All posts by Dave Praetorius

Ten Proven Strategies to Boost Your Landscape Business — Taken from my Design Build Growth Summit.

Labor Day was perfect for taking a break, and building up your reserves to tackle the final leg of the season.

Those who came to my Design Build Growth Summit told me this event gave them an extra boost of motivation and superb direction in order to end the season with a bang.

The average attendee left with 50-70 specific ideas. Here are just 10 strategies they learned including a few I learned.

1. Optimism is an infectious drug – Some days can be very upsetting if you focus on the things you are not doing well. Don’t dwell on the negative. Life is tough enough already. Lift up your team up and yourself by taking a “silver lining” to the challenges that come along.

2. Don’t wait too long for success. You either have the right team, or you don’t. Jason Cromley from Hidden Creek showed us that he almost trippled the size of his company while having to replace almost his entire team. Unfortunate, and stressful, but the new team prevailed and kicked serious butt.

3. Define your lane, and stay there. Jason and co-owner Matt Seiler shared with me personally over dinner how their company jumped forward when they better defined roles and got out of each other’s lane.
Personally I am consulting with two companies this week (at my new office in New Orleans) that have similar issues. Both companies will pop up like styrofoam under water, once we straighten this out!

4. Ignore conventional wisdom. Just because it sounds logical, doesn’t mean it’s the smartest way to go. Brandon Lair (client, and speaker at my event) shared how his install foremen direct the schedule and run the scheduling meeting. This may sound inefficient due to the extra steps it requires, but their entire company has screamed to the top of the charts in profitability and morale with this strategy.

5. Belief in your own ideas. Jason and Matt built their brand new facility for clients to come visit – counter to advice from smart people who told them to ‘save your money for equipment, people and acquisitions’. It paid off tremendously.

6. Gamify Your Business – Common feedback I heard from attendees is “we haven’t discussed score in a long time with the team and I think it’s weighing on them, sapping their motivation” and “We need to get better at talking about what a win is in our company and celebrate that more intentionally.”

7. We all make mistakes – learn and move on. Kevin McHale pointed out some big blunders he made over the years and what he learned.
Heck, it was even pointed out to me that I made a few mistakes during my presentation (my handout did not match my power point which did not match the order of one of my talking points.) Stay in the moment and bring the best you have, and you can still rock the day!

8. Be the Best, not the biggest. Even McHale Design and Hidden Creek, which are among the biggest, are driven by being the best. It’s ironic, because if you aim to be the biggest, you can easily fail. Being the best wins out every day.

9. If Confidence is High—Profit margins rise with it. Price the job according to amount of time estimated to complete the job, not according to what you perceive is the market. Don’t fall into that trap. Then add the profit you need to earn. My Pricing Paradox states that the smaller the job, the larger the profit margin you can attach, as high as 35%.

10. Cultivate partners to help you grow. The top presenters had relationships with multiple partners, including Interior Designers, Decorators, Pool Contractors, and Builders. Their opportunities are diversified. How about yours?

Finally a couple quotes to get your juices flowing.

“1st impressions + lasting results = Clients for life”

“We are a Home Improvement company”

“Growth means constant change”

“Exceed Expectations on Communication at every step of the process”

“Improve the speed of your delivery, from design to sales”

Accepting Applications In The Leader’s Edge peer group

We are accepting applications in our peer groups for success-minded landscape and irrigation business owners.

Our Leader’s Edge peer group is specifically designed to accelerate your profits, business growth, value of your business, and professional discretionary time. It will change your life.

We have a special February offer, save $1,000 off membership. Since I am sending out this email later in February than I wanted, I will extend the offer through the first week of March.

Typical Results of Our Members

  • Profit Improvement from -3 to +15% within 2 years.
  • Revenues doubled in two years.
  • Personal income tripled in 18 months.
  • Grew the value of the business by 300%.
  • Greatly freed up mental time and energy to apply to new endeavors.
  • Improved health and reduced stress of day-to-day running of the business.
  • Increased owner’s vacation from 1 week to 7 weeks, within 3 years of joining.

Life is Short, Why Go it Alone?

Would you enjoy the camaraderie, support and collective smarts of a small group of achievement-minded contractors? If so, then our program might be for you. Reach out to me and let’s start a conversation to see if you are a good fit.

What others are saying:

“Wish we worked with Jeffrey 10 yeas ago, glad we pulled the trigger and did it now!”
Paul Reder, CEO Reder Landscaping, Michigan

“Jeffrey challenges me to do better, and doesn’t settle for less than excellence.”
Paul Fraynd, CEO Sun Valley Landscaping, Nebraska

11 Proven Ways to Develop Leaders.

We just finished another extremely successful series of webinars with many lessons and take aways. Last week’s webinar we focussed on Developing Leaders including Division Center Leaders.

Here are the most salient points, thanks to the speakers, my friends Shawn Edwards, Mike Bogan and Jason Craven.

  • Use peer groups. Create peer groups internally (if your firm is big enough), or join one externally Also, our speakers said that any size company can act as its own peer group, by creating accountability and open communication among all divisions. (See below under Learning Opportunity, save $1,000 when you join my Leader’s Edge peer group this February.)
  • Learners earn more. It sounds cliche, but all 3 companies focused on reading books as a group and constantly pushing their knowledge of their people forward. (This is why we read so many books in my peer groups! Learners are earners!)
  • Open-learning environment. Leaders need to be able to freely own up to their own mistakes without punishment, so they can learn from them and learn best practices from others.
  • Clear company culture. By getting super clear on your culture, you are super clear on the type of person that will fit in and succeed. Can you recite the values you are looking for in your next hire?
  • Hire talent. Look outside the industry if need be, and hire the best, especially for critical leadership positions where industry hires may be limited. Use profiling tools to help you hire the best.
  • Employ mentors. Because mentoring is key to growing new hires; someone other than the boss of the new hire. All the companies had a structures process for mentoring new hires. (Do you?) They had an intentional path that all new hires took.
  • Clear systems. Leaders succeed when the processes are clear and well known. Who creates them? Let any employee improve on or help create your systems. Hold everyone to the same system, and your leaders will thrive.
  • Clear metrics. One speaker, ironically with the largest company, had just 4 simply success metrics: Ability to grow, Client Retention, Safety and Profitability.
  • Give ownership. Two of the 3 companies give actual ownership, all 3 make their employees feel like owners. This is your company, not ‘mine’!
  • Employ outside resources. They all use plenty of resources for developing leaders: books, courses, Ted talks, Fred Pryor, Dale Carnegie, Sandler, Stephen Covey, Sean Covey, etc.
  • Set up to succeed. A branch leader should be able to know all his/her employees and clients. Give each manager no more and no less than they can handle.

I would like to thank all panelists for making this Contractor Conversation Series a great learning experience, for me as well as my audience. And thank you to GREENIUS for sponsoring, as well as LMN and LM Magazine.

Take action: Share this list with your leadership team, and get feedback from them. Have them rate you on how well you do these 11 tips.

What, Are you Crazy?

Are your employees calling you crazy? If not, then something is wrong.

As a bold leader in today’s market, you always want to be pushing the envelope on developing some new part of your business; be it a new software, a new price point, a new efficiency goal, a new standard of customer servicer, a new market, etc.

You get the point.

Granted, some companies take a year to digest changes from the previous years, but bold leaders don’t let their organization or themselves get comfortable. You can’t afford to be complacent.

Andy Grove (ex-CEO of Intel) said it best, 20 years ago in his seminal book “Only the Paranoid Survive.” He learned that when you are successful, everyone wants a chuck out of your business, until competition heats up so much that you have to change your business model. And if you don’t change, the market will eventually shift and force you to change.

He noted that “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”

A Mardi Gras example. I spent a couple days with a crazy group of Irrigation Leaders down in New Orleans. We enjoyed the parades of Mardi Gras and we challenged each other with ideas on how to grow smarter and stronger. One of the members explained how he priced out his services and the lucrative rates he is earning using upfront pricing. He caught everyone’s attention with his novel approach to expansion as well. He was crazy like a fox, and everyone was inspired.

As leaders we need to constantly find new ways to inspire our people and ourselves, in order to evolve, learn and grow.

Jeffrey’s Breakthrough Idea. If your employees are not saying (or at least thinking) “What, are you crazy?” then you are moving too slow in the development of your business.

Take Action and save $1,000: If you are feeling alone and stuck in a bubble, then take advantage of my February Discount: Save $1,000 (valid till end of February) when you join my Leader’s Edge peer group for achievement minded landscape and irrigation business owners. Email me now for information on how to get started.


DINNER AT TOMMY’S IN THE WAREHOUSE DISTRICT OF NEW ORLEANS.

Lead Like A Race Car Driver

Last weekend I took my Audi A6 on the track for the first time, at Palmer Motorsports Park, and learned an important lesson in leadership.

I asked the instructor to grab my key and get in the drivers seat and show me the track. He drove my car hard and fast on the heels of the other experienced drivers. This track is very windy and I was shocked at what he was able to do with my car. The track has a few turns that pitch down and out, and my car stayed glued to the road.

We then traded places, I was back in the driver’s seat, and he was giving calm direction and feedback after incorrect maneuvers on my part.

I got my car up to 100 mph on the curved straightaway (see photos below); I could have gone faster but didn’t want to smoke my brakes.

This curvy, hilly track was challenging for a first timer — just like a new employee in your company.
I went through the three stages of driver addiction: trepidation, fear, and obsession.  While it was scary to sit in the passenger seat when my instructor flew around the track, I realized that it was even scarier for him to sit in the passenger seat while I screamed around the track. That is how it is to be a leader: take chances on new talent and let them show you what they can do.

Jeffrey’s Breakthrough Idea: Be the instructor, not a micro manager, when you hop in the driver’s seat and show your people ‘how things are done’, and ‘what is possible.’ Then when you give them back the wheel, give calm feedback that is not overwhelming, and leave them excited to try again.

Take Action: Think back to what gave you joy as a youngster and bring that back into your life as an adult. For me it was fixing up my BMW 1600 and driving it fast. What was it for you? Are you leading a joyful life?

IN THIS AUDI R8, I HAD A GOOFY SMILE, UNTIL WE HIT 140 MPH!
 

Fourteen Strategies to Drive Profit By Finishing The Year Strong

Your performance in this final quarter of the year will have a oversized impact on how much net profit your company earns.

Weekly Throughput: The main driver of net profit in the fourth quarter is measured by your company’s Weekly Throughput i.e. the amount of billable production work your company can produce (“put through”) each week.

Here is why this is so important: Even though you estimate for net profit with each and every sale, starting with your first sale in January, the fact is that all the profit from those sales goes towards covering your overhead (OH), until all your overhead is paid for. Once your overhead is covered, you have reached what accountants call your break even date.

Once you hit your break even date – all the profit you then make from every sale goes straight to your bottom line. Not only the net profit, but also the operational profit (that previously went to pay for overhead) now goes straight to the bottom line. This date is generally hit right before or in the 4th quarter, i.e. now or next month.

Operational Margin: My high performing clients are able to achieve an Operational Profit Margin in the upper 30%’s up to 45% depending on the type of business they are in (and how long they have been working with me.) If your operational margin is, for example, 40%, then after you hit break even, every dollar that gets produced will put approximately 40 cents towards your bottom line! That is a lot!

To this end, the more sales that your team can produce and bill in this final quarter (called: Weekly Throughput), the more net profit you will ultimately earn. Conversely, if you have too many hiccups this fall, you put your net profit at risk.

Here are 14 ways to increase your Weekly Throughput.

1. Keep salespeople motivated to continue selling strong up through December. Use situational and year-end incentives to keep up the selling momentum. Having an increased backlog puts positive pressure on the crews, so they have more than enough work to chew through.
2. Decrease the non billable time (morning, travel, deli and gas stops, evening) so more time is spent on billable work.
3. Decrease (eliminate) the unnecessary go-backs needed to complete a job by ensuring crews are properly equipped and dispatched, with trucks and tools operating smoothly.
4. Ask crews to be flexible in bad weather, so you can hit your Weekly Throughput goals.
5. Use overtime (OT) to get your extra backlogged work done; the incremental cost of OT will be more than offset by additional operational profit that will drop straight to your bottom line. Do the math!
6. Sell more fall and winter add-on services. Remember, enhancement sales can be sold at a higher margin than your standard work anyhow, so it is a double win.
7. Take lower margin install work if you can be guaranteed that doing it will not displace other high margin work.
8. Walk every maintenance property and sell them (e.g. pruning) services to be done asap.
9. Find extra work that can be performed by crews already on maintenance properties.
10. Sell holiday decor now to be done this fall. For example, how about selling front door arrangements like you see in the magazine Southern Living?
11. Sell fireplaces and hardscapes to be done now (and during the milder winter.)
12. Raise your 2017 hourly rate right now in 2016, and apply it to your fall work. Who says you have to wait till January to raise rates?
13. Deliver your holiday presents to clients early; and they will likely give you more work to take care of.
14. Incentivize your crews to increase their Weekly Throughput. Make crews accountable for their weekly production goals, and motivate them to be as efficient as possible. Share the winnings when they sprint through the finish line.

Connect the dots:
Many employees may not immediately grasp how sprinting through the finish, and ensuring a healthy net profit, will benefit them and their family. Take the time to explain it to them by connecting the dots on how it benefits the company and how it benefits them directly. Using an incentive plan helps see directly how it benefits them.

BREAKTHROUGH IDEA
Speeding up in the fourth quarter and sprinting through the finish line will greatly impact and increase your net profits.

TAKE ACTION
Pull everyone together and explain to them which day in your calendar you hit break even, and how the production during the 4th quarter will help the company hit and beat it’s year end profit goals, thus benefiting everyone.

The Four Myths of Incentives

Incentives—rewards meant to encourage and motivate employees to be more productive—all too often backfire and create unintended consequences: internal squabbles, cynicism, distraction, and diminished performance. The trick with incentives is avoiding the pitfalls and common myths.

Following are the four most common myths regarding incentives:

MYTH 1: Incentives should be focused only on what a person can control.

While this makes sense on face value, it ignores a huge factor in motivation: peer pressure. Many managers and contractors think that a person needs to have full and complete control in order for an incentive to be effective, but this just isn’t the case. You can create a very quick and dramatic improvement in your company with the use of a peer-based incentive program.

For example, an entire division or company can share in a bonus (e.g., when everyone comes to work on time all week, the entire company gets free coffee and donuts the following week.) Think about the corporate world where stock options are awarded to employees as incentives, and yet the entire company has to perform in order for the stock value to rise. Peer-based incentives can be used to create change in many different areas: reducing equipment loss and vehicle damage, improving client retention, etc.

MYTH 2: An incentive should be holistic.

Some business owners try to wrap up all the critical success factors into an incentive, but this can be confusing to track and can send mixed signals to the incentive recipient.

For example, I recently worked with a contractor who thought up a comprehensive incentive for his office staff. It was very artful in engaging his office manager and addressing all the key aspects of her job, except that it was too complex; it covered too many facets of her job and made it hard to prioritize what was important. Incentives should be straightforward, easy to memorize, and easy to calculate. If your incentive recipient cannot wake up in the morning, remember his or her incentive, it is probably too complex.

MYTH 3: Incentives will create a change in behavior.

Unfortunately, managers often put incentives in place expecting them to be a silver bullet and magically fix all that ails their companies. The important truth is, an incentive is merely a mechanism for how you measure the change, i.e.  the improvement. But, in order to motivate the change, you need to give employees consistent feedback, and engage them in discussions on how the company is performing as compared to goals. Your employees need to understand why the change is important. Throwing money at them is not a replacement for explaining why it is important to hit the goal. Incentives will not automatically create accountability.

MYTH 4: Incentives must pay out monetary rewards in order for employees to buy in.

This myth further states that monetary rewards should be significant in order for employees to really care. Neither is true. I have seen incentives programs with no money at all attached to them work wonders.

Take, for example, a company with four crews, and imagine that these crews compete against each other each week to see who can finish the week most efficiently under budget. Each crew is rated on how well it performs compared to its budgeted time. The results are shared in percentages; for example, 100 percent means they met budget, 90 percent means they beat budget by 10 percent, and 105 percent means they were over budget by 5 percent. Whichever crew ends the week with the lowest percentage, wins.

In fact, when a company is setting up a monetary-based incentive program for the first time, it may make sense to do a dry run and execute it with no money attached. This will allow you to work the bugs out of the system, and then later, if you wish, to add a monetary reward.

If you do create an incentive based on money, it should be self-funding. The incentive should be paid out based on incremental profits earned by the company based on the incremental results achieved. When incentives are self-funding, everyone wins.

 

12 Opportunities to Improve Your Leadership

___1. SHARE YOUR VISION – Share your vision of the company: what you want the company to look like in 3 years +/-. Keep it simple with a couple of sentences or bullet points. End your vision statement with the benefits: WIIFE & C (What’s in it for employees & customers). Employees will LOVE hearing your vision and how it will benefit them. Repeat this in every meeting and put it up visually for all to see.

___2. HELP EMPLOYEES SET GOALS – Meet your employees biannually, monthly for key employees, and help them set goals that will grow their careers and help meet the company vision. Help them balance short- and long-term goals. Show them how to set SMART goals, and help them develop how-to plans. Hold them accountable. If you don’t teach this to them, who will?

___3. BE ACCESSIBLE – Give employees time to talk to you, even if they don’t report directly to you. Have work time where they see you, the leader, inspecting their work, and downtime where they can chat with you.

___4. SHARE THE NUMBERS – Hold your employees accountable to meeting the financial benchmarks of their crew and division. Share the goals with them and give them regular feedback on results. Information is empowering; success is intoxicating.

___5. CORRECT IN PRIVATE – When you give corrective feedback or get mad, do it in private or at least not in front of others. They will respect you for this.

___6. SHOW APPRECIATION – Paying your employees and giving them a job is no longer seen as appreciation. You have to say thanks, use their name (very powerful!) and give a specific attaboy. Show group appreciation too, verbally and with group events. BBQ anyone?

___7. ASK THEM WHAT THEY NEED FROM YOU – Ask them what they need from you especially if they are a direct report. If they report to someone under you, be careful not to undermine their direct supervisor, in which case, ask them what they need from the company.

___8. TAKE NOTES. If they give you suggestions, let them see you write it down. Close the loop with them: Let them know if and how you used their suggestion, or if you decided not to and why. Take small groups of employees to breakfast, and ask them how the company can add more value to clients. Take notes. Repeat and rinse.

___9. CUT WOOD, CARRY WATER. If you ask them to cut wood and carry water, let them see you do that too. It doesn’t have to be all the time, but once or twice, especially if it is awful work. If you want them to follow company ‘values’ and safety guidelines, you need to be seen following them as well.

___10. RAISE EXPECTATIONS. Leadership means showing your employees what is humanly possible – even personally, e.g., by giving them books to read and urging them to raise their game. Help them set short- and long-term personal goals, when you meet with them on business goal planning.

___11. GET PERSONAL. Since employees spend most of their waking adult life at work, be available to discuss personal issues if they need help or are feeling stuck personally. I do not mean you should become their friend – you should not. Simply be accessible and compassionate, without being nosy or pushy.

___12. TREAT EVERYONE DIFFERENTLY. This one is not easy, but it is the most important leadership point. Everyone wants to be treated special, i.e., acknowledged for their own strengths, needs, quirks and talents. Don’t rubber stamp how you handle each employee, find out what makes them tick.

RATE YOURSELF.

How do you score 0-3 on each of these?

0 = Not doing

1 = Needs improving

2 = Is in place or improving

3 = Doing consistently well.

What are the top 2 areas you want to improve in the next 6 weeks?

 

_______________________ & _______________________

Competing With the BIG BOYS

If you are trying to compete with the Big Boys, you need to be aware of how the larger commercial management firms operate. They have a sophisticated approach to decision making (it is different from an owner operator of a strip mall).  You need to find out:

  • At what level the enhancement jobs go out to bid
  • At what level the property manager can make their own decision without it being kicked up the to VP
  • How Cap Ex is handled differently from other small projects
  • The fact that they have different management/restoration strategies for their different properties

Going in your favor, you should be able to compete against the Big Boys by your:

  • High level of proactive communication with your clients
  • Providing consistency across properties…same account manager oversight, same level of detail.
  • Consistent labor pool, with less turnover, bringing a consistent level of quality
  • Ease of doing business that The Big Boys are not able to give, e.g. one phone call does it all…across their many properties.
  • Speed of turning around requests – if you are smaller you are also more nimble – use that to your advantage.

On the other hand, try to be proactive when you sense you will get behind schedule.

The Big Boys may be able to gear up more quickly after a late winter, for example. You need to get in front of that problem, by starting the communication earlier in the season.

Having said all that, don’t be overly concerned about bringing on new Account Manager’s to take your (the owners) place. Your larger clients will understand and even value that, if you have a back up plan with competent people on their account supporting you and them.

Are you stale? Realize that the “key” to why large clients change out contractors from time to time; it happens when you get “stale” and their property gets stale.

So let me ask you two sets of questions…

  1. Have you gotten stale on how you take care of your clients? Do you take them for granted? Do you take the same approach every year, just because “it’s working”? If you do, then you are in trouble though you may not even know it yet. You are about to lose work to someone else…not because they are better, but because they might be better.
  2. Do you have a systematic way of reinvigorating your perspective, your service and your client’s perception of the value you bring? Do you wait for your clients to make requests, or are you proactive on how you increase your value to your clients? If you do, then you are much more likely to retain your clients, earn new business and earn their referrals.

Which camp are you in?