know John, you know Travis. But for those who are maybe new, John and Travis, can you give us a quick intro on who who you are and your experience in the landscape industry. Let's start with you, John.

Super happy to be here. Been with Aspire for, I think, going on 13 years, a bunch of days, Amanda. I've been here with Travis for quite some time, was in the implementation side prior to that, leveraged systems similar to Aspire in the commercial industry space, uh, running like large mowing, horticulture operations, etc. Great.

How about you, Travis?

Closing in on 10 years at Aspire, which is really impressive in any room except the one I'm in with John Gohl frequently, but really excited to be here. Currently sit in an advisory services role at Aspire where I get to blend my experience as both a landscape contractor and the 10 years at Aspire working on the software to better understand how clients can be successful. And it's an exciting time at Aspire.

Thank you both for joining us today. I'm very excited to get into it. Before we get into the nitty-gritty, let's get a picture of what this summer looks like. How does the landscape industry look right now and what's its current state?

You know, Amanda, I think about the unexpected costs going into the season. We've seen some fuel charges like drop, I think as of today, which it was unexpected. There were some questions about fertilizer costs, material costs. I have heard out there that there's some difficulty. We had some trouble with labor, right? A lot of folks either did not get visas or visa workers came late. And then winter. I was in Colorado just a couple days ago for the NALP field trip with Timberline where winter in Colorado didn't really happen. We heard about winter being like longer out in the Northeast. When I think about our customers, like while we see fuel costs, material costs, et cetera, going up, sort of food costs and things, I think people are a little apprehensive right now about spending. But that's kind of like what I'm feeling, Travis. I don't know about you, but every spring it's always different here in the landscape industry, but this one's been a little bit more unusual.

Yeah, I think that's, uh, really fair, John. There's always volatility in, as we navigate the season, and it's been a little bit more abnormal than normal, if that's a phrase. I don't know if I'm allowed to say that, but, uh, that's what we're going with. And I, I think the costs have been up and down and it's caused some anxiety. And I think there's also some pressure, uh, where, you know, sales aren't coming in quite as easy as they have in the past. And that's, uh, you know, doubling down on that pressure.

And what I do want to commend our audience, especially those from the landscape side, is these folks know how to pivot. They know how to change. They've been up against everything, like the visa thing, the labor challenges. A lot of the challenges that we're going to talk about today aren't necessarily new, but they do know how to react, and we just want to provide some insight on some things that they might be able to do.

So we did talk about this idea of unexpected costs. With fuel and fertilizer and chemical costs hitting a bit harder this summer, what can business owners actually do to mitigate those rising costs?

It's a great question, and I've talked to a few people about it. I know Paul Friend had done some conversation with us. He's out at Sun Valley out of Omaha, and there was some talk like, do we add that surcharge? I think there was like a COVID surcharge. Like, we definitely had to build it into the Aspire system. And there's a couple different opinions on it. And I would weigh that most people aren't going to like add it visually to the invoice. It's something that's happening, competitors are doing, but it's something that they're saying, hey, I'm not going to do that, especially with like a commercial maintenance contract. I'm going to honor the cost I'm already charging. And while it's like a 1-2% to their bottom line, it's, you know, it's something that they're going to just hustle with, but I think Travis has got some insight in terms of like regarding extra work or new work we're selling, what we could do to mitigate that.

I really think there's two different approaches here. For the contracted work, John, like you were talking, I think there's a lot of damage you can do to your credibility and the relationships you've built by adding fees in on top of your contracted prices. If you have the foresight to have that in your contract and you're prepared to do that, like, absolutely you can do that. But even then, before you make the decision to do that, think about how that's going to be perceived by your customers and if the dollars that are coming in are actually critical to your business. The flip side of that, if you're proposing new work today and you're using costs that are 6 months old or 12 months old, I do think you're doing a disservice to your business and you're leaving dollars on the table. We should be creating estimates that are based off of the realities of today. And hopefully your system allows you to see the cost that you're putting out, see what those quoted prices are today, and you can make adjustments to how your pricing works so that you can continue to be profitable even as we navigate ups and downs of rising costs.

How do you make smarter purchasing decisions in a difficult supply environment? You know, we, there's so much, there's so many chemicals, there's fertilizer, what should they consider?

There's a couple different ways to look at it. Both of us have implemented, well, the Aspire system, but across the country. And I feel like purchasing is one area where folks have struggled, whether it's using a purchase order system with PO numbers, which definitely holds people more accountable. It's something that seems to always come up. I like to see what Marty Grunder is doing. They open a PO for the week or a couple POs for each vendor, but they have material delivered once a week. They know who to staff at the office, how to execute the unloading, the sorting, et cetera. And I think that's given them an advantage. And for those people that are listening, like, definitely check out a Grunder trip to his office. They perform a symphony in the morning. And I think there's just some really cool tips and tricks that you can learn in terms of what they're doing with purchasing. But it's also forecasting, and I'll kind of turn that over to Travis. But looking into the future, what do we have to do? How do we talk to vendors, et cetera?

Love the Gründer Symphony to get the day started. It's a great way to get connected to your team and manage the time getting out the door. The purchasing process is really interesting. We talk to really great clients and great operators that have really dialed in all the aspects of how they do maintenance work, landscape maintenance work or installation work. But really often we find purchasing processes that are the opposite of that. They're the afterthought. And before we, like, get concerned about what costs are doing, uh, let's just recognize that if you don't have a purchasing process dialed in, I Like, it doesn't matter what the costs are doing. You're spending way more, wasting way more cost, um, in not having a good process than you'll ever save in working with your vendors. So start there. John mentioned the, the Grundeer process. That's great. It's not the only one that can work. Lots of different ways to get that dialed in, but make sure that you do have it dialed in. You're managing your costs well. You're purchasing what you need. You're getting those at the right time. And then I think it's really important as you are thinking about how you manage costs and how do you lock in what the future cost might be, it's really about vendor relationships and building partnerships with those vendors. Oftentimes, you know, if you're selling work ahead, you know what material— materials that you're going to need to be able to provide services throughout the year. You can lock prices in early in the season with a vendor partner. They can partner with you in like how to house and store that material, make it available throughout the year. Lots of good stories that we've heard where partnering really well with your vendors on that front can help not only save you money, but also the hassle of like potential shortfalls in materials later down the road. So, you know, I'm a relationship guy. I think vendor relationships are really, really important in this business. They're the things when it gets really tough out there, they're going to partner with the companies that are helping them out as well. So develop those vendor relationships and, uh, That'll, that'll make a good investment.

Let's shift over to labor. I know that labor is one of the most important, if not the most important factor when it comes to your business. So with visa workers coming late and ongoing recruitment challenges, how is labor affecting businesses right now?

Well, we had a lot of folks not get labor. They didn't get visas. A lot of folks had visas come late. I've been there. I've lost 180 people I thought were coming. They didn't. And a lot of those folks knew our properties inside out. They knew the route, the ins, outs, the dos, don't dos. It puts pressure on new folks. So do we have tools like sitemaps? Do we have direction operations, like things that everyone sees when they get to the property? I think are pretty critical. Thinking outside the box, which I think we'll get to later in this talk, Amanda, but recruiting folks, you know, recruiting never stops. It's a big deal. Looks like we might have some good news next year, and I'll let Andrew Bray and the team at NALP deliver that. We're looking better for next year when it comes to visas, but it's a big struggle. Labor's never easy in this industry. I think folks are not attuned to doing this. And that's where companies like us with NALP have to discover a new bloodline, whether it's through recruiting or getting us just more recognized as a trade, as like a legitimate industry to get into. That's a hat that each and every one of us listening to this call own.

One area where I think it's really important is that we recognize the challenge that labor is in the business and I've been around the industry for a few years now, and labor was an issue then, and it's been an issue, you know, at some level every year along the way. So we can count on it being an issue. And I think that what that tells us as business owners is that we need to really invest in our people. When we get people on the team, we need to continue to pour into them, to develop them, to build them into the leaders that we need so they're going to take really good care of the next frontline employees that we get. So part of the problem is it's hard to find labor. Part of the problem is the work is really hard and not everybody wants to do it. And part of the problem is the work's really hard, people don't want to do it, and we don't treat them very well while they're doing it. And we make it not that easy to do. And I think we've seen a big shift in that in the last few years. But if you haven't already made that shift, I think really investing in your people will help to smooth out those labor challenges you see. You may end up paying a little bit more per hour for the labor that you have, but it's better quality labor, better results, and they're more bought into the overall vision of your company.

From having conversations with owners and operators for the past 2.5 years, that always comes up about investing in your employees, treating them well, and giving them that sense of ownership. And pride in the work that they're doing. They feel like they have value and that you see them. I think that's really a huge factor when it comes to labor. There's this phrase, work smarter, not harder. So what, so what does working smarter with your existing labor actually look like? Let's talk route optimization, on-site versus off-site time.

Our clients get to see, the landscape client gets to see things before and after, and so do our people. When I think about retaining folks, it's reminding them like, look what you just built. So cool, right? They get the same reward. And I think when it comes to, to the working smarter, obviously we can get into reporting and I'll leave some of that to Travis, which is like, how did we perform this week versus last week? What's left on the table, really investing in those folks and understanding like you are making an impact whether you know it or not, whether you just mowed a lawn, pruned some shrubs, and saw some flowers. Check out what you did. I think that's a big deal. And I think it's not smartening up our employees, but more like enlightening them to say, you know, you are a master of the craft and this is what you just created, so check it out.

I like enlightening them, John. I think that fits as working smarter. There's a couple metrics that I think are really important and I'll lean back into like investing in your people and your leaders and helping them to understand how the finances of the landscape business work. I think we get stuck on gross margin and, you know, employees see gross margin and they're like, wow, that's a big number. A lot of dollars in that bucket. Uh, but they don't understand all the other costs that go along with running the business and what that really looks like. And, uh, the more you can open up and show them that the actual profit is, uh, you know, pennies on the dollar, not half of it, I think it helped them understand the impact they have as they're managing their time on, on the crew and in the field. When we're thinking about metrics, obviously you got, you gotta know how you're performing, right? Uh, everybody's got a scoreboard. The scoreboard for landscaping should be like whatever you estimate. Is how you should go perform that work. So you gotta understand, have visibility into what that looks like.

Travis, can you just dive a little deeper there? 'Cause I'm thinking maintenance contracts where my margins aren't like they would be in an install. It's tight, right?

Yeah.

So how did I perform last week, year to date, and then what's left in the rest of the season is where I want to go.

Yeah. So if you're looking at your hours, primarily hours, you can look at dollars too, estimated versus actual, you can see how you're progressing throughout the year. If things aren't going to plan, you have the ability to, you know, use your brain and your resources to make decisions to alter how you're attacking that property. You may choose to invest in a new piece of equipment to help reduce hours because the hours are going to cost you more than the piece of equipment would be. You may need to make other operational changes to be more efficient on site. But it's like, you can't make those decisions unless you're aware that there's a problem. And the awareness of the problem comes through the scoreboard and understanding how you're performing on those jobs. And then just one other area I think is really key, kind of like one step further back than just like job by job, how am I performing? How much of my time am I actually spending producing work versus riding around in a truck, getting there, or, you know, doing other nonproductive? Tasks. Best companies are tightening those routes up and getting 90% or higher of productive time in their days. And that's a game changer in, in the landscape business.

And that's as simple as Travis, right? Like reevaluating, like, what are we doing to get off the lot in the morning? What's the lot look like? What's it like at the end of the day? I guarantee what's happening in the morning on the lot, it's going on properties.

Yeah.

So if we're not tight there, we're not tight when we get there. Yeah.

Last thought on this. I think it goes back to investing in your, your leaders and, and helping them to understand the bottom line. If you're just running around the lot in the morning yelling at everybody to, to get off the lot, right? That's not the culture that you're trying to build. But if they understand the impact of the time that they're spending on the lot not performing work, uh, as opposed to going out and actually making the landscape better for their clients, and then it starts to connect with the right employees.

Yeah, I think Travis, Amanda, we're like late in June right now. So for some folks, we're just getting settled in to what we hope we can call summer. But now is the time to take a look back, reevaluate the business processes, procedures, whether it's the lot in the morning or in the afternoon, what's happening out there with our crews, reevaluating properties where we should attack, where we should conclude. Like, now's the time to get on that, not just for the remainder of the year, but for next.

Speaking of talent, speaking of employees, there is this shortage. So where should people be looking to find new talent? What does that pool look like today?

Well, I think as you look at your company, your tech stack is probably growing. So as a leader in an organization, I'd start thinking top-down, whether it's challenging yourself as a leader to embrace technology, but I think it's more so, and something came out with NALP magazine this week, Britt Wood was talking about it a bit, it was about finding the right people to run technology, and it's, I think, It's thinking outside the box. We've always traditionally hired a certain persona or person going, wow, you know what? There's some pretty tech-savvy young folks that are interested. They want to make a difference in landscaping or environmental services and reaching out and recognizing like there's a whole new generation here that can make this happen. We're seeing it through the Aspire in the Classroom. In collaboration with NALP. I feel like the horticulture major at universities is picking up. It was losing some gas in the past couple years, but there's a lot more interest there. The way technology's changing, people want to get their hands back into the dirt kind of industries. I mean, trades are popular now, and this is a great time to attract folks to that. And I think the people that join the trades whether it's plumbing, HVAC, or horticulture, landscaping, there's a lot of momentum moving, a lot of interest in this landscape of options for young folks, and it's attractive.

Yeah, John, I'm, I'm glad you mentioned Aspire in the classroom. I know, uh, you work closely with those universities. I think it's an incredible program. Uh, really proud that, uh, Aspire's partnering to get technology into the classroom and Seen a lot of like really positive outcomes from that. Got the chance to go to NCLC this year and see so many of those students that have been using the Aspire in the classroom and now hearing stories of them hitting the industry and, you know, connecting with them as Aspire users is just a really cool evolution.

Travis, we've got 250 students getting into the industry that maybe not have been there. I think it's cool. And it's usually larger organizations that are looking for folks at NCLC, but that doesn't mean you can't do it at your local tech school or your local high school. Like, the opportunity's there for everyone. It's sitting in your neighborhood. Embrace it. Let's go.

Totally agree with that. And really appreciative of, uh, the leadership of Mark and Kevin as they built Aspire and wanted to not only, like, build a great company, but help the entire industry. Kind of level up the game when it comes to technology. As we think about it, like, in the business themselves, John, you mentioned kind of like that different persona, a different type of employee that now might be attracted. This gamification word gets thrown around in the software world, basically just like making the job fun, right? Having a little bit of competition and keeping score. That concept's always worked well, but obviously really well with technology and I think there are a lot of people that use technology that are interested in robotics and, you know, all the areas that we're going, AI, and we can bring them into the industry with all the opportunities that we have inside the industry to utilize those tools to make our services even better.

We talked about persona and we've talked about labor, but there is this idea within hiring about soft skills. That you can't really teach soft skills, right? But I think that we forget that we can strengthen soft skills with our team. So there is a bit of a growing gap with these soft skills. How do you strengthen those with your team? What would you guys suggest?

Soft skills are so— they're a big deal. And I've said it time and time again, we're all within this industry almost like an urban farmer. If Travis has a field across from me, I actually heard this at Timberline, um, just in Colorado last week, and the owner was talking about branding cattle. And while they're in competition with the ranch next door, they brand together. And that's how I see folks in this industry working. We work together. The soft skills, the relationships, if you had to add a service charge or fuel surcharge or some extra charge, like economy's in trouble, people probably likely understand it if you have that relationship. Unfortunately, you might not, so you don't do it. In the future, those soft skills, relationships are gonna be key. I know you, I trust you, you deliver, the integrity's there, let's get it done. Yeah, I do see it being a lost art. Um, you can hide behind your email. Your texts with things like AI, fantastic. You can sound like a Supreme Court, like, judge until you show up. Be careful of that. But yeah, I think relationships are gonna be critical and there's some opportunities out there and I'll let Travis talk a little bit more about that. But just folks in the acting world, I know there's some simple basic classrooms or community programs people can leverage. We discovered somebody on our team We're going to leverage that person, like help us communicate better. Travis and I both went through a public speaking session a few years ago, and I feel like it was a game changer. Travis?

It was really good, John. Public speaking is actually one of the things I was going to talk about. I've got 4 kids that are like navigating out of their teen years into the early 20s. And one of the things I encouraged them to do in both in high school and college was to get into a public speaking class. You know, the technology that is coming now, is here now, is incredible, man. I, it's super helpful. But at some point, like, you have to be in a room with someone and communicate directly face-to-face or on a Zoom call. The people who invest in those skills are going to stand out. So if you are young and in the industry today, you want to stand out, learn how to communicate and be confident in a room full of peers. You still need to learn how to use AI to do your job really quickly and efficiently. That's great too. But, you know, stick your hand out and shake a hand and make eye contact and all those good things. Be confident in how you're conducting your business. And I think those are going to continue to separate really good employees from the rest as we get more and more into what technology is bringing into the, into the world and the business world.

Yeah, you've got to own it. If they own the property, I've got to own what I'm going to deliver to you. It could be basic role-playing, right? Just amongst our peers. My wife is in the insurance industry. They do it every week and it pays off. Basic feedback. We did it in a workshop just a couple weeks ago and account manager to owner persona. And it's, it's fantastic.

All of our landscaper friends heard acting classes and tuned out, but it is really valuable. I can't overstate how important it is to like learn to build some confidence and, uh, have the skills that you need to, to walk into a room and be able to communicate clearly with your clients.

Talk about this mid-season audit. We kind of hinted at it at the beginning of our session. I know most people are checking their numbers at year-end. Why is that too late and what should they be auditing right now mid-season?

I don't think enough people out there are aware of where they stand. Whether it's going into spring with no winter, coming into spring with the winter, I don't think they know where they're at. And the spring rush comes, it's, I gotta get my, my lawns mowed, spring services done. I'm throwing everything at it that I can. And then they get settled in and maybe they're just like, oh my God, I just wanna move on to fall. And, uh, I think it's where it's stopping. Taking his deep breath and kind of like getting a physical with the doctor, like seeing who are we, where are we, and what do we have to do to get to who we want to be. I think it's something a lot of athletes go through regardless of the season, but I think every pro stops and evaluates himself's performance and gets on with that. And Travis, for the Aspire customers, has got something cool, but, but it's not necessarily something that folks that aren't Aspire or not on Aspire can't do. And that's just checking yourself. And I know Travis has got some words on that, but I'll turn it over to you, bud.

Before we get to that, like, I think about this time of year, for most of us, the spring sprint is over, or at least we can see the finish line. I think, you know, even in the most northern markets, July 4th is kind of like the end of the sprint. Like we, we've made it through that part and we're at this point in the year where there's still time to make a significant difference and impact in your business as you're operating. But if you don't know where you stand, then you don't know like what the goals are. Like maybe you set a goal back at the beginning of the year to be at a certain revenue amount or profitability. All that's great, but taking the time to find out where you stand today, how well you're doing. On that and like what's left, uh, as the runway can really help you to understand like what you need to go do to hit those goals. Maybe spring's been really tough and the labor challenges have put you behind the 8-ball and you've got additional people that you're paying for, but the results haven't been quite what you've wanted. So you've ended up spending more, or maybe it's other, uh, pricing, uh, concerns. So like take inventory of where you're at, understand like what the scoreboard looks today, and then think about how you can make adjustments in how you operate. Do you need to get more strategic in how you are optimizing your routes? Do you need to, you know, find a subcontractor or drop a route that is way out of the way that's, you know, you're spending a lot of time and you've got work to do, but you're spending all your time in a truck because you gotta go way out to, to get to another job. Think creatively about those opportunities. Maybe the option is like you haven't sold enough work and It's not because your prices are too low. Maybe you need to raise your prices and you need to do less jobs, but they're more profitable jobs. I encourage you to take a deep look into how you're actually performing. Get down to the ticket, the types of work you do. Understand where you're actually winning and losing, and then figure out how to go do more of what you're winning at, and I mean what you're really good at, and less of the stuff that's challenging. I know one of the things that's really common, if If you're not at the revenue levels that you'd like to be, we tend to cast a wider net and we start getting into types of work that maybe we're not as skilled at, which is great, right? We're selling work and we're really excited until we actually have to go execute that. And then we find out we don't have nearly enough experience and we're not as dialed in as we should be. So be cautious about expanding yourself too far. Understand where you're really good, where you have opportunities. And as John would say, like, take a look at your people and understand what they do. Really well and lean into making them successful.

On the flip side though, Travis, and I hate to be like too contrary to what you're saying, but Timberline showed that last week. They went into some uncomfortable areas. They listened to their customer. They wanted something kind of out of bounds for what a landscaper would provide. When they failed, they walked away, but they also discovered like, wow, here's a new service that we could get into. Now they're building trails across Colorado. Super cool. Never really thought about it, but there was a need. They answered that need and figured out that this would become a new division, and it's attractive to a lot of different audiences out there. So don't hesitate to get out there on sweet branches and roll the dice. Just know when to fold the dice up, walk away.

Yeah, I don't think that was contrary at all, John. The difference is they saw a need and they filled a need. Right? I would encourage, uh, landscape contractors not to go do something because you see some other contractor doing it. Like maybe that's not your thing. But if your clients are telling you that there's a need, that's a very different story. Because where there's need, there's value in you solving that problem for them. And if you can turn that into positive dollars for your business, you absolutely should.

Well said. Well said. All right. So if you are with Aspire and an audit mid-season feels daunting. What can they do?

So advisory services is what I do at Aspire, and I would love to have a conversation with you. If you're unsure what that looks like, reach out to your CSM, get connected to me directly, but I would be happy to talk through what that looks like. Maybe it's just a conversation. Maybe you want to dig in and we do an audit together. We can certainly do that, but you have a lot of data about your business in your software. And understanding what that data means and how to apply it can really revolutionize your business.

Before we leave, do you have any last thoughts we want to share with our audience today?

We can give you great data, but so much of it is based on the behavior of the different people within the company. I think that's where someone like Travis is going to be a big advocate to help shift the behavior. To get the results you're looking for. And some of it's very simple. It's day-to-day things to not bottleneck payroll, not bottleneck paying vendors. It's not bottlenecking like, where are we on this project job costing?

So here's the message. I have all kinds of pressures from the outside, whether it's cost or labor or people wanting to spend money or not wanting to spend money. Lots of things we can't control. What we can control in all of it is how we respond to it. And I think it's doubly important as leaders in your business to keep your cool, do the work to understand where you're at, but lead your team to where you want to go. And don't like react to every news cycle. That's not going to help anything except for your doctor, because he's, he's helping you out. But be steady in the storm, chart a course based off of the data that you see about where you want to go to. And then work really hard to go get those things.

Amazing.

Travis, John, thank you both for joining us today. And thank you everyone who joined us today.

Thanks, Amanda.

Thanks, Amanda.