How KORY BALLARD built a $20M+ lawn care empire!

Nobody wants to work these days, and everybody's lazy, and I can't find anyone. You can't be running around kicking gas cans and cussing and throwing tools. And somebody walks in to interview, and they're like, I'm not working here. This is chaos. We want to tell you everything about our company so that you're so excited to do business with us that the prices almost become secondary. That's what I recommend. He's like, I just can't believe you told me that. I'm like, you're not a business owner. And then I said, I hope you take that fuel. Maybe you'll make some changes now. But based on what you're doing in your business today, I think you should go work for somebody else. You. You got a job and not a company. That's what you got. There's just people that don't like our stuff or don't like me, and that's okay. I get all the. Your shirt's too tight. You're this, you're that. You're a midget.

I mean, like, I don't understand the.

Personal attack if you don't like the product. Like, if I don't like Dodge trucks, I just don't buy one. I don't go on their Facebook page.

Hey, this is Mike Andes, and the day is a very special, special episode because I'm going to be interviewing Corey Ballard. He started a company called turpicut, built it to tens of millions of dollars in revenue doing lawn care, landscaping, and snow services out in Des Moines, Iowa, and has built the thing into a behemoth, and then sold it to a massive conglomerate that has over $600 million of revenue in this industry. It's gonna be a great episode. We talk about buying and selling businesses, how to make your business more profitable, and the things that you need to be looking at to actually move the needle in terms of valuation and make your business a business, not just an expensive job. It's gonna be a fantastic interview. I really look forward to it. And what I'm really looking forward to is this coming January at Landscape Summit 2023, we're all coming aside for three days, meeting with hundreds of other landscapers that are really passionate about the type of stuff Corey and I are talking about today. Like the numbers, the business building, a real company, hiring culture. And we're gonna be coming aside and talking about that. And I'm really looking forward to him. It looks like Corey's gonna be able to make it out for a day or two. I'M really looking forward to seeing his keynote. I'm hoping he can do a live actual diagnosis of an actual company and bring them up on stage and go right through it. Might do some interview panel type Q and A there as well. So really looking forward to having Corey at Landscape Summit. Make sure you get your tickets. Go to mikeandys.com summit if you are in lawn care and landscaping and really passionate about business, not just like the next mower or like, you know, what type of string you use on your weed whacker, but like actually building a real business and building systems and having culture and having great employees and employee manual, all the things we talked about today. I really think you benefit by coming. It's gonna be a great event for you, your managers, your spouse. And I think it's just gonna be a fantastic event. You will not want to miss it. So without any further delay, let's go ahead and give you a bit of a taste of what's to come by having a next 15, 20 minutes talking with Orey. Ballard now has gone on to build another business doing multiple millions in revenue in terms of Ballard product that sells all the different supplies and tools that make a lawn care business profitable and efficient. Without any further delay, Corey Ballard from Perfect Cut. Here we go. Awesome. Well, thanks for making the time. I appreciate it, Corey.

Yeah, no problem at all. I, you know, I always tend to lean back, lean back to, you know, employees, leadership. How do you get those people? How do you keep those people? How do you build core values? You know, and I think that's such a hot topic. You know, everybody I talk to and probably the same Mike is, you know, nobody wants to work these days and everybody's lazy and I can't find anyone. And what I tell guys all the time, and I'm like, well, that's not true. It's certainly more challenging today. But the good companies, the great companies have people.

Yep.

You know, and what's the difference between your company and their company and what do you got to do to bridge that gap? Because, you know, at Perfect cut word, 165 people right now and we're full yet I talked to 10 guys in Des Moines, Iowa, who can't find two people. You know, and when Chick Fil? A builds a new Chick Fil? A, they don't go, man, we're not going to get anybody. They know that they program in place. Right. And a recruitment strategy and something that's appealing to people that are going to bring in quality employees. And of course they're going to train them and teach them that, you know, the way you know.

And I, I think like, I think this winter especially, like there's going to be so many, you know, LCOs go out of business just because the labor market, fuel inflation, whatever it might be. So like I'm actually starting a website here in the next few weeks literally just for them to buy and sell lawn care businesses, compare like profit and losses, balance sheet stuff like that. It's not, it's not like a paid service, but I think there's just gonna be a ton of them. But you're a hundred percent, right? It's like, no, you don't have a business if you're still working there. And it's only making what you would be taking out in draws as a salary. Like it's zero. So.

That'S funny because we had three companies approaches about three weeks ago, local companies, pretty small operations, less than, you know, six, eight employee companies. And they came in and said, hey man, we'd like to sell it. And I think you're going to see a lot of these guys that are, you know, the last stat I saw, and you're probably more up on it than I am, but the last stat I saw was 86% of the lawn care companies in the US do less than a million dollars and have less than 10 employees. So it's somewhere in that range. Right. And I think you're going to see a lot of those guys that I don't know if they're, you know, they want to sell, but there's not, you know, they got mowing contact, you know, they got, they move 75 or 100 yards a week, but they don't have contracts in place and they've got some used equipment. But I think there's going to be a lot of people. Gas is obviously coming down a little bit, but this year is really testing people on to your point. I think there's a lot of people that aren't going to make it and then there are going to be a lot of new guys that start up, of course, just like there is every year. But, you know, how do you position yourself to have a company and not a job and then even if you're not going to sell your company. We started building our company about eight years ago. I hired a great CFO who was the actual CFO of the Nashville airport. And she came in and she was just a ball buster and she did so much for us. She was fantastic. But she said, we got to make this, you know, we were running personal stuff through the company. And she goes, no, we're not doing it. We're cleaning this company up. And I'm so grateful and glad that we did that because when we weren't for sale, we weren't trying to sell. And Heartland just kept reaching out and reaching out and find that the numbers made sense. But. And we were debt free, which, you know, you got to get. You know, that's the other thing companies go to sell. And I asked them and like, I think it's worth X. And I'm like, but you owe 300,000, you're going to get. You're going to set 500. You got to pay taxes and you owe 300. You basically just, you got nothing. But that whole thing is, even if you're not going to sell your company, you should be building it like you're going to sell it at some point. You know, what does it look like? What if you were to get insured? Can it run without you? What are your systems, all the things that you've worked on, I'm sure extensively, to franchise, which, interesting enough, we thought about a franchise for Perfect years and years ago. And then we said, well, we're just going to start opening up our own branches, but in each branch it's a little easier because we've got good systems in place and typically we'll move one of our key players from one office to the other, give them an opportunity, you know, an opportunity to expand and grow. But yeah, so we looked at one point, like, what would it look like to franchise? And then we're like, oh, we got it. We had an attorney reach out. No.

We'Re out.

Cool.

Yeah.

Kind of building off of what we were talking about there previously, about just an industry as a whole. Do you feel like there's going to be more consolidation as there is a lot of tightening on the smaller operators and you see venture capital moving into home services and technology and the robots. Do you feel like consolidation is going to keep happening? Obviously, Perfect Cuts been, you know, purchasing become part of something bigger as well. Is that going to become a theme, you think, in the industry?

Well, I think the larger companies are going to continue looking at consolidation. You know, the company that bought Perfect Cut is a great. They've got great people leading that. And they were a part of a lot of the companies that were bought in the early 2000s, and that business model failed. Because what they would do then is they buy a company and they would change the color of the trucks and they change the name and they would change the culture and the model, and that failed. And so the new model that I'm seeing on a lot of consolidation is, at least in our case, especially with the Heartland Group, is they don't change anything. So for us, in our case, Perfect Cut looks exactly like Perfect Cut did. The only difference is they own the stock and I don't. And so they've learned quite a bit of what didn't work in the early 2000s and late 99, 98, when a lot of the monster companies were buying people up. And so I think that new model is working well, where they come in and they buy a company and they say, you know, because I've asked them, what would you like us to do different? They say, we want you to do exactly what you're doing. So they keep the brand that's already strong in that market and then they just add some of their synergies and some of their systems with better software. They have a larger employee pool, so you can get a lot of times better employee benefits. As far as healthcare, which continues to rise and rise, especially when you look at family healthcare and, and then of course your buying power, they have a lot of national agreements with Ford Truck and Isuzu and John Deere and Exmark. And so there's a lot of things that I think, you know, these larger companies are looking at when they look at buying companies. But I do think it's going to be tough for the mid sized companies though, to make it. Not all of them. I mean, certainly, there's certainly a market there. But that mid sized company is, it seems like where it's struggling. The guys that have maybe 30 to 40 guys where they're trying to compete with maybe the Nationals or the big boys.

You know, they still got all the overhead and they're, you know, really trying to keep the big guys and you know, then I think, of course, the small guys who can keep their overhead down and run very streamlined. I think that's always going to continue to do well, you know, and as we always talk about, you know, this gets beat up a lot is knowing your numbers and, and you know, I talk to a lot of guys that, you know, are constantly, you know, fighting that pricing game, you know, and, you know, making sure that they're being profitable. And we continue to talk to guys on our podcast and it seems like a lot of companies are downsizing and by choice, really understanding their numbers, figuring out what is my niche in my market, what are we good at and what do we want to Continue to grow versus just let's take everything that comes at us. And so I don't know if that answers your question, but to that point.

For a smaller firm, for example, maybe doing 0 to 2 million, 3 million in revenue, obviously there's kind of like that balance of do you diversify, add more services, upsell, improve the lifetime value of the customer versus really specialization, like, okay, this is the one thing, the one service we're going to do. Have you found a balance for that, for the smaller operator? Obviously these massive conglomerates typically, or larger companies even in general have a lot more services that they offer. Is there balance? Do you prefer you're buying out in Perfect cut, buying out a smaller operator? Do you prefer someone doing one or two services with a lot more revenue, or do you like to see some diversification in the services offered to be able to maximize the revenue from each customer?

Yeah, a couple questions there. You know, I think that for most guys, when they talk about I want to add more customers, the first thing I always ask them is, are you maximizing the value for the customers you already have? If you're just mowing, for instance, and you've got 100 customers, could you be offering, you know, the lawn care program, fertilization, weed control, you know, pruning, stick edging, remulching, weeding services, irrigation, startup shutdown and service. So I always ask them, you know, are you maximizing the customers you already have? So you don't, maybe you don't need 200 customers. Maybe you can get way more value out of the 100 customers you already have because they're, they're paying somebody to treat their lawn for the most part, maybe they're paying someone to turn the irrigation on and service it. So, you know, first thing is I always challenge guys to make sure you're maximizing your current customer base. They already trust you, they already know you. And so make sure you're maximizing that value, you know, and, and then when we look at companies too, we always look at, you know, what services do they offer? And for us, if we're going to take, if we're going to buy them and take, take them over, we look at can we get those clients and then can we offer them more services? Because we like for us at Perfect, you know, just speaking from my experiences, we like full service. We want to be one point of contact and we primarily 98% commercial. We just have a small residential branch, but we want to, you know, and we're in a snow, in a snow market so we want to provide all services to them. We don't want anybody else on their property and then we want them to value us. We really talk a lot about partnerships and you know, we talk, sit around and we talk about some of our biggest clients and we say, man, what if we lost client X? You know, it would be huge. We want them to be sitting around their board meetings saying, what if we lost perfect cut? They take care of everything. And so we really spend a lot of time with partnerships and we want to build our client base for long term. You know, and if somebody's just, again, I talk to people about this all the time is if you're just going to throw us in a spreadsheet and you're just looking for price, we're probably not the fit. So we want to meet with you, we want to know what, what's going on at your facility, what, what concerns do you have and how can we be solution based? What solutions can we offer you to solve your problems? Because we're not going to be the lowest cost. And with that, here's the resources we're going to provide you. You're going to have a dedicated account manager. We're going to provide, you know, monthly photos. We're going to let you know if we do damage on your property and what the remedy, you know, how we're going to fix it, what's the corrective action we're going to take. And when you have dead shrubs, dead trees, we're always constantly giving them feedback. So we're always looking to maximize our relationships with our clients. And again, looking for long term partnerships. We're sitting at a 96% retention rate.

Which is for us really, really good. I think for anybody, they'd be happy with that because again, we do primarily commercial. If you do a lot of residential, you're going to have a little more turnover because that's just kind of the nature of the beast. So again, for us it's partnership. And then we want to tell our story. We want to get in there and tell them who we are, what our core values are, what we believe in, what kind of expertise we have, what our skill level is on our staff. We have master arborists, we have certified irrigation techs, and you know, and so that when they get our prices, I always said the last thing we ever give you is our prices. You know, I hate when people just walk in and lay the prices on the table. We want to tell you everything about our company so that you're so excited to do business with us that the prices almost become secondary.

Absolutely. And in terms of, you know, growing the business, when you're looking at size of company like say zero to a million versus what it takes to take that million dollar company, make it 10 million, obviously yourself with perfect now doing many tens of millions in revenue, what does that look like for the different skill set that's going to be required from the owner? What is that? Not only their roles and responsibilities, but what do they as an owner need to develop for Maybe someone who's at 8,9 million or 8,900,000 revenue, 1 million marker, what's going to be the thing that they need to work on themselves and skills they need to get to take 10 million in revenue?

Yeah, good question. I think it first starts off with being really honest with yourself.

For me, I know what I'm really good at, I know what I'm bad at. So I continue to try to surround myself with people. I'm kind of chaos, I create chaos. I'm a driver. Right. So if you ever do those disc assessments which you've probably done, it says I'm a driver. And it just, when I read it, it looked like I must have wrote it myself. It was exactly who I am. So I think it's important for business owners to really understand what are you best at? And then what skill set do you need to surround yourself or skill sets in people to surround yourself with to take you from a million to 3 million, 3 million to 5 million, what does that look like? And I think a lot of business owners, maybe pride and ego certainly has happened for me, get in the way. And I'm not the smartest guy at my company, not even close. And I think some people have fear of hiring people that are better than them. My entire goal is to hire people better than me and all my companies. I want people that are smarter, better dedicated and focused. And that also comes at a cost. And I hear people say I can't afford that, you know, production manager, I can't afford that office assistant, I can't afford that foreman. And I always challenge them like what if they, how do you get to the next level if you, you know. And so I think it starts with honesty. And I'm still old school. I've got pads of paper on my right here and I've got notes for today. But you know, you write down what are you best at in your company? Where do you want to be? What obstacles are going to get in the way? And then if you're going to hire somebody, what skill sets would they have that? You don't have to offset that. And then you know what you're looking for. Because I had a, you know, I have a business partner at Perfect Cut, and people used to say, you guys are so different. I said, that's why it works, because we don't need two of me and we don't need two of him. And very early on, we defined our roles and responsibilities and said, hey, this is what I'm best at. I'm best at operations and I'll deal with the people. You're a better sale. You're great at sales, you're great at the systems. So I'll focus on when I'm best at you. Focus on what you're best at. And so I guess to answer your question, I think it's just, you know, you've got to surround yourself with great people. You've got to pay them what they're worth, and you've got to communicate. We're constantly communicating with people about, where are you today? Where do you see yourself in 1, 3 and 5 years? And can we build a career path for you if you're looking for a job and just a paycheck on Friday, we all need those guys, right? We all need guys and gals that can do the labor. But when you get an all star on your team, somebody that's an A player that stands out, do you recognize that and do you take action to make sure that you give that person a career path and communicate with them and do what you say you're going to do? I'm huge on that. If you tell somebody something, you got to do it and you got it. Because if you don't do that, as you know, Mike, they leave. And so you've got to recognize those A players on your team, and then you've got to be communicating with them and building out a career path for them. I'm a big fan of honest employee reviews. I don't believe anybody should ever be fired that didn't know it was coming. I believe. You know, I just saw a post on one of the Facebook pages and it's like, what do you do when employees don't do this, this, and this? And I'm like, you talk to them, you sit them down and have an honest conversation and say, joe, you're not meeting expectations. Because I, I take ownership in it, too. And I say, what can we do better? What can I do better as a business owner or what can we do better as a company to help you get to the next level. You know, every time somebody quits, we try to do an exit interview. And I assume you probably do the same or have over the years. I want to know what we did wrong. And sometimes it just isn't a good fit. Right. Sometimes somebody just. They found out that they don't want to do the work. And it's hard and it's hot and it's. But, you know, anytime somebody leaves our company, I want to know, what could we have done different?

Absolutely.

So long answer to your question. I don't know if that answers it for sure.

No, for sure. Definitely the people side of things. I know it's something you're going to talk more about potentially at Lance Summit, that people side of the business. When it comes down to selling a business. We were talking about this prior to the interview, and that is, you know, how many people look at the valuation, they come up with a number that want to sell the business. And then really you step back as a consultant or someone who's just been in the industry for a long time, like, look, your business is not worth anything. And something, even at Augusta, we talk a lot about is like, what is the enterprise value of your company? And knowing that even if it's a matter of, like, I'm building an asset, what is that asset worth even if I'm not going to sell it, what are the things that you look for at perforcut? As someone who is now part of a conglomerate that is writing checks and buying out and doing acquisitions, what are you looking at? Obviously from a larger scale, but what are you specifically, when you go into business looking for that makes them worth buying and something that's attractive to you as an investor?

Yeah, I mean, we always look at. First we look at, you know, the people, you know, we were interested in the people. We're never interested in the equipment. And, you know, everybody thinks their equipment's worth a bunch of money. And we'll. We'll buy the equipment sometimes. Most acquisitions that we've done, even before we were part of the Heartland Group, is the equipment comes secondary. We'll buy your equipment potentially, but we're going to offer you like 40 cents on the dollar, and you're not going to be very happy with that. So you maybe should just sell your equipment separately. But we look at, you know, what's. What kind of people do you have on your team? What's the longevity? What skill sets do they have? And then we also start with the client base. What type of clients do you have? Do you have Contracts in place, you know, what is your pricing structure? Obviously, we want to look at how the business is ran from a systems, you know, employee handbooks, safety records, you know, and then obviously profit and loss. I mean, are you profitable? And, you know, in our industry, if you, I'm sure you've seen most companies don't make bottom line net 4 to 6%, 4 to 8%. I mean, you know, they're doing a lot of work for very little money. And I talked to guys that are doing several million dollars and I'm like, man, you netted 4% last year. I'm like, you're not bringing home much money. And you're, and you're, you've got a lot of risk there. So, you know, we're looking at every aspect of it, you know, what is their reputation in the market. But really, for us, a lot of times it's people and clients. We don't as much care about the profitability because we feel like if we can bring it onto our platform and get some synergies within it logistically, maybe there's, you know, clients that make sense. We do three here. Maybe this one fits into our portfolio very well. And then, of course, it kind of sounds crude, but can we buy it out of. We need to buy it out of value. We're not in the business of overpaying for other companies. And then sometimes we've had some very good success with buying companies and bringing the owner on. And they've been great assets for us because they might be a great leader. They're just not a business owner. We bought a floral company and she was with us 15 years. She just retired. She's amazing at her job, but was terrible with billing, terrible with paperwork, terrible with payroll. And we said, we'll handle all the back end stuff. You just go, do you run your team of 12 or 15 people and you just do what you're really, really good at. Let us handle all the BS on the back end. And she was a fantastic acquisition for us. And we grew our floor, floral department, exterior and interior, just tremendously with, with her skill set and really depends on, you know, why is the company selling? Does the owner want to stay on in any capacity and, you know, what does their team look like? And most of the time we find that, you know, that we can keep a lot of their people on because we can offer them maybe more stability, you know, better benefits. 401k. We keep all of our people on in the winter. So a lot of times, you know, when people say well, if you sell the company, I'm leaving. But we have those interviews. It's kind of a tough one because you can't, as an owner, you typically can't tell your people you're going to sell. But before we write that final check, we typically meet with their staff and say, here's what we're doing. We really hope you stay on. We think you're going to be so much happier here. Here's our growth plan and here's our strategy and here's how we think we can take really good care of you and you're going to be a part of something special. And here's our core values. And we kind of have a big kickoff. And so we just, I just think communication and understanding what you're getting into. And you know, of course there's always that tough conversation about what somebody thinks it's worth and what it's actually worth. And, you know, it's typically some multiple of ebitda. And are their books correct? And I encourage guys always to have their books correct. And we've looked at a lot of companies and like, well, I know my numbers don't look good, but I've got my boat ran through there and I got a cool. I pay my wife, but she doesn't work here. And I'm like, I'm sorry, but your books are a mess and we can't make heads or tails of your books. And, well, I'd like to add all those back. I'm like, yeah, I don't know that we can do that. So I encourage you guys always to clean up your books, run it right. Don't be ramrod in your family vacations and your cars and your boats and your camper and all that stuff through your business. I know it feels good sometimes and it's easy. And guys, well, you can write it off. I know. But if you ever want to sell that company, it's certainly hard to explain to the next guy that the reason your books don't look good is because you've got $200,000 in discretionary spending going on. And I'm not going to pay you.

Value for that operationally for maybe a smaller LCO landscaper that is maybe only doing 3, 400,000 annual revenue. They're 40, 50 maybe, looking to retire, get out of the business. They're just beat up and wore out physically. What's that value look like? Can they create something that they actually go sell it for beyond just the value of the equipment? And if they are only doing three 400, 500,000 annual revenue. What should they be doing to optimize that business and make it something that is hopefully going to be a nest egg for them in their future?

Well, I mean, obviously, I think it's important to not have a lot of debt so that if you are at a point of selling that you can, you know, hopefully there's something to be left over there, but.