September 1, 2015

Advice is yours for the asking

This month’s mentor is Tim Kearney CLM of Garden Creations of Ottawa in Ottawa, Ont. His leadership roles have included sitting on the board of directors of Landscape Ontario, a mentor delivering LO’s Prosperity Partners program, and he is currently a facilitator with LO’s new Peer-to-Peer network. 

Q. Can you tell us a bit about your background
    and how you came to work in the green trades?

A. When I was 16 years old I worked at a local garden centre and landscape company for the summer and fell in love with plants and horticulture. The second summer I worked for the company’s landscaping division and loved all aspects of the job. In 1981, after nine years working for the company I started my own business, Garden Creations of Ottawa. We are a full-service company, with design/build, construction and year-round maintenance services. After 34 years in business, we have close to 30 people on staff. About half of my team is full time and half seasonal. 

Q. Companies often seem to win enough work, but never make a profit. 
    What are they doing wrong?

A. If you aren’t making a profit, chances are you don’t understand your overhead costs, so you aren’t pricing your jobs right and recovering your overhead.  You need to price your jobs to cover overhead, and understand it, or it will bite into your profit. It could be that you didn’t budget the correct amount of time or material to do the job, but most likely you haven’t covered your overhead, and unfortunately most guys are so busy during the season they only find out in the winter. Too late!

Overhead can be quite dramatic and is different for everybody – when I look at the numbers I have to include in each quote to make sure my costs are covered, it is relatively large. A smaller company may have a lower overhead, but the number is still critical to business success. I tell people, “You gotta know what it looks like.” Contractors have to recover their expenses, as well as set aside money for future equipment purchases — success is all in the overhead. Once your overhead is factored in, then you can add your profit.  

Q.  How can landscape companies
     find the time and money to provide training?

A. This is a culture that has been adopted by our company, it is also a line item in our overhead.   But you have to be careful — you can’t overcharge for your education budget, or you can price yourself out of competition. My company has a philosophy that we are going to educate and train our staff. We tell all new employees that they are beginning a journey — there are many different jobs in the industry and they will gravitate to the one they enjoy. We will support their career with training through the year, including tailgate talks in season and seminars that LO offers in the off-season, apprenticeship, and at trade shows. I try and bring staff to association events and meetings whenever possible. Several years ago, we committed to the Jim Paluch Working Smarter Challenge for an entire year of training and development. Our core values reflect the need to train. TEAM stands for Talent Excellence Adaptability and Mentoring.  That starts right at the top and continues down to the entry-level people.

Some of my staff might grow and leave my company, but you know you aren’t going to keep everyone forever. The ones that have left over the years have started their own companies, and are doing well. That makes me proud. 

Lack of skilled or willing labour is a limiting factor in our industry. There aren’t enough graduates from all the hort programs in the country to go around. If you get a young, smart, bright person that shows an interest in working for you, you’d better get them involved and support them with training to develop a successful career.

Q.  How do you avoid wasting time on dead-end calls?
     What is a professional way to prequalify customers? 

A. I don’t know if there is a perfect solution. The only way people communicate with us now is online. Our website is our electronic portfolio and my staff directs people to it to see the type of work we do and read about us, and then call us back if they are still interested. We find that weeds out a lot of tire kickers.

After that, we rate calls. Obviously referrals are qualified leads we hop on right away. Leads through the website or phone we might be a bit slower to follow up with, and there isn’t a year that goes by that I don’t get stung, chasing a lead that wastes company time. 

Q.  Any business books to recommend?

A. One book I have read many times, and keep close by is The Five Dysfunctions of a Team, by Patrick Lencioni. If you are ready to start growing your company, it deals with all the silos and personalities that a company may have and how to build a team with everyone on the same page. It is an easy read, and Lencioni is quite comical. It’s like a ‘business for dummies’ book.
Let’s face it…the  best-looking company with the most systems will not be successful if your staff doesn’t work as a team. We are in the people business, and your people can really affect the success of your company.   

Q.  Is there one specific moment or action you can pinpoint that took your company to the next level?
     What prompted you to make that change?

A. The moment that stands out to me was attending Charlie Vander Kooi’s estimating seminar at Landscape Ontario’s Congress in the early ‘80s. I had started my company, I was a really good landscaper, but I sucked at being a business owner. I was working hard, clients loved my work, but I was struggling to make money.
During Vander Kooi’s presentation on estimating and pricing, I took notes like a fiend. I think I filled an entire notepad, and still remember he said, ”Recovering your overhead is your God-given right!” Learning how to account for all my costs and price jobs right changed everything for me.  Jean Paul Lamarche has also been a great influence and I would highly recommend a new company connecting with someone like JPL.

I have had the opportunity to meet with lots of green industry business owners through my involvement teaching the Prosperity Partners program and helping with LO’s new Peer to Peer Network. I know a lack of business knowledge is a major limiting factor for struggling companies. When I first started landscaping, I had to learn by doing and making tons of mistakes. But now there are so many estimating or pricing courses available through your horticultural trade association, that there is no excuse not to be successful. Not all of us need to be top accountants, but as a business owner you must be able to read a balance sheet and P&L statement. Again, I say, ”You gotta know what it looks like,” in order to be accountable to your business.

Q.  We want to grow our business because we constantly hear
     that in order to survive and create lasting sustainability we have to.  
     When and how do we  determine when and how to do this?

A. This is really two different questions, as I know many small companies, who have purposefully stayed small and are incredibly successful. They treat their company operations like a big company, but have found their niche. Not everyone needs to grow to be a large company.

If you decide to grow your business, make sure you have enough sales to support it. Sometimes in the heat of the season, people are pressured into taking on more staff to get more jobs done, to satisfy all the customers that are calling. It all goes back to knowing your costs. My advice is to slow down and look closely at your numbers. Sometimes it’s ok to table growth, or to just say no, we can’t do that job for you. 

Often, just doing work for the customers you have is enough. It will allow you to sleep at night and not be fielding phone calls from angry or impatient customers. It’s all about quality of life.
My final word is, the green industry is full of willing mentors. If you get involved and are not afraid to talk to people, the advice you will receive is priceless. 

If you have suggestions for questions, or a leader to be featured in an upcoming issue, please email editor@landscapetrades.com.

 

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