Building A Multimillion Dollar Landscape Firm

Edited by Christine Menapace
From the December 2023 Issue

Janna Bradley is the co-founder and COO of Landscape Management Network (LMN), a leading provider of landscape business management software, developed out of a need at Bradley’s former landscape firm, TBG Landscape.

In 1997, TBG started as a small residential design-build company serving a suburb of Toronto. Over the next decade, it grew to $50M in annual sales, with 200+ employees, and multimillion dollar contracts. Bradley and co-founder, Mark Bradley, juggled both TBG and LMN for many years, until selling TBG in 2018. Though, in Bradley’s words, “We couldn’t have LMN without the experience of TBG.”

Recently, Bradley hosted an “Ask Me Anything” webinar with questions submitted by landscaping pros. Here’s what she had to say (edited for clarity):

1. Do you have any advice for landscape business owners just starting out?

When we started TBG, we didn’t have the luxury of putting in systems and software. We didn’t even have a mentor. So I would say the first step is to focus on finding a good mentor in your area. It doesn’t have to be a landscape industry mentor, it can just be a business mentor in general.

The other thing is to establish some very simple systems and processes within your company. It doesn’t matter if you have two people or 200. Every time you do a process, think about what works, what was efficient and simplest. Keep it simple.

2. What was your experience in transitioning from working in the business, to running it, as you started scaling up?

I think it was gradual. We all know we wear 50 different hats when we’re starting. You’re a people manager, equipment manager, designer, estimator, an HR consultant, and sometimes you’re the snowplow driver. There were many days when we would be doing landscape designs all day, have a snowstorm hit, and then be on the road all night. I was seven months pregnant driving a snowplow at one point.

It’s about following your gut, and knowing when to delegate. When you get that gut feeling, don’t resist it. Find somebody that can take that hat. I think it’s important that you’re always training somebody along the way. Look for that person who can fill your shoes, and that you can pass that hat to.

3. What tips did you find in terms of getting a solid estimate going?

Once we had established LMN as a platform and were using it at TBG, we relied on templates and work processes we knew to be tried and true. We looked at our crews’ production to find out what they were really good at. We identifed, “Jeez, this crew can really lay pavers well.” When we knew they had a capacity of laying X-square-feet in a certain amount of time, we understood we could rinse-and-repeat that process.

It comes from job costing and examining each work area, each job, and each type of job. Where can you find efficiencies? What work areas are you really good at? Focus on those areas. If you can rinse-and-repeat a template—and you’ve got really solid gold, bronze, and platinum packages—you can fire those estimates out really quickly. Then you can set up all your crews on a schedule that follows that same template, and those efficiencies multiply very, very quickly. It starts with your estimate and goes right through your job. It’s so critical, but it took us a while to figure that out.

Initially, we were just so busy. You go from job to job to job. You’re trying to create cash flow (we know that’s an issue), and you’re just trying to get teams paid and the next payment in. It took a while for the light bulb to go on where we were examining those jobs, looking at where we were performing really well— and not so well—so we could tweak the next estimates.

For example, carpentry was a nightmare for us. We were terrible at it in terms of efficiency. We were good carpenters, but it took us a very long time. As a result, we weren’t making very much money on it. We had to tweak those things to bring in more subs, and increase the profit. It’s important to watch those things as you go along.

4. What advice would you have on scaling your business to the next level?

As far as scaling goes, it starts with people. There’s no point in trying to increase revenue if you don’t have people. But it’s like the chicken and egg scenario. Where do we find the labor? That’s the age-old question everybody has. Some of it is ensuring you have those core reliable people, that also have the ability to train (or use tools to train) the people around them. Then you have the ability to scale.

The other factor is manipulating your budget, and understanding if you can afford to scale. The most important thing in your business is a budget that’s workable, and that you can revisit.

When we were contemplating buying equipment or hiring people, we would go into the budget, and say, “Ok, what happens if I add a three-person crew? How does that affect my profit margin?” It took just 15 minutes to look at it and say, “Well, that’s too much.” But what if that crew was able to generate X amount of dollars in revenue? How does that change things?

We were able to get a very quick insight into whether or not we were able to scale in certain areas — people, equipment, whatever — just by having very solid confidence in our finances and budget. You have to be able to manipulate numbers.

5. What was it like in terms of getting over any humps?

There’s that initial level around the million dollar mark when you have maybe two or three crews. Do you add that next crew and the equipment that goes with it? As mentioned, we relied heavily on manipulating the budget. With certain jobs we would say, “Do we want to take this on?” Let’s say it was the year’s golden job: we would look at it, price it, then roll it into the budget, asking “If we add X amount of revenue, will that allow us to purchase or hire whatever or whoever we need to do this job?” If you’ve got your financial foundation, then you can look at how you are going to grow with your marketing, equipment, and staff.

6. Is there anything you wish you had started doing earlier in the growth process?

Looking at job costing earlier. Again, it took us a while to really understand that. It’s just quick ratios, such as: What is actual labor to the amount of estimated hours? If I bid 1,000 hours on a job, and total number of hours worked so far is 800, do we feel we’re 80% done? If we do, great. That’s a good gut check. That’s primitive job costing.

But if we’re not 80% through that job, it’s a red flag. We need to make changes. Are we overworking it? Did we make a mistake with the estimate? That’s very rudimentary job costing. That was something we started to do all the time. In those gut-check moments, we could pivot a lot quicker with those jobs to make the corrections.

At the end of the job, we would look at the analytics to see what worked well. The planting crew killed it, coming in under time and upselling trees. The paver crew did well, but fell behind a little. Was it an estimating issue? A crew issue? Or an external issue like weather?

The other piece for us was not focusing early enough on our back office. The back office is so key and underestimated. We’re very field focused, but the back office is coordinating customers, designs, out- reach, paperwork, and payroll. You can’t underestimate those folks.

Hire administration early — even if it’s just part-time, do it. There are so many tasks that run in the background to make the field more efficient, so the back office has to be treated as an equal priority.

7. As you were scaling up, how did you secure financing? Did you create debt?

Cash flow is huge. Landscape businesses are very asset-reliant and payroll-reliant, so we need to meet the demand of cash flow. What worked for us was establishing a relationship fairly quickly with a really solid leasing company. We leased our trucks and equipment through them.

We would have regular meetings with them to say, “These are the jobs coming up, this is where we’ve been, and this is where we’re headed. We need to anticipate equipment needs.” Then we were able to negotiate terms, such as skipped payments at certain times of year when we knew our cash flow was odd. (There’s that weird period of time in January/ February, where landscape income has slowed down, but you haven’t gotten snow checks fired up yet.) So we would skip some payments during that time, but resume them again in the Spring.

Some bigger manufacturers, like Caterpillar, have their own financing. They love landscapers and set up really favorable terms. We established that relationship really early and went to them loyally.

It comes down to relationships and being super transparent. If the job doesn’t go well and you need some time, pick up the phone and ask for it. With a lot of these financing relationships, they will accommodate you.

8. Owners wear many hats. What’s the first one to hang up in terms of building that back office?

For sure it’s the administration. It’s one of the best ROIs. Whether it’s a part-time office assistant or third-party consultant, handing off that piece of your time generates more efficiencies and revenue. You can be focused on selling, training your staff, or figuring out the right budget. The administration person will return your time five times over.

But they need to have the right tools. Do you have a good CRM? Do you have something as simple as Slack? The ability to communicate with the whole company is critical. It’s not just hiring another person. What are the tech-based tools that are worth investing in to take some of that admin and communication off of your plate?

9. Before Slack, what were you using? Texting?

We were using a lot of group text, but once we brought LMN in, a lot of the messaging resided within the job plans—right in the actual estimates. Anybody could log in and have a look at the job plan, see the conversations or what was promised.

At one job in the city, a lady who lived next to our customer decided the curb in front of her house “belonged” to her and nobody could park there. Through LMN, a message would pop up every week for the crew with a reminder of the parking issue. This saved many phone calls and headaches. Or Mrs. Jones doesn’t like red flowers…. that was another one I can recall. A gate code, a dog in the backyard, things like that were crucial. It helps keep your customers happy. It lets your crews know what to expect.

10. Do you have any advice with converting a landscape business from a sole proprietor to employee-owned?

When we transitioned out of TBG, we sold it to a couple of key employees. While I don’t have any advice on taking things public, I think you should communicate to the team as you grow, that there are opportunities for ownership or part ownership.

When we implemented LMN, we made these little mini-teams (or divisions) within the company and gave them their own budgets. We said, “This team consists of these people, they’re going to do X amount of revenue, and here’s the costs related to them.” It became the manager’s own mini business for which they were responsible.

We obviously had to monitor how much time it took a team to complete a job and that sort of thing. What were the expenses against the job? We would track all these mini businesses and coach them along. We were very transparent about budgeting, profitability, and things like that. It gave them a sense of ownership from very early on.

We did this with the main managers, the foreman, and the sub-foreman, depending on the crew. This system is also a retention tool. It shows who’s interested in a career path in the company. We found it was a really good method when it came to eventually passing the company on.

11. In terms of the journey, what did the first five years of your landscape business look like?

The first two to three years were absolute chaos, to be quite honest. We were new to the Industry, full of piss and vinegar, young, just ready to get out there and do right. But we didn’t have the systems in place behind us to be strategically organized within the areas we needed to be. It was trial and error on everything. That’s going to naturally occur with a new business within the first five years, for sure.

But I think we learned really quickly what worked, what we were good at, and then we rinsed-and-repeated those things. Whether it was people, processes, or equipment, we tried to focus on efficiencies and slowly that chaos started to quell. It was establishing routines, and having systems in place.

Just simplifying things like: why isn’t the blower hanging in a specific spot? Establishing the end-of-day routine so everything is washed, gassed, and fueled for the next morning. Things that made everybody’s day so much easier. It took us five or six years to get all those things in place. If somebody had said, “From day one, do this,” we would have been lightyears ahead as far as efficiencies.

If you follow the same framework every day, it just sets the tone of expectations. Everybody within the company is holding each other accountable.

12. The team is the heart of the business. How do you find qualified people who will be accountable or even show up to the interview?

Finding people was always one of our biggest challenges. We followed a regular system — post the job, include what we offer, what we’re about, the standard stuff. But this was the game changer: we would filter through the resumes that came in, and if someone tweaked our interest, we sent them back a questionnaire. It was 25 questions long and required time to fill it out. It was just simple questions; they weren’t even all about the Industry. They were things like, “Tell me about what you like to do in your spare time.”

It would weed out so many people! But the ones that took the time to return the survey would move forward. Even though that extra step took a little bit of time, it helped the superstars rise to the top.

13. Are there other strategies you used to find employees? What about hiring platforms or Craigslist, etc. Any tips there?

It’s really market dependent. You have to find what’s great for your niche. What’s cool about your company? Do you have strong community or volunteer initiatives you could broadcast? That could draw people in. We all have our incentives, but I don’t know if we talk about them enough. When you place ads, company rewards are very important to communicate.

There’s also word-of-mouth when you get established. It’s a small Industry and word spreads very quickly. Don’t be afraid to pay the good people more money, and have fewer people. Look at your bud- get and say “If I pay everybody X more, how does that affect my bot- tom line? Do I need X many people if I have five people getting paid a bit more, but with a higher skill set? How does it affect my profit margin? How much extra revenue do I need to pay people more? Paying a bit more for better skill sets will attract the right people.

The other key thing we used was a matrix. Laborer level one, laborer level two, truck driver, sub foreman, etc. It was a career path, including hourly wages, and the minimum criteria for each level. After people work for a few months, they’re like, “Johnny down the street just offered me two bucks more.” So we established this matrix to say “Here’s your pay level, and if you want to earn more, here’s how you get there. Put 100 hours into the skid steer, do 10 Greenius course trainings. When you have 2,000 hours, you are eligible to bump up.”

This was huge because it showed there’s career growth. That matrix was posted on the bulletin board in the shop. Employees could see it all day long, and look at it whenever they wanted. It was very transparent about what Sam, the driver, was earning. It was, “You want to get there? Here’s how.”

14. How often would you do that modeling for pay increases?

We would review where everybody was on an annual basis. When we were doing our budgeting for the following year, we would work all those new changes in.

15. At what levels would you create new titles, like HR, to support the back office?

We started layering and adding those items around the 20 to 25 employee mark. You start to get into health and safety programs, due diligence, and things like that. There are a lot of third-party consultants that do a “timeshare” scenario: they do HR for five different companies, so you pay a partial fee. If it doesn’t make sense to bring someone on full-time, look into those services.

16. Anything else in terms of helping employees see the Industry as a career?

Pick something involving the community that your team is collectively passionate about, and that everyone can participate in. It shows the company is more than just a business.

The other thing is to get involved with your associations. They have so many programs —like webinars, events, and trade shows — that benefit both employees, and the company owner.

And send employees to school. Sometimes there are grants. Even if just one employee participates, it shows the rest of the team that you’re building a business, and a career for them to stick with.

17. Let’s move into operations. How did you come up with an efficient processor system to get you to $50 million?

In a nutshell, we built LMN. Prior, we just didn’t have something that could keep us organized once we were at a really high revenue capacity. We later realized that wherever you’re at with revenue—whether it’s $200,000 or $200 million—the processes and  procedures are the same. You always need to budget, understand overhead, look after equipment, and train employees.

It was a lot of trial and error, figuring out what we needed and the resources. We realized our Industry is super niche and it takes a unique bunch of systems in order to run efficiently. When we put LMN together, it accelerated everything because efficiency accelerates growth. When people are efficient, and they’re getting to their job, and they’re happy, they perform better. It was just that natural momentum that got us there with those processes and systems.

We often talk about systems as a “big picture” thing. But I think, in some ways, it’s the simple things. For example, we used to have everybody come back to work during snow season to wash the trucks and get organized. When you have 10 trucks in the yard, you’re paying 10 times the labor to wash trucks, get organized, and refuel. When we examined that cost, we thought, “What if we had a mobile wash come twice a week? What if we had fuel trucks come in the middle of the night?” It was mind blowing, and we saved hundreds of dollars.

Payroll was also huge. When we finished implementing LMN, we were still data-entering to QuickBooks and it was taking the office three days to submit all timesheets. We told the developers, we need a link to QuickBooks that shoots all that data over.

18. Is there any one process you should automate to get the most ROI?

Timekeeping. Having the ability to track time is key because labor is our biggest issue and our biggest cost. When you start to track hours on a job versus what you’ve estimated, you can see instantly where you’re at budget-wise. That’s huge. The automation of job-log sheets, analytics, and billing is super cool. The key is wrapping it back around to job costing, and really understand who’s performing and where.

19. Is there a certain percentage of unbillable time that’s typical for sales?

For sales, you can look at it two ways. At some point, you need to work it into your overhead. It’s not something necessarily attributed to unbillable time. Unbillable time is travel time, tailgate talks, unloading, and things like that.

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Think about roles, and if time is truly billable? Owner’s wages should be in overhead. But if you’re an owner and spend half your time working in the field, then allocate those hours to that job. Sales should also be in the overhead unless, again, you can attribute that time directly to a job. It’s the same thing with designers, they need to either go into overhead or they need to go into a job.

20. Did you use multiple meetings to keep the company connected? Or one main meeting?

We would have a weekly meeting, and it would cover sales, equipment issues, and a training component. Outside of that, on a daily basis, we would have tailgate talks. That was 15-minutes where the crew leaders would lead a discussion and give updates.

One of the fun things we’re seeing is how customers are using Greenius. They’re using custom courses employees can access from their phones. They’re also adding in weekly or daily messages from the owner/foreman that are distributed to the whole team. One company did a leader shout-out every day.

Do you have a comment? Share your thoughts in the Comments section below, or send an e-mail to the Editor at cmenapace@groupc.com.