Earlier this year, I teamed up with LM Editorial Director Seth Jones to co-host a webinar featuring representatives from high-performing, high-revenue landscape companies.
We deemed these companies “high performers” because they achieved an operating profit margin over 10 percent in The Herring Group’s 10th-annual Landscape Industry Benchmark Report. We use operating profit margin as a key measure of success in a landscape company because it is a single statistic that measures customer satisfaction, management effectiveness and operation efficiency.
The panelists included:
- Allen Sweeney, APHIX, Frankfort, Ky.
- Daniel Currin, Greenscape, Holly Springs, N.C.
- Stefan Banks, American Landscaping Partners, Brentwood, Tenn.
We learned that our three panelists have quite different origin stories, but their businesses have much in common: strong leadership and planning, a focus on people and diligent execution.
Strong leadership and planning
These panelists proved that strong leaders with a comprehensive plan are the first thing you need for a high-performing landscape company.
Our speakers showed that strong leaders come in many forms. Sweeney founded his business as a teenager trying to earn money for a dirt bike. Currin is a second-generation leader who took the helm during the Great Recession.
Banks was in the US Army Special Forces before entering the business world as an operator and an investment banker. He saw the opportunity to acquire landscape companies because of the industry’s strong fundamentals.
They have taken different paths to their leadership positions, but they all understand it is their duty to lay out a vision and a roadmap for their firms’ success.
Greenscape exemplifies a company with a well-articulated plan. Currently north of $26 million and No. 123 on the 2024 LM150 list, the company’s goal is to be a $100 million company with 15 branches in 10 years. They would like to be 75 percent maintenance and 25 percent construction, and they would like to self-fund their growth.
Much of Greenscape’s growth has been organic, but they have also made several acquisitions. Currin has a warning for companies wanting to do acquisitions, “It is impossible to be successful in the acquisition game if you have low profit margins. One of the things that drove us to improve profit margins was that higher profit margins provide the cash to service more debt.”
People-focused
These three high-performing firms all have a people-first mentality.
“Growth is not just for the sake of growth,” Sweeney said. “Growth creates opportunity.”
One significant part of the opportunity at APHIX is for employees to be promoted.
Another part of that opportunity comes from the ability to create incentive compensation plans that align with the company’s goals. For example, APHIX’s sales commissions align not only with revenue but also with profitability. Branch manager compensation is also tied to operating profit.
“In a growth-minded company, people are aligned and realizing that we are growing together,” Sweeney said. “This is a team environment and we’re going to win together.”
APHIX, which received private equity investment in 2022, has approximately $26 million in annual revenue and is No. 120 on the 2024 LM150 list.
Diligent execution
Hand in hand with people is execution. As Banks said, “At the end of the day, we are a people business, right? And to be a great people business, you must be a great training business.”
He emphasizes that training does not have to be expensive or complicated. American Landscaping Partners, which comprises seven firms with approximately $80 million in annual revenue, has a list of daily disciplines for every role in the organization. Those tasks — things like what to wear or how often to check the oil — are reinforced in morning huddles.
“Training is a breeding ground for leadership and for high-functioning people; it also attracts talent,” Banks said. “A lot of our business is pretty simple. We are not sending people to the moon. We are in the landscaping industry, and so it is about reinforcing basic stuff.”
Finally, as you consider becoming or continuing as a high-performing company, here are some questions to ponder.
- How do you evaluate your company in these three areas?
- In these areas, the goal is continual progress and improvement. How is your company’s progress?
- What are your plans in these areas for the next 12 months?
