Interview on how to Build a $15 million Commercial Lawn Mowing company

[laughter] Today's show is a little different. Who we have on today is Ryan Fudray. He's the owner, one of the owners of Prescription Landscaping. What you're going to find today is a ton of information. We go into details. We go into pricing. We go into structures for lawn maintenance. So, we go into if you're a budding entrepreneur, you're trying to get into landscaping, you're trying to get started, and you want to grow a lawn company from one guy in a lawnmower. Ryan's organization, Prescription Landscaping, runs over 40 crews. They have over 60 trucks out there, so I think they are even bigger than 40 crews. They they service over 400 commercial properties. And he tells you today where to go to find those commercial properties. He gives you the chart on how to bid those jobs. He breaks it down to how much you should be able to accomplish in an hour and then how much that should translate into a price. He goes over actual realtime numbers. This is the program that if you're not into landscaping, if you're not trying to start a lawn maintenance company, but you know somebody that is, have them tune in to this show. This is everything they need to know to get started to open the doors to figure out how to price it as well as where to go. How do you get in front of these property managers? How do you reach them to even be able to put a number in front of them? And then how does that translate into profit or loss? Ryan talks about the fact that sometimes people in property and accounts are not a fit for his company and he's willing to walk away from them. It it's obviously a formula for success that's worked with them. He's been with Prescription for over 12 years. Prescription has been in business for 35 years, but he has doubled or tripled since he's been there the size of the company. He talks about his goals every year, how they focus on growing. And then he also talks about niching in and he doesn't use those words, but you can tell during the program he talks about what he sees as the strongest components of his business and how that's worked for him. When you get a person that's willing to share all this information, it's going to be one of those podcasts that you're going to want to listen to one time through and then you're probably going to want to relisten to with a pen and paper and sit down and take notes because this is the ABCs. This is the formula that's led to success. And hopefully you can apply what they've done to your own company to have even better results than you could ever experience trying to figure it out on your own. So sit down, stay tuned, and here we go. [music] All right. Well, today we have Ryan Food. Did I even say that right, Ryan? Yes, you did. Food ray. Perfect. With prescription landscaping. And I want to tell you a little bit about this company before we get too much into it. Prescription Landscaping is what I'm going to say is probably arguably one of the largest lawn maintenance, commercial property maintenance companies in the state of Minnesota. Now, some other people are going to go, "Oh, we do the same thing. We're bigger. Oh, we do something a little different. But I I don't care how you look at it. What I really want to boil down to is Ryan with Prescription Landscaping has built this company up and they now run over 40 crews doing lawn maintenance, property maintenance, and they have around 400 properties that they service. Are those the right numbers, Ryan? Am I pretty close with that? Yeah, you're pretty close with that. Awesome. One thing that we're going to be talking about today is what it took to get this company from one guy with a lawn mower to 40 crews and over 400 properties. Are you willing to share that story with us, Ryan? Yes, I am. Awesome. That is huge cuz a lot of people out there, a lot of the contractors, landscapers, they're either strapping on the tool belt, they're putting their boots on, they're just going to work for themselves, they're a craftsman, or if they're hoping to get into landscaping, they look at lawn maintenance as their doorway in. And it is one of the most competitive industries in landscaping that you're going to face. Basically, anybody that can go down to Menard's and buy a lawnmower or throw it in the back of their pickup truck is now your competition. So, to be able to master that, to be able to take it further than anyone else takes a a unique set of skills, years of experience, and if you're willing to share that with us, that's going to help us all learn from you. So, can you tell us a little bit about where you got started, Ryan? Well, I I personally was uh graduating college working for my cousin who had an irrigation company and uh prescription landscape approached them and purchased them. I was about to move into the financial world. I graduated that fall and uh they approached me on uh potentially staying on and uh kind of overseeing their irrigation division and that's where it all started and hopefully they believe I'd grown and I feel I've grown and uh to this day I I have now purchased out one of the part the original partners and uh we're moving forward feeling good about our future. So Ryan when you you got it you bought into so you didn't actually develop prescription from the ground up but you bought into it about 12 years ago right? Correct. Okay. So, where was the company when you bought into it 12 years ago? You know, I believe we were just over about a $3 million business. Um, I couldn't tell you on the number of trucks or anything like that, but my guess is we probably had 10 to 20 trucks and uh we now have over 60. Um, we're just north of about uh we're we're between 10 and 15 million depending on the winter. Obviously, the weather uh pushes sales up on some years and a year like this year it pushes it down a little bit. So, do you would you consider that you actually have more people during the winter than you do during the summer? Um, I I can't say that. Well, here's what I will say is we do use uh we do use some temps and we do bring on some extremely part-time employees during the snow event. So, at times, yes, we're larger. We probably get up close to uh 300 people out there and we use some contractors as well. However, you know, the most check runs that we have internally is typically in the summer and that's typically around 150 employees. Okay, that's uh that's a huge number and that helps us to kind of get an idea of where you're at with your company. Tell us about how what did you do to take it from 10 to 20 trucks to 60 trucks. Can you take us through that journey? Well, our goal is always to grow at about a 10% clip a year. Some years we go a little bit higher, some years we're a little bit lower. Um we've made a lot of mistakes on the way. We've we've given away a lot of work. We probably overcharged for some work. Um, I would say early on we were we uh our pricing, you know, it comes down to your pricing. Your pricing might be different than my pricing, but you got to make money and I got to make money. So, I don't think that's a big deal. You got to decide what you want to what your pricing is going to be and then you got to go after a certain market. At times, we went after anything and everything. As of today, we're more focused than we've ever been in my opinion. What is what's your focus today? You know, we're from we're focused on class A type properties that are uh commercial that really want to buy everything from us. You know, our lawnmowing is about 20% of our business in most cases after you add on snow and enhancements and and landscaping and irrigation and fertilizer. So, we want that customer that's going to buy all those items. And we want the customer that's going to turn over and they're going to buy annuals, they're going to buy mulch, uh they're going to buy winter color, they're going to do the upgrades and and buy the extras. So that is kind of the key component that's helped you to grow is you've honed in on which accounts you want, right? And then you've developed long lasting relationships with those accounts. How did you find them in the first place? How did you get in front of those accounts? Well, our process is uh we have we currently have two sales rep that do nothing but sell new customers. Once they sell a new customer, they hand it off to an account manager. We have six account managers that handle all the day-to-day activity so those new guys can continue to go after new um an accessible new uh new sales rep would probably bring in about two GM crews a year. You know, depending on what size that could be anywhere from two to $300,000 in revenues just on that ground side of things, which I kind of shared with you before, we're probably bringing in an additional uh 1.5 of that in in extras in irrigation, fertilizer, and uh enhancements. So right there alone could easily bring in $600 to $900,000 additional. So is there, you know, if once you build your company up and you get to that point where you have 150 people running, there's got to be processes that you put in place that work and ones that don't work. Which what what are you um what would you consider a process? Do you have like a process for the salespeople to find new accounts? Do you have a process for pricing? What are what do you use for those two key areas that would help any new guy starting out that's going, "God, I don't I'd love to grow, but I don't know how to do it." Well, what I'm pitching right now, which I I can't say that I always pitched. I mean, I'll be honest. We put out a lot of uh we used to bid anything and everything. We used to really try to be on bid list. However, what we found is we just really weren't that profitable with those things. We grew, but we weren't really growing our bottom line as well. You know, that was a sacrifice we made. So nowadays, what we're really pushing is qualify, qualify, qualify. Can't say yes to everything and we want to build relationships. So if that customer, if you're just a bid, if you're just a number, there's not a relationship there. If that customer is not that allow you to gather information and talk to them, well, they're just looking for a number anyway. So on the sales side of things, it's strictly qualify, qualify, qualify, and we just do we go by square footage. Obviously, we have a difficulty scale to uh for our pricing. So it's the pricing is the easy part. It's building a relationship is difficult. So you've you've already set up a system for the pricing. Then you've you've figured out how you're going to do it. It's the same for each and every project. It goes by a difficulty scale and you have it broken down. What are some average numbers you look at and do you rate it like on a scale of 1 to 10 and then one the super easy ones or how do you guys do it? You know our our difficulty [clears throat] scale is easy, moderate or difficult. You know on the mowing world you got wide open turf it would be easy. Um, if it's all chopped up and and extremely small, like uh, let's say like a small industrial mall or something that's mainly parking lot, that's pretty chopped up. You're going to have to do a lot of turns. What size equipment are you going to be able to get in there? If it's mainly pushers and walkbehinds, it's going to take a little longer. Or if it's wide open and you can use a nice 72in ETR, you can mow a lot of turf with that bad boy. And you say you break it down on a price per square foot. Now, I've heard numbers all over the board. I hear you got to break it down on an hourly basis. Some people are very firm with they got to bu it down on a price per square foot is do you guys use a square foot price and what is that? Well, obviously it ranges on uh the size of the property as well. So a 1 acre property, you know, we're probably anywhere from about a 10,000 square feet an hour to 15,000 ft² where on a on a 1 to 3 acre property, we're more like 15,000 square ft to almost 20 if it's extremely easy. And it kind of goes it kind of goes up from there. And that's per man, Ryan. Is that basically how an hour? Correct. Okay. And so then you charge I've heard like five to 10 cents per square foot depending on the difficulty of the property. Is that kind of something that you guys use or do you use a different different formula? I've heard that number as well. I've never broke it down like that. Like I just say, hey, what's the total square footage? All right, let's divide by this number somewhere in that depending on the range I just kind of shared with you. 15 to 20,000 on a one to three three acre property and and we say okay how many manh hours is that going to be and then we have a specific manh hour rate that we go with okay and you know I I just broke down a bid for an association they they um we're looking at some stuff and basically what they what I'm finding is that a lot of contractors the smaller guys out there that are doing these things they don't even know what they're charging Ryan uh one property that specifically I do all their hardscaping. I don't do any of their maintenance for them, but I built up that level of trust with them, right? And so, you know, they sat down to go, "Hey, you know what? This is what we're doing. Just what's your thoughts on this?" And when I broke it down, the person that was doing their property maintenance, Ryan, was at a he had 144 hours worth of work in every single month, and he was charging $2,600 per month. When you break that down, that comes out to be $17 and some odd cents per hour. And I looked at them and I said, "This person doesn't realize what he's doing and this is an established company." I I would completely agree and that more than likely he's probably underpaying himself or he's really dependent on that one or two whale of a customer that is bringing a ton of revenue and and if that customer ever leaves him, he's going to be in trouble. What are you finding are the industry averages? I've heard everywhere from $28 an hour to $45 an hour to $68 an hour. And it depends on what you're using and how you're using it. Yeah. I would, you know, in the ground care world, in the commercial world, I would say it's probably about that $ 32 to $42 an hour is what I'm seeing. Okay. And so that's how you break your bids down is you go by how many square feet you have, how quick you're going to get it done, and you want to get between 32 and $42 an hour to complete it. Would that be a fair way of looking at it? Yes, that's pretty fair. So, how does that then apply towards your winter maintenance? How does So, do you do you take your accounts that are focused on summer maintenance, lawn maintenance? How do you actually apply those formulas to do the winter maintenance as well? Because we've covered it. You almost have more people in the winter time if you count your subs. The winner is almost identical. It's square footage. Um, if you use if you guys go to Simodol, they got some great stuff out there. They'll tell you exactly what the production rates are. They've done a lot of studies. They have a difficulty scale, easy, moderate, difficult as well, about 30 to 43,000 square feet per hour. Now, depending what size equipment you have. So, that that's your basic plow blade, probably an 8-footer. So, winter is the same, but the key for us in the winter is what does the customer really want and what can you produce with your equipment and and any subcontractors you use. Winter is really sensitive for a lot of customers and it can make or break a lot of relationships. That's that's an understatement, Ryan. When it when it boils right down to wintertime, I mean, I I do uh I do a lot of snow removal. And I know that you've got to be there. If it's snowing at midnight, you've got to be there at midnight. And a lot of the guys that are coming into this, they understand that. You know what we find in the snow, there's a lot of people that want to work really hard. It's it's try to work smarter, not harder. and uh listen listen listen listen listen listen to your customer and if if they're not going to give you that information you got to you got to ask questions until you get the answers you want to make sure that you are comfortable with their needs and wants so if we were going to summarize a little bit about what we just talked about just to give those new guys out there that are trying to get into the industry they're trying to learn how to build a company up they're taking it from an old dog and I don't mean old like you're an old geyser I mean you're an experienced person in the field so we're going to take it from a couple old dogs that have done this for a while. And what you're saying is that you look at every every property. It's not you don't lick your thumb, stick it up, squint your eye, and go, "Okay, it's about this." You actually break it down to how many square feet do you have? How many square feet can you accomplish in an hour depending upon how difficult that property is, this is the rate you want to achieve for that for this is for summer maintenance. What about those one-time events where we're doing spring cleanup or you're doing a fall cleanup or something like that? For us, our spring and fall is just a multiplier of uh what it takes to mow and then also we add what it takes to weed the property. And you know, we multiply it anywhere from three to five times. So, substituted the mow is the mow is a three-hour mow and then uh the additional hour to to weed that property and it's it's not overly wooded. I would say it's a pretty standard maybe a 20-y old property. Let's just say it's three times that. So, it' be three times four, which would be 12 man hours is what we're expecting. We let our crews know, hey, we got about 12 hours to do this. Can we get it done? We try to give them that bid out there and that target to hit. Are they perfect? No. However, we do have to come up with a number. So, do you cater your bids then to the companies where that those one-time events are automatically formulated into your monthly contract year round or do you have an upcharge for the October or November cleanup or whenever you do it and then the spring cleanup which what is it usually May? Correct. Okay. Is there an uptick in that one time event? April Mike, you know, in the residential market, I think there is. We don't do any residential, but in the commercial world, it it's predominantly you get a bid spec, you have to bid it out. Some customers ask for three cleanups, some customers ask for one. You have to put that in there all together, and you spread it out over seven months. Is it typical in the Minnesota area? So, Brian, when you look at a property, how do you do you use how do you map it? How do you determine the square footage? Do you do it the oldfashioned way where you take out a wheel or do you use some software? We predominantly use Google Earth Pro. Obviously for the difficulty though I I make our sales guys go to the site. You have to get to the site. You got to get the feel. You cannot see topography from uh from Google Earth Pro. They also have to do some shrub counts. OB we have the same thing for shrub pruning. So many shrubs can be pruned an hour depending on their height. So they have to get there and do some of those things in order to put a a bid together. In the winter it gets a little hairy because we have some snow cover and not every customer asked for a bid back in July. So it it can be difficult at times but we have to do our due diligence. Okay. For sure. So then do you do your salespeople subtract out the hard surfaces such as the buildings when they use Google Earth Pro or do the or how do you account for that the obstructions and things like that? Yes, they do. I don't know if you've ever used Google Earth Pro but it's uh it's extremely easy to use. just connecting dots and you can kind of draw your own lines. So, pretty user friendly, you know. Do…