Should I Build My Dream Shop?

Hey everyone. Mike over@landscape businesscourse.com today I'm going to be talking about the different times you should be looking at a shop, an area for an office, an area for to store all of your equipment and kind of the different stages I see happening in our industry. And then also explaining when you can and when you might want to think about getting your actual own space, creating a retail yard, selling product, etc. So before we jump into that though, a couple big announcements. We got a blog now, so a lot of you have been asking, hey, I don't listen to podcasts, I don't watch videos. I like to read. So I started a blog. Just go to landscapebusinesscourse.com and you'll see a tab called Blog. Just tap on that. I think there's like four or five articles on there already. Go ahead and you can read those. And if reading is what you like to do, feel free to read that. And I also did put the video with that. Each article I put the video that corresponds with it. So you can kind of get the best of both worlds. So check that out. That's the blog. The next thing is something that's kind of. I'm a little bit hesitant to share, but it is definitely in the future. And the reason I'm hesitant to share just because we haven't. It's not built yet and it's still something we're working on. It will at least take at least a year to complete and get ready for you all. But I wanted to make sure you all know about it. Cause I get asked so much if we are gonna create training for people out in the field. So for landscaping and hardscaping and things like that, tree care, safety and things that you can give to your field staff. So recently we made the announcement about creating the facility, the training facility that we are working on right now and building out. And that's going to be by the end of this year going to start having live sessions for office staff, project managers, estimators and business owners. That's who we are going to be targeting in different conferences and sessions where my people and myself can train your team and your staff. And so that's going to be the facility. However, a lot of you been asking about hardscaping and different techniques for your field staff. How are we going to train them? So we will do some stuff at the training facility, but I understand it's not super economical to send 2030 field staff, if you have a larger organization to this to Washington State. So we are working on an online platform. So this is something again, I'm not. I don't really want to share because it's still a ways off like, I mean like a good solid 10 to 12 months. I'm hoping it's ready by the time we launch the in the in person facility. But we're using the studio that we are building out right now to start filming SOPs creating systems and procedures for field staff to follow and so you can train them online. So that platform will be online for field staff. So for you know, people to drive their zero turns and safety around spraying and safety around skid steers and how to build retaining walls and patios. We're going to start creating videos. They're going to be short, they're going to be tight, they're going to be well documented and photograph like really well created. It's gonna be the same sops that our business uses that you can implement in your company. So that's gonna be down the road. We're still working on the design, the website and things like that. And it's gonna come into fruition once we get the studio built, the actual physical space. So this will probably be one of the last few episodes I actually have in this setup with the whiteboard and all of that because the studio is being built out and we've almost got to the place where I can start start recording there. So probably within a few more weeks you'll see a few more of these videos and I'll be over there in a lot nicer of a facility. So that's gonna be a lot of fun. But today I'm talking about your shop. And this is something that a lot of people think about when it comes to landscaping and in our industry. It's very, very fun, exciting to have your own facility, have your own office space, have your own shop where you can park your trucks, your trailers, have all your staff meet there and customers can come there if you have an and so it's very exciting. You can take a lot of pride in that physical space. And it's something that a lot of landscapers love and dream about because they've ran out of their garage or ran it out of their own personal house for a long time. So I kind of see a few different stages when it comes to your facilities and with landscaping and lawn care and I feel like in general we jump too fast to get shop space and an office and all that. In general, our industry, because it's fun, it's exciting and we can kind of get proud about it. But you don't want your pride to govern your business decisions. And so yes, it might be cool to bring your family by for an office visit or it might be cool for your friends to drive by and see your sign or all your trucks lined up. But if that's the basis in which you're making your decision, it's not going to be economically viable or sustainable. So you have to make a business decision when it comes to where are you going to locate your shop. So I feel like there's kind of a transition. Number one, everyone usually starts in the garage at their house. If you're just starting out or if you're starting part time and kind of ramping up your business. A lot of people start their home, maybe they have some acreage and they just park things there. Maybe they have a garage, maybe they have a shop at their own house and that's where they store their truck, the trailer, et cetera. Then they get like two, three trucks. Now I have a couple employees parking at their house and all that. So you know what? We need to get a storage facility. So a lot of people go from a personal house to some sort of a storage facility, maybe in a business park, some sort of like one of those roll up doors and you have like a 40 by 20 space, maybe a little bit of an office space in there. But that's kind of the next step, that storage facility. It's cheap, it's really nice in terms of it's a secure, nice space, usually built out in a good location as far as your immediacy to all your jobs and your routes. So storage facilities are a lot of times the next step out of someone's physical home and their, their own garage. The next kind of spot out, you know, up from that is now they get their own shop. They need more space. The storage facility is not working out in terms of having three, four plus trucks. So like, you know what, we need to get some acreage or we need to get some space where we have our own, our own, our own acre or 2 acres or 3 acres of space to park our trucks and our equipment and things like that. Then the next step, once the company become mature and begins to grow and really begin to scale up, a lot of times the next step is actually having a space that is accessible to the public. So this is going to have an office, it's going to have a place where they can come, customer can come into and be sold. Big projects. You can have displays out of landscaping projects. You're going to have your office staff there usually 2, 3, 4 plus people in the office full time. We at our company, we have retail, retail products they can buy. So they can buy soil and mulch and gravel and different types of bulk materials. So that's all there. We have a big facility we're building now is for in terms of like a putting green and a couple patios, just sort of demonstrating the work that we do. And so these are all things you can do as you begin to scale and grow. And I find too, too much of the time people will leave their garage or their office at home and jump into like a nice storage facility. They're paying 800 bucks a month, a thousand bucks a month, when really their company is only generating 5, 6, $7,000 a month in revenue. And you do not want that large of a chunk of revenue being gobbled up in the expense of just storing stuff. All right, so this gets back into the whole idea of us buying too much equipment. Trailers and trucks that have to be stored. Same thing with product. If you have, you know, in a physical store location, like a retail store, like selling clothes, a lot of those business owners, they buy too much inventory and thus they have to store it. They have to build out back ends of their store and store it all and keep a bunch of inventory and the dollars per square foot of their facility drops. So what you don't want to do is get so much equipment and trucks and trailers that you have to increase the footprint of your storage facility. You have to increase the footprint of your office or your shop simply just to store everything. Alright, so first of all, I would say stay in each of those categories as long as possible until you really have to go to that next level. So if you're in your garage right now, if you're at your house, stick with it. You know, once you have two, three, maybe once you get four trucks, then go out and get that storage facility or go get some, a couple acres to rent and keep your stuff there, like wait as long as possible. This is an expense until you hit that last spot where customers are seeing you down. Like you're in a really good location. You have storefront, you have place where people can come into and you can sell them things and all that until you get to that. There's really not a whole lot of value in having more space and a nicer office and all of that. And so I'd really focus if I was you. If you're smaller still, stay in your house or in your garage, then Once you do move, stay in that smaller facility until you have to go bigger. We are currently, you know, we've just really moved our headquarters from blaine to bellingham, and it's cost over $100,000 to. To move that facility and build out that facility. And that's just in the past few months. All in all, it's probably been almost a quarter of a million dollars to build this facility out, have the big ecology blocks for all of our bulk materials and all the mulch and the soil and the gravel, like those bins built out to have the office space built out, to have all the gravel in the base of the entire facility finished. To build up the signage to. To build out all the landscaping out next to the road that kind of displays all of our work and our landscape design. And it costs a lot of money, and there's a huge return on that because now, obviously, we're on the main highway, and we get thousands of cars passing us every day, and we get traffic just walking in the door. And we have these massive. I think they're 10ft wide, 10ft tall, 20ft wide signs, two of them facing out towards the road. So there's a lot of benefits to it. And so a couple things I would really ask yourself, when it comes to renting a shop or buying or whatever is. Does the rent that you pay for that facility make sense if it wasn't? If you take away the equation that you just need to store stuff, what I mean by that is, for us, we rent this land for only $1,000 a month. Absolute steal of a deal. Get a couple acres. Absolute, like, steal of a deal. The land itself, the. But it was a blank canvas, and we spent hundreds of thousands of dollars to build it out the way we wanted. But I look at that rent expense and say, okay, if I put a sign the size of our sign out next to the road, I would have to pay at least $1,000 a month just to put my sign there, Let alone have a shop and have all this two acres of space and be able to display our landscape design. So I look at that thousand dollars a month in rent as my. Almost like an. In my mind is an advertising cost to putting these massive billboards out against a very main road in our market. So does the rent make sense outside of the fact that you just need to store stuff there? If all your shop is doing is storing stuff for you, I would absolutely minimize the cost at all cost. You do not need a $5,000 a month facility if all you're using it for is parking trucks, trailers and having an office staff. You can get away with a 2 acre piece of land that's back in the corner of your target market, close to your jobs, but not on a main highway. If you're just trying to store something there, you can get it four or five hundred bucks a month. Just store your stuff on it. Get a mobile office. You do not need to build an office with a foundation if you're not going to be out in front of the public and you're not going to have customers coming in and you're not going to be there for years on end. So I'd really look at how do you make a lean machine when it comes to your shop unless you have customers coming in and it's driving revenue. Like we have customers coming in asking for bulk materials and deliveries and they come and get loaded up. So our facility, like the location, the real estate that we rent and are trying to buy right now, is actually.

Very. Actually it's a profit center for us because we're able to use it to actually sell materials and sell product, let alone the matter of fact that customers can come. We have an office space where they can sit down, we show them pictures, we show them videos of the jobs we've done, we have a big screen where they can see things. And then obviously we've got to house our office staff. But if we were not selling materials and we were not actively using the space as a way to advertise the community with our frontage against the highway, there's no reason to have a big shop or a bunch of space or expensive office. Like there's just no reason. And so regardless of your at a personal house in your garage right now, or if you're at a storage facility or if you're at some acres that you rent, or if you're at a really nice shop and you built an office and you have warehousing for all your materials and you have big storage containers for all of your equipment and you have spaces like parking areas and you have landscaped areas like all of that, like at each and every space. I'd really take into account the fact that it is an expense to make a shop. So don't let your pride dictate how fast you go down that continuum. Make sure it's business decisions and that the expense you spend on that shop is not simply being spent for the storage of your equipment and your junk that you've bought. Really make sure that if you're going to really dish out and make an investment. It's actually going to bring positive revenue, more customers, exposure to the community in some way, shape or form. So if you have a shop, if you have are in your house right now and you're just out of your garage, I'd love to hear what you want to say in the comments below. If you're on YouTube or on Facebook, are you in a shop right now? Are you in your garage right now? What's your revenue right now? That's what I want to know. Where are you at in this continuum and what's your revenue per annual year? What's your annual revenue about going to be in 2019? I want to know that below because not for me, I want other people to see what your revenue is and where you are at in that continuum. Are you in your garage and at your personal house? Are you in a storage facility? Are you renting out some land or do you have a full fledged operating office and shop? That is really a marketing piece to your community. I want to know where you're at in that continuum and I want to know what your annual revenue is and I want other people to see that it's possible to extend quite a bit further than they think without having to make big purchases and capital expenditures. Thanks again. Mike Andes landscapebusinesscourse.com We'll see you next time. Sam.