Growing a $1M Landscape Business in Four Years! | RoundUP ep24

Hey, everyone, it's Mike Andes, and you're listening to the landscape business course. Today is another episode of the Roundup podcast where we're going to interview another landscape and lawn care professional. And I hope it's something that you can gain tips, advice, and tricks to grow your business. Here we go.

Let's go.

Jesse and Paulo, welcome, guys. Thanks for coming on.

Hey, Mike, thanks for having us. Really appreciate it.

Thanks for having us, Mike.

My pleasure, My pleasure. So first off, tell me a little bit about how you guys got started and more importantly, how both of you decided to go into business together.

Yeah, absolutely.

Yeah, absolutely. So I actually was working in car sales and, you know, I had done, you know, landscaping and masonry work with my dad actually, you know, my whole life. So one day, you know, I just decided that I, you know, I was. I thought I was cut out to, you know, run my own business. So we actually decided to open up a cleaning business at first, and we were doing office cleaning, and that was during the winter time. And then when the springtime came around, we started getting a lot of calls from family and friends asking, you know, about landscaping because we actually, you know, had a truck. So we took advantage of that and just.

Figured out that we could do a lot of, you know, landscaping work because a lot of our friends as well also also had the landscaping experience. And we've been very lucky to have them be part of our crew and grow with us. And that's pretty much how we got started.

So over the past three years, you guys have grown up to 600,000. Walk me through each of those years and kind of, you know, what were the benchmarks in terms of revenue and employees along the way?

Yeah, absolutely.

So rough numbers. The first year, we did about 65k in revenue. It was myself, Paulo, and then his cousin and our good friend Joe, who's one of our crew leaders right now.

A lot of part time work and.

Yeah, exactly. We kind of just filled them in. We need them. When we got the bigger mulch jobs, we remember we had a couple 10, 15 yard mulch jobs, like, all right, guys, we need your help. And that first year as well, we. We did have some maintenance accounts as far as mowing. And I remember that year we had to bring in Joe and his zero turn mower, and he actually would help us. We'd pick him up with our trailer and our truck and we'd subcontract them for the day. It was a cool tire that year. And you want to talk about year two?

Yeah, yeah. So as far as year two, we actually ended up getting our first.

First.

You know, bigger truck, which was a F350. 2010. F350. It's a great truck. And within the first month, the engine.

Actually blew up on us.

So we had a, you know, a big decision to make, you know, which at the time, you know, the, the little bit of money that we had saved up, we actually had to go and buy a new engine for that, that truck. So that's diesel.

Was it a diesel?

No, it's a gas.

Yeah.

Okay.

So that, that was, it was kind of a pain 8 but it did have an easy dump in it. And we were, you know, with such a fresh truck that once we got the new engine in it, we decided that, you know, we were just going to make our money back and, you know, we weren't going to let us let it hold us back, you know, through the process of growing a business and, you know, through a lot of hard work, the, you know, the guys stuck with us. We actually, you know, having good insurance is very important because once that happened, our insurance company was able to, you know, get us, get us a truck rental. We, we had a, the, the dump truck that we have now. We had the same model as a rental, which, you know, was kind of a good test drive. And we made the decision to get, get the dump truck that we got this year, which is a actual, you know, gas F350 dump, which has been a huge help for us. But as far as the year two, you know, that was a big setback for us, like I said. And going forward from that, we just had it. We had a lot of growth with, with our clients, you know, just from word of mouth and a lot of Facebook advertising as well. Just, just really help us get through year two.

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Cool. So in year two, what was the revenue? And then obviously this is probably year.

Three, but yes, it is. It was just around 350,000.

Cool. And this year you almost doubled.

Yeah, we actually went on QuickBooks today. We just got over 600,000 and four weeks of fall cleanups. Thank you so much. We appreciate it.

Thank you.

Cool. So talk to me a little bit about the masonry side. Obviously, A lot of times we talk about lawn care. That's obviously a very highly skilled side of the business. Do you use Joe or people that have been around you for a little bit longer to kind of manage it and then have lower skilled employees basically be the labor? Like, how do you kind of break that down so it's actually profitable and something that you don't have to be there all the time for.

So the way we broken that down is my dad actually has been doing masonry for over, you know, 25 years. And he's. He's just a very creative guy, very experienced guy. And he was able, you know, my whole life working with him, I was always able to pick up on things. So it just came very naturally to me. And in the beginning, we had him working with us a lot and he was able to, you know, help us with the maintenance, with. With the hardscape side of things a lot. You know, we, we got a lot of patio jobs thanks to, you know, his expertise and going with us and being able to teach me the process of estimating the job. And since then, you know, he's. He's gone on to retiring and Joe actually has been very, very helpful with the hardscape side of things.

We're currently working on the 2000 square foot patio that's going around a pool deck. And that's an amazing job. We've been able to learn a lot and Joe has also been able to contribute a lot too. So that's the way that we keep it working smoothly. And when we do need extra help, we bring in some of the less skilled guys.

Like you said, when it comes to.

Those bigger projects, what have you found to be a good way to. What is sort of your delineation of what jobs you will accept versus the ones like, hey, that's just not going to do the best for us. Obviously you all have a very skilled labor force. You all can do a lot of those type of jobs. But is there something that's like, hey, we will do this, but like, there's a certain point where we're not going to be the best fit or we're not going to make any money on this job?

Actually, the project we're on right now, it's one of the bigger projects that we've done. We've definitely learned a lot. And it's actually kind of funny that where you want to talk about the Stone division, because we're in a very serious debate about going fully into maintenance and fertilizer and fertilizing and simplifying the business and systematizing it and trying to dumb it down and make it easier to train guys. And we're, we're thinking about completely getting out of the field, to be honest with you.

Obviously, I would imagine the cons of keeping the stone division is the scalability side and being able to create systems around lower level labors. And then I would imagine the pros like, hey, it's a big chunk of our revenue right now. What for? What other kind of decisions and pros and cons are you all debating and thinking about when it comes to that decision?

We're thinking about how to grow the company in a way that we can keep our employees happy and maintain like the absolute best communication with our customers. And that's something that we've learned a lot, is we need to step out of the field and focus more on the customer satisfaction side of things. Because right now that's the. In, in my opinion, I think that's where we lack the most. Because you're in the field 8, 10, 12 hours a day and then you go home and you have to do phone calls and it's not, it's just not feasible when you want to have that good customer satisfaction to make sure everyone's happy.

And so you feel like the smaller projects are a little bit more accommodating to that type of a. You getting out of the field then.

For the most part, yeah. And I think that it's just going to be a little bit easier to bring new employees in, train guys, and it's a little more predictable. And I feel not only that it's more predictable, but it's easier to manage and you can make sure that your employees are learning and developing and hopefully they can kind of see the bigger.

Picture for sure with the two of you kind of obviously having to make that decision together. Has that been a challenge at times, just as co founders to kind of wheel and deal or hash out, you know, who's right, who's wrong, what, what decisions are going to be made, especially as it comes to something as, you know, as pivotal as what you're talking about now in terms of cutting out a big piece of the business. How do you go about kind of figuring out who makes that decision? Or is it just a matter like, hey, we just keep fighting it out until we both agree? Like, how, how do you guys kind of come to that, that, that understanding.

Would you say? I'd say we. So we both, you know, agree and.

I think that we definitely butt heads a lot, but especially over the past few years we've kind of learned to listen to each other and just really like, I feel like it doesn't matter what it is in life, like you really need to understand the other person's point of view to make a proper decision for yourself. Because if you're not going to understand them and understand what they're thinking, how can you say that they're wrong?

Yeah, and we tend to always look at everything as a learning opportunity as well. And you know, if we are kind of disagreeing on something, we see that as, you know, a good thing. Because if we did agree on everything, then we probably wouldn't get anywhere. So we usually bounce ideas off each other when we start to disagree. So, you know, eventually we get to the same point and that's pretty much how we, how we like to do it.

Have you all kind of delineated who does what in the business and if so, kind of what does that look like on a day to day basis in terms of your roles and responsibilities individually?

Definitely. So a couple days a week I'll go and get in the office and I'll take care of some paperwork. He'll same thing a couple days a week for him. And then when I'm in the field, I'm with the maintenance crews and when he's in the field, he's running all the stonework and it's, it's been good that way because we're not stepping on each other's toes, so to speak. He gets to do his projects and run his crews the way that he wants them to be ran and I kind of get to do the same thing. And as long as we're on the same page at the beginning of the day with our crews, it, it's been great.

Yeah, I kind of, I kind of just, you know, let him do his own thing. He lets me do my own thing and you know, with it, with respect to what each other, you know, wants as a result. You know, at the end of the day we just try to not overcomplicate, you know, that aspect of the business. At the end of the day, you know, we, we're business partners and you know, we're friends. So you know, we try to keep things simple and we have a lot to, to gain together.

So you know, looking forward to 2022, I know your guys goal is, you know, doing over a million revenue. If you did cut out the Mason side and you, you know, your goal is obviously to add fertilization, I imagine replace that income. What are the Steps you're taking now to kind of make sure that you can set up for that type of growth and is, is a part of it going to be at the administrative side because that is where you currently feel your lack.

Yeah. So to set up the fertilizer, fertilizer division, all of our crew leads, we're giving them the opportunity to get the licensing this winter. We're going to pay for everything. And we're really encouraging all of our guys to get as much education as they can. For example, the hoisting license, anything that the guys want to do to further themselves, that's what we've been trying to do. But to get back on track, that's like kind of the main thing is really to implement that and show the guys that there's more opportunity and there's more for them to learn. And with more expertise, you guys can make more money and hopefully see the value in what you're learning and bring value to our customers and our properties.

And we've also been using service autopilot as well and that's been a huge help. So this year was the first year that we used it. And obviously, you know, since we've been, you know, so busy in a field and then, you know, going to the.

Office.

Not as often as I would like to be there.

This winter, we're looking to, you know, master it as much as possible and get into 2022 with the full, you know, intention of, you know, pleasing our clients and making sure that everybody's satisfied.

I have two questions, kind of asset based thing that you've mentioned. One, the first one is the gasoline dump trucks. I know some people would swear by saying that you have to have diesel. Why did you choose gasoline? And obviously you said they've been great, but what would your experience been with them?

In my opinion, the reason we went with gas over diesel is just the lower expense. If we were to go buy the same truck and diesel probably been another 10 to $15,000 and we just didn't have that option.

So.

And we're not really pulling any crazy heavy equipment. I mean we rent a skid steer maybe two or three times a month at the most. It's maybe once a week at the most or pulling something heavy. So I just. We don't really see the need for it yet. But as the business expands and we do hopefully buy all that bigger equipment, we'll definitely need the diesel trucks.

And in terms of, in terms of the shop, when did you kind of make this and you needed a shop and Then based, like, from a cost perspective, what was that decision?

Like, tell them about.

About how we. Yeah, so how we got our yard. It was actually pretty cool. So Joe, our crew lead that we mentioned earlier, he's worked for a few different companies in the area, and there's a yard where we get all of our mulch and dump all our debris. And we became pretty friendly with him in our first year. And we just asked him very casually one day, and he goes, oh, I'll clear out a lot for you guys. And he cleared out a lot for us. And we have our yard literally right next to where we pick up all of our material and dump our debris. So we couldn't ask for a better spot.

You know, to me, at the beginning, was that just kind of a tough pillow swell from a financial standpoint, or was it a matter of, like, hey, like, we need this to grow and, like, we just got to bite the bullet.

We went everywhere pretty much, right. We even went to the dpw and.

Yeah, so our first year, when we had a couple smaller jobs, we were dumping at the town dpw, trying to cut costs and do what we could do.

It wasn't necessarily about cutting costs. It was more because, you know, we. We didn't. We only had about, like, four jobs a month, you know, that people would call us for. And they were all like, hand over, you know, our town clients, which we. We had all of our equipment in Jesse's father's garage. So we were just doing, you know, work for the neighbors and everything. So we just brought it to the local, you know, town dump. And that helped us save some money. But, you know, in the long run, we figured that, you know, that that wasn't gonna work out, especially as we were getting busier in other towns. Obviously you can't do that. So we had to drive all over the place to dump pretty much. And then, like Jesse said, once we. Once we met this gentleman that was able to get us a space to park everything and let us dump and everything, it definitely reduced the cost of driving around.

And he gave us a very, very fair price. And leading our kind of in the same. Same hand as we actually got our office this year kind of on the same note. And that's been really, really good for us. Paulo had all his documents and paperwork at his house. We were always carrying stuff around. Now we all have everything at one location. We have all of our stuff here. It's a great place for us to come and get away and focus on our work. Monday mornings we have Our crew leads, meet us here before we have some coffee. Go over the week. And it's just been a really good place for us to brainstorm. Excuse me, brainstorm. And really try and stay on top of things.

In terms of the masonry, we got.

The yard at the beginning of last year.

Okay, cool, cool. In terms of masonry side of things, the training, the employees, what kind of systems have you used to get them up to speed in terms of masonry? Because it's extremely difficult in terms of skill level and finding those employees. But once you did on board them, did you have a process, or was it more or less like, hey, hop on a job site, I'm going to show you what to do, or is there ways to kind of simplify those hardscaping and more technical training for your employees?

So I actually did some ICPI training, which is, you know, Interlock Concrete Paver Institute. And with that, that helped me learn a lot more of the technical side of things, not just what my father had taught me. And I forgot to mention, too, that my cousin was also involved with us at the beginning of the business, and he had some experience from also working with my father. So him and I were able to tackle that a lot. And.

As far. And as far as the training for the guys, they haven't received much training. So I always make sure that I'm on the jobs and I'm leading the hardscape projects. And the guys are just very good at listening. They perform the task very, you know, professionally and exactly how I instruct them to. So I trust them 100% to get it done. And I'm also supervising as well. So there's never really much mistakes, but they learn quickly, and that's been very important as well. And like Jesse said, we're trying to train them this winter. And, you know, the ICPI certifications is something that's also on the table for.

Them in terms of kind of the dynamic with both of you being both young business owners. Has it been challenging this year or even last year finding employees? And have you found being young has been either a handicap are positive? And have you found, hey, we're just going to hire people in our same age demographic? Because, like, I know when I was like 17, 18, 19, sometimes I had struggle retaining employees that were in their 40s or et cetera, just because of the kind of social norms have you found that to be? So in this year, have you kind of focused more on your age demographic?

Yeah, so we're kind of still on the stage where we're not really hiring people we don't know at the moment. Pretty much everyone that works for us is friends and family.

Joe's been friends with Paulo forever. A few of our other guys are family friends of mine. And we're not quite ready to be reaching out to the public, so to speak. But we are reaching out to our local vocational school. They just started a landscape design program there. So we're gonna see if we can maybe get some works. My co op type deal going for next season. So that's, that's probably going to be our new hires for next year, which.

Is the same school that I had gone to. So, you know, I do know some people there and I, I do trust their program and everything. Which is the hardest part is I guess it wouldn't even be to, you know, hire employees or find employees. It's just to who can you trust to actually get the job done the way that you want them to? Come in with a positive attitude every day and you know, just be there ready to, you know, get to work and you know, make somebody's property look as best as it can.

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I know you guys mentioned about next year, you know, adding fertilizer and that being part of trying to create more of a systems based business and less technical on those big projects. But what are you, what are you kind of doing in terms of that? Are you focusing on kind of like five or seven step programs that you're going to be selling? Have you already kind of dabbled with some treatments? And this is like, you already know there's a market and is it a matter of like, hey, we got so many mowing customers, we can just, we are know we're have a big market for fertilizer. What kind of brought you to fertilization as, as kind of the replacement for the masonry potentially next year.

So I started to notice that a lot of the lawns that, you know, we, we were, you know, cutting and everything were pretty bad. And I noticed that they were also getting fertilizer treatment by, you know, bigger companies. I won't say any names, but they, and then I noticed that the quality of the work that those companies are doing are not as good as it definitely could be. And we think that we can provide a better service. And then obviously, after, you know, calculating, you know, our yearly. Our projected yearly revenue, we were able to, you know, determine that that may be a good replacement for masonry. And it's something that we can get in and out a lot quicker and that, you know, we could probably charge less than the bigger guys and get a better job done. You know, we. We're here to. To, you know, take care of these. These clients and. And we're not going anywhere. You know, these are people that we might see at the grocery store. So, you know, I don't want to. I don't want to do anybody wrong.

So.

We want to take it over, you know, is what I'm saying.

So. Big thing that stands out to me for fertilizer Is that it's a fairly easy. I don't say easy. Nothing's easy. But it seems like a fairly simple way to increase your revenue with low overhead. For example, to increase the masonry or stonework division, we're talking about the big diesel trucks. We're talking about excavators, skid steers, Expensive rentals, A lot of overhead compared to.

A few cast spreaders. And if you can get your material on a net 90 or something like that and pay as you go, as you get, as you receive your payments from your customers, I feel like there could be a lot less headaches, and I feel like it could be taught a lot easier to our new employees Compared to the stonework.

Obviously, last year, you guys almost doubled to this 20, 21 in revenue, and your plan for next year Is basically going to require the same amount of growth in terms of doubling almost from a cash standpoint, or have you all just been investing 100% of the money back into the business? And have you guys come to the agreement internally between the two of you, like, hey, this is when we're going to start taking profits or taking a salary or, like, just starting to think more as owners and as employees. And, hey, we got to get to this certain point in size, and we're just going to keep all the money in the business. Have you had that discussion? And when was that kind of corner turned? Obviously, in year two with the truck. That $10,000 expense was a big blow. Getting past that now, though, what have you done to kind of make sure that, hey, we're safe from a cash standpoint, but we're also trying to grow extremely fast, and that requires a lot of.

So it's kind of tricky right now. We're kind of at a point in our lives where we're starting to move on with our lives as young men. And we got to figure out, all right, we need to make some money, but we also need to grow this business, and we can take a haircut on what we're going to get paid and dump more money into the business and try and recoup that as we grow. But it's kind of been. It's been a little difficult to really determine what the right. The right way to grow the business, as well as pay ourselves and make sure that all our expenses are being covered as well. We have very little debt, which is amazing. It's great. It's a burden off of our shoulders. I know you see a lot of guys that they'll buy, buy, buy, and then slow season comes around. Like right now, winter's almost here. We can't guarantee anything with the snow. So it's just being frugal, buying the right equipment when we need it to get the jobs done, and just trying to save as much working capital as we possibly can and just keep the debt down and just try and pay ourselves enough to live until we're at a comfortable point in the business.

And was that kind of a predetermined place for the two of you to kind of like, hey, we got to get to a certain point. Kind of sometimes that. That can be a. A little bit hard for owners. Like, hey, one, hey, I want to grow this to a million dollars, and then I want to kind of extract profits and stop growing. And then someone was like, I want to grow it to 10 million. Right? Was that a conversation you all have had, and you kind of have a pretty clear understanding between the two of you of what that is going to look like?

It was a pretty. Pretty clear understanding.

I think we both are in a mutual agreement that we want to grow the company to a fairly, fairly decent size, but we also want it to be. To function the right way and the quality of the work to stay where it is. Because, you know, I mean, I feel like the bigger you get and the harder it is to control certain aspects of your business, the quality starts to go out the window. And that's something that we're pretty scared of, especially when you start hiring new people and stuff like that, because kind of like Paulo said earlier, he's the one who's on the job site supervising. I'm the one who's leading the maintenance crews. And once we start to step away, you're really putting a lot of trust in other people.

After year two, when you had the truck go down and you kind of had a big cash intensive, you know, requirement. Did it kind of change your mentality around working capital and kind of how much you needed? Is there a certain formula you guys try to like keep a certain amount of money in the bank account based upon percentage of expenses or something like that, just so those type of expenses are not going to, you know, put the business out of business?

Yeah. So I mean, we don't have a specific number, but the number that comes to mind is probably 10 to 15 times your monthly overhead in your savings. It's kind of like a decent nest egg that we're, we're at about right now.

Very cool. And if you guys were to kind of do this all over again, obviously it's been three years. Going in your fourth, you're probably doing a million revenue, very, very sizable amount of growth. What would you, what would you say is probably the one thing that you would either must do that you did or that you messed up massively on and you wish you would have been able to know prior to getting started?

I think the first thing that came to mind for me was using the right CRMs, making sure that you're invoicing properly, make sure you're not over invoicing.

Getting your estimates out on time. So just service autopilot has been amazing. I remember last year I would go through my spreadsheets and I'd check it off and I'd send it through QuickBooks. And it kind of brings me back to like what I saw in one of your videos is what gets you from 0 to 100k is not what's going to get you from 100k to 500k. The business, it really needs to be changing constantly. And just like the little things like, just like getting so having service autopilot and making all those things so much easier so you can spend more time in the field. And that kind of brings us back to now we're at the next point where we need to get out of the field almost completely and utilize our crews and our equipment and figure out how to run this thing as best as we possibly can.

I agree.

Last kind of question I had before I let you guys go. And one thing you guys mentioned that caught my interest was the ability that you want to have to be able to give back to community outside of just the holidays. Can you explain that and kind of what do you have specific goals or kind of how is the company trying to achieve that objective?

So for example, this holiday season, next week we're Going to be going to a charitable organization called My Brother's Keeper, and you give presents out and deliver stuff out to the communities. But we're trying to figure out a way that, for example, once a month, when the MO crews are out, if we could reach out to all of our customers and say, can you leave some canned goods that we can donate to the local pantry or just something along the lines because we're in contact with so many people all the time, I feel like we could get something, something that could make a difference. And I feel like we could just reach out to our customers and utilize our customer base and our friends and family. We could really make something happen. That's very true.

Paulo, quick question for you. Kind of last one here. And that is kind of the relationship of your father kind of handing this skill set down to you and then you really taking it to the next level. How has that been with the dynamic of your father as he. Is he still working in the business? And does he. Is it a sense of pride of, like, handing things off to you, or is there a sense of like, hey, like, you know, why didn't we do this together?

So it was. It was. It was mostly because, you know, Jesse and I, being young and at first, like I said, it was a cleaning business that we wanted to do. But that skill that, you know, was. Was taught to me was, you know, kind of, I. I took it for granted, I would say, for most of my life. You know, to me, it was just a chore that I had to go do on the weekend. You know, I had to go help my dad build a natural stone wall or something, or help him finish up a patio because he was always, you know, doing some extra things on the weekends for the company that he worked for. And he would just take me along with him. And, you know, over the years, that. That kind of just.

Sat and, you know, I didn't want to do it because I went to. I went to. I went to vocational school to do automotive, and after that I worked for Nissan, and then I worked for Volkswagen, and then, you know, then I opened this business. And I did approach him at first to, you know, get the business started. But, you know, he didn't really have to know how to go into business. So, you know, Jesse and I, one day we're just talking on Snapchat, and then we decided that, you know, we should get together for some coffee and see what we can do. And then before you know it, we were, you know, doing overnights, cleaning offices, and within a Few months we had our first landscaping gig. And, you know, from there was history.

I'm just out of curious curiosity because you kind of did some. Something similar. I did. I actually. People don't know. I had Augusta Cleaning Services for a little stint there and like the second year of Augusta Lawn Care, and I decided, hey, there's not enough margin because I can only get 30, $40 an hour for clean versus 80 or 90 for landscape. Was it the same kind of conclusion for you all? Is that why you kind of moved over?

Correct, correct. And it was very hard to get people to help us at midnight.

So, you know, when you. When you gave the guys some regular hours, you know, they were more willing to help you out. So, you know, we were very lucky, too, that people trusted us to, you know, take care of their properties. And once we did a few jobs here and there, posted some pictures, I was always, you know, a big believer on. On the social media presence. So I've always been involved. Like our first logo I had created, we just recently got a new logo, which is here on Jesse's shirt. But I knew it was important to have a good presence online and that that helped us, you know, establish a reputation within our community.

Awesome.

Well, thank you all, both of you. I really appreciate you hopping on today. And just for everyone out there, how can they contact you in terms of your website?

So our website is Pear Tree property services.com and, you know, if they want to check out our Facebook as well, it's at Pear Tree Property Services MA from Massachusetts. And then it's the same thing on. On Instagram as well. But, you know, if you go to one, you can reach the other.

You guys get snow last week? I know our. One of our Massachusetts. They were kind of on snow watch last week.

No, no, unfortunately not.

We actually might be getting a little dusting tomorrow, though.

Oh, let's go. Cool. All right, guys, y' all have a good one. Take care.

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