Coaching Call: How to Make Your Landscape Company More Profitable! (Max from Grandiflora)

Like when I look at a P and L, it hides the business model. Right. A lot of times I can see the mistakes. I can see where there's errors, see whether they're way over on labor, whatever it is. But what it hides is the business model. Right. And that is really the fundamental thing that you got to change. That's a simplification like we talked about today. Like, if you do that, your. Your P and L will look so incredibly different next year because you're not going to even have a mowing division. Right. All of those resources will now be focused on trying to sell more packages of recurring maintenance to people that have really expensive gardens. Right. And so those inherent efficiencies of changing a business model supersede any other efficiency you can make in terms of finances because it just fundamentally changes everything in the business. The type of trucks you need, the $7,000, you know, zero turn, don't need that anymore. Different types of trucks. You don't need things to be hauling around trailers anymore. Like, just. Just totally changes everything.

For everybody.

Yep. In the bottom left hand corner. There you go.

There we go.

Nice.

Okay, cool.

I'm really sorry about being late. I apologize. I have these back to back and someone went over.

I can imagine. No problem. I imagine.

Cool. Well, thank you. You're probably in the deluge of rain as well, like we are.

We were last week, actually. It's cloudy out, but with the patch of blue and.

Clear, but cold for the next three days and then rain for another week.

Oh, yeah, there you go. Yeah, we were pouring this morning, but somewhat similar climates as you.

Pacific Northwestern. Yeah, I think you've got it a little. A little bit worse than Portland just. Just by a few days, from what I've heard of Rand per year.

Yeah, just a few. So cool. So I got your form, read through that. But yeah, kind of. Tell me a little bit where you're at terms of when you started the business. And I know you said between 100 and 500,000 revenue, but kind of just going to give me a little context, it'd be great.

Yeah, for sure. First, I just want to say thanks a lot for doing this. I'm really excited because I've been following you literally for years on YouTube. I think probably since you first started the channel, I think it was. Was the podcast first and then YouTube.

Yep, yep.

Yeah. So I started. I was reading the podcast or I listened to the podcast for a long time. And then when you transition to YouTube, I started watching all those. So, I mean, I pretty Much Watch all the videos as they come out. Pretty cool. So it's cool to be able to talk to you.

So what we're at basically right now is 320,000 for this year and 330,000 for last year.

This year has been crazy for so many reasons. Between Covid just decimating our spring, mostly because I didn't hire up until May. I had one crew member until May this year and normally by March, April I would have had four. So a relatively small company.

This year has been crazy divorce as well. So this, I mean, it's just been an emotional roller coaster.

And really feeling like I wasn't able to focus on the business as much as I could.

And so for 2021, I'm really just wanting to re invent the business that, you know, that marriage was definitely incredibly challenging. And in hindsight, you know, we've been together since I was 20, so 13 years. And.

We just didn't know each other well enough and know ourselves well enough when we got married. And we just drifted apart big time to where, I mean, our personalities were just not. I mean, it was just not working. So this year was largely consumed with like having to make that decision and after trying to keep things together for five years. So the reason this is important is I literally feel like for the last five years all of my emotional and mental energy has been consumed in trying to make the marriage work. And the business was really just suffering and my personal finances suffered a lot.

So 2021 is going to be the first year really in my adult.

Life where I feel like I could put the type of.

The type of energy and drive into the business that I've always wanted to. So that's the goal for next year.

I did. So I'm a member of the landscape business course. And I watched over the last three days, I just crammed pretty much all of the Landscape Summit 2019. And then I have implemented P4P in a rudimentary way. Two months ago, I'm realizing now I should have. I should have finished watching the course. I should have watched all the videos before I did that.

Because there are definitely some things in there that would have been good to know. One of them is.

How to calculate your labor. Like that formula for calculating the labor revenue versus, let's see, what was it? Labor revenue versus labor cost. So how much? If you take all everything else away, how much you've actually got, it's like 56% for this year. And last year it wasn't as much, but for this year it's high.

And.

So that's something that'll have to change to make P4P sustainable. And I know efficiency will be a huge part of that. I know that you really, really push efficiency. And that's something that this year I'm really focused on. I am completely taken out of the field because of this.

So I crushed. Yeah, it's gonna be five months before I'm back to what they say is a new normal. I crushed three fingers. I was changing the brakes on one of our work trucks, and the jack failed. And as I was reaching in to put the safety jack in the secondary safety j. For just a split second, I moved my hands under the brake rotor. And at that very second of Me, like, literally would have only gone under, like, this fast. But at that very second, the brake rotor failed and crushed my three fingers. £3,000, thankfully. Gravel. Yeah, it was on gravel. And I'm just. I mean, I'm just counting myself as incredibly blessed. Like, I don't know why this happened, but I will just consider it a blessing that my joints were spared. So literally, I'm not even kidding. My. If it was forward just a quarter of an inch, my second joint or the last joint would have been destroyed on these three fingers. If it was back or chopped them off if it was on concrete. But if it was back a half inch, then the second joint would have been destroyed. So it was right. I mean, it was right in between those joints. So if this kind of thing was going to happen, this is like the ideal way.

Least you're looking at a good way, I guess.

I try. Yeah. I'm really working it. Yeah, I've kept a pretty good attitude, but I'll never be able to make a full fist like that again. But at least I should be able to kind of go like this. They said.

Yeah, yeah.

So there'll be some stiffness. I'll have full weight bearing and everything. But this is the first time where I'm truly. I'm out of the field. Like, this is what you've been saying for years about, like, the reason for creating systems in your business. And I remember hearing this like three or four years ago or something like that where you were talking about, you know, what if something happens to you or. Actually, I bought your book to the.

Zero turn. Yeah, zero turn, too. And that, you know, injury is in that book as well. So this really drives that home. Where I've got five. I basically have six months where I can't work in the field in the wintertime. We're used to me being out in the field with everybody doing specialty services like irrigation. An arborist too. So tree climbing is traditionally a big part of our winter. That's done.

I mean, I can't even. I can't hold anything right now. So thankfully I've got two great crew leaders who are holding everything together beautifully.

And this will be the first winter too, where I'm trying to keep more than one or two people on. So I've got four people out in the field this winter. And so far we're doing okay because we still have some really big landscape projects. So that's. I mean, I could say a lot more, but that's kind of the gist of the background.

Perfect.

This year's been crazy between Covid divorce.

And this and broken fingers and the fact that you're in Portland and Covid. So my goodness, it's been fun. Hey, I guess 2021 can only get better.

Yeah, I agree.

Cool.

Cool.

So do you have some specific questions you want to jump into? Yeah.

So the doozy is.

I have always.

Your model is very much based around systematizing and this was driven home in the course big time. That systematizing and implementing systems so that you don't have to be present. The way that I have done the business so far has been almost the exact opposite in a lot of ways. Not necessarily on purpose, but just because of the nature of my interests in the work. I'm a highly plant oriented person. Like, I'm a horticulturist at heart.

My main interest is in the design installation.

Of really high end, gorgeous landscapes. I don't know if you've been to our website, but you can kind of see some of our projects. Yep.

It's not. It's not something that's easily systematized and it does need people that have a pretty decent amount of skill to be the crew leaders. It wouldn't really work to have the flat hierarchy that you do at Augusta because we really rely on the crew leaders that have a lot of knowledge. But it's made me realize that I'm really tied to the business.

And I can't continue to work out in the field if I want to make the income goals that I do. Like actually being able, like if always been my dream to invest in real estate similar to like what you're doing now. It's what I'd hoped to do over the last decade, but my ex wife and I could never get on the same page about finances. I'm a spender She's a very much or I'm a saver. She's very much a spender. And the financial stress of just completely disagreeing about finances, I basically, in order to cover the expenses that she felt that we needed, needed to pull every cent out of the business. So I was never able to, like, my advertising budget has been next to nothing for years. So this will be the first year where I'm actually spending more than like two grand on advertising.

And I'm just realizing I'm. I feel like I'm stuck in a rock between a rock and a hard place. Because I've built a business where it requires these specialty. You know, it's a specialty service kind of business where.

I can implement a lot of systems and we can get a lot of efficiency, but it's not going to be like Augusta, where we can have somebody come in and be trained up and profitable within a week or two.

And I've kind of been wondering if I made the right choice. Because if what I really want is financial independence and security and to not constantly be tied to the business working 60, 70 hours, weeks, I don't mind doing that. But I would like to not absolutely have to as well. I haven't taken a vacation in years.

So this year it's all about recalibration for me. And I was just wondering if, I mean, I know that this is not your specialty, but I'm just wondering if you have any thoughts as to.

How to go or resources as far as how to go about a company like mine where we do like high end, like what we've been trying to get into is high end landscape design and installation. I mean, we do stuff like. I don't know if you can see it. I printed out and laminated a bunch of these after because we're making these binders now for systematizing materials. I figure we can do high end work, but at least let's system, you know, let's put systems in place for that high end work so people can make quick decisions. You can kind of see like this patio. Like these are the kind of patios we do that are just, you know, more intricate.

Yep.

Than a typical patio. And we use higher end materials, stuff you can't ever find at a big box store.

Yep.

And the thing, it's a culture thing too, because my crew, that's what they love about the company. They want to work for a company that's doing this kind of thing, higher end work. So it would like for me to go into something that's more easily systematized or, or streamlined. It would be a total about face of the business.

Yeah.

So I don't know if you have any thoughts on that, but yeah, so.

Like, you know, there's, you know, really like two or three things I think about. First off, you know, the realization too is like, hey, if I'm not gonna be in the field and not doing what I love to do, which is like the landscaping and the design side of things, it's like, do I just want to run a systems oriented only business? Like just do more recurring services? Do I want to. And that's a decision you can make. But then the next phase, like, okay, kind of what you've already started doing that is more trying to standardize what you do inside of those large projects. Right. So for example, like, you could literally go down to like, we only do two different types of pavers. We only need two different types of wall blocks. Like really trying to standardize that way.

And, or, or you do neither of those things and you just jack your prices up to the point where, where it makes sense. And you don't have to get 50 guys on the field or even 10. You could stick with three or four guys in the field, but because you're charging 30% more now, it becomes economically viable.

That was the other question. Thank you. Because I actually written that down here. That was the other question is basically I've realized, like, I'm charging the same rates as Augusta and yet what we.

Do, I need, I need highly experienced, like really conscientious horticulturalists to work because we do like the kind of. We do plant designs where sometimes there's like 30 species. On our website, that video that plays in the background, that was a 1500 plant installation of like a meadow.

Yeah, I'm looking at it right now.

Yeah. And so it's. Those are the kind of projects we're increasingly going into. And that's what the crew is passionate about. So I'm realizing that I am going to start having to charge a kind of premium. Like my, my average hourly is going to have to go to be like 100 or 120 or something and just sell based on the artistry of it.

Yeah. Like you either you either got to go really specialized and charge a premium or you go general and you do volume. Right. And you know, especially like the bottom line is don't do it because you're crew, like you got to build the business around what you want. Right. And so, but if you're passionate about that same thing I think you can definitely do it. You've got to charge for it though. And a hundred dollars is what you need to be charging if you need horticulturalists or arborists to be on your crew, where you have to be licensed to do a lot of the stuff that you're doing. Like, you should not be charging what a landscaping company does. Right. And I would stress that big time on your website in terms of like that you're a horticulturalist and you know, even if you say high end, like design, build, firm, right. And you're not focused on landscaping, you're really focused on high end sustainable horticultural design projects. Like that's a totally different market. Right. And you know, then you can charge, you know, a premium for that or, or you stay where you're at, but then you really need to systematize things to where you don't have to be there.

Yep. Yeah. And I realized that I used to put fine landscaping on our website, but I took that offer just for SEO purposes because I was wondering like, huh, I wonder how that's gonna.

And some people think when you put fine that you're, you only do small stuff. I've had, I've seen that a few times when you do like woody fine work, it's like, okay, do you do like weeding and you know, trimming bushes? Only where you know, I've heard, I've seen that too. But really if you're doing holder cultural and you're really focusing on like agronomy, like those sort of using that terminology and pitching yourself as a completely separate than landscaping, because anyone can be landscaping, you just got to pull weeds, rake a bed out, plant a bush. Like, but if you're really focused on the horticultural and like the plants and irrigating those plants and like really in depth stuff, you got to like make sure that is the presentation and not like a landscaping company.

Now that makes sense. And I guess and the website used to show that more, but I've streamlined it more just because I've been trying to get more of the recurring revenue. But I think we should have, we should show on the website that we do those recurring services because I do, I want to get two or three crews where it's just mowing, even just for recession proofing. I mean, I went through 2008. I was young, but I went through 2008. I remember what happened. And the install jobs just took a total dive. But the mowing and stuff kept going.

So yeah, that makes sense. And I guess, yeah, it's a judgment call. It's what I'm passionate about. I'm passionate about the horticultural work and.

All the artistry surrounding that. It's just that I also can't be the one who's always doing it. Which is fine because it's actually, it's been easier for me to find people that are interested in the high end work than it is to find people just do general, general labor.

So yeah, even if you really position it like hey, we do, you know, grand of flora, mowing and horticulture. Right. Like if I'm looking, if I'm a high end client looking for a company to install my, my design, like I'm gonna, I'm expecting to pay someone more literally if I'm hiring a horticulturalist versus a landscaper. Right. And so if you really pitch yourself as like, hey, we do mowing or we do maintenance and then we do horticulture and really pitching a horticulture, we're gonna be expensive. You're looking at, you're gonna probably charge for consultations and using that sort of as the model. And especially if you're passionate about it. I would charge for those consultations because that's taking your time, but it kind of is an outlet for you. Yep, perfect. And so you're only gonna get those really high end, you know, they won't, they're willing to pay a lot those type of clients. And I would keep moving up that consult fee to weed out the people you don't want.

I just started doing that where we were at like 80 an hour for, for landscape design. And then I realized that's how much we charge for mowing. Like we. So now it's 150 for landscape design and consultation and people don't bat an eyelash. That's the crazy thing I think about all the lost revenue and I mean the years of study of all these things. We are a licensed landscape contracting company and irrigation and low voltage lighting, so we. Irrigation is, I'm actually passionate about irrigation. It really interests me. But again I'm the only one that knows how to do it in depth. So. And yet these higher end clients expect that we'll be able to do irrigation. So it's like it's a double edged sword. I've thought about, let's, hey, let's just get rid of it. But companies around here, the really good ones are charging 135 to 150 an hour for irrigation. So I mean at that point on P4P, I can afford to pay somebody like 40 or $50 an hour. To do irrigation, and then it becomes super worth it for someone to learn it. So I feel like we're probably gonna have to keep irrigation and other things just to be able to serve the client base that we are trying to increase.

And this is that slippery slope. Why eventually we just cut it off, right? Because we were doing the same thing. Okay, well, if we're gonna do, you know, $70,000 paver patios, we now we're getting a lot of people asking for walls. And if we're doing walls and we get people asking for turf and then we got. So that's where it becomes just like this slippery slope. Now it's like, how do you get four people if you're going to hire four people to know all this stuff, right? Because, like, just having four people to know all of those different categories, well, is either A, you're going to pay them $40 an hour, or B, you're never going to be able to find them, right? Because they're going to go start their own thing. If they know all of those things, they're probably going to go start their own business. Right? And especially when it's more of a consult type of business, that specialty, and they see you getting $150 for a consult fee, why not just go do it their own? If they know.