[00:00:01] Speaker A: Welcome to the Grow show brought to you by Mardi Grunder's Grow Group, where we specialize in helping landscaping companies clarify their platform, grow their people, build their processes, and realize profits. Everything we teach is grounded in real experience. Our team is actively involved in the day to day operations of Southwest Ohio's Grunder Landscaping Company. New episodes are released weekly on Wednesdays and are made possible by the support of Aspire, Bobyard and Exmark. Remember to subscribe so you never miss an episode. Now here's your host, Marty Grunder.
[00:00:30] Speaker B: Well, good morning, good afternoon, good evening, wherever the case may be. This is Marty Grunder from Grunder Landscaping Co. And the Grow Group. Thanks for downloading the Grow Show. Today we're going to talk about why companies have trouble growing beyond $2 million a year in sales. I've got a lot to share. Excited about this one, folks. But first a reminder. You can get the latest edition of the Grow show delivered to your phone, tablet or computer by subscribing wherever you get your podcasts or Watch us on YouTube for an enhanced list learning experience. The Grow show is the greatest thing since a family vacation. If I look a little tan or maybe red, it's because I just got back from 10 days with my entire family, all four of my kids and their significant others, my wife and my four grandkids. We enjoyed the beach, the pool, some golf, lots of food. Too much to be exact. A few cold beers and a glass of red wine one night with my steak that my son in law cooked. And I can't believe I'm saying that, that I drank a glass of wine. I sound so sophisticated, folks, but actually all I am is a sophisticated redneck shout out to my wife who was quite the host and drove all the way back from Florida by herself with our dog. And I flew on to Nebraska to work for the awesome folks at Exmark, which was a great experience. More on that in another episode. It was a great week. When is your vacation, ladies and gentlemen? What are you looking forward to? These trips help us buckle down and earn the money we need to do a trip.
[00:01:54] Speaker A: And.
[00:01:55] Speaker B: And yeah, they're a good thing. They sure help. They sure help mentally, folks. Now on to this week's edition of the Grow Show. Today I want to talk about something that I see all the time in the landscape profession, getting stuck.
You start a company, you hustle, you sell the work, you do the work you build the work, you collect for, the work, you solve the problems, you hire a few people and eventually you get the company to $2 million in revenue. And then something happens.
The things that got you to 2 million, they seemingly stop working. Or at least that's been my experience.
And that's what I want to talk about today. Because getting from 0 to 2 million is largely about hustle, folks. Getting beyond 2 million is about building a company. And those are two very different things we find in our ACE peer groups, and I have found in the over 200 landscaping companies that I've visited and worked with in the last 30 years that what gets you to 2 million is not what gets you to 3 million and beyond. So let's talk about that. Let's talk about the 2 million doll trap. Years ago, we used to call it the million dollar trap, but with inflation, it's the $2 million trap.
So when you're smaller, the owner can be that system.
You know every client, you know every job, you know who's doing what.
You probably sell most of the work yourself. You know where all the landmines are buried. If there's a problem and someone calls you, you know, you know what to do and you just go fix that. And that can work surprisingly well. The span of control is there and you can. You can make that work. And until, folks, it doesn't. At some point, there's too much critical mass. There's too many clients, too many jobs, too many team members, too many issues, too many decisions, just too much everything.
And then the owner becomes a bottleneck and things tend to not go so well. Then margin erodes, clients get frustrated. You get overwhelmed. You sometimes think like, what have I done? And I know this, folks. I've lived this at Grunder Landscaping Co. And to a large degree, I'm living it again. Right now, I'm in the middle of it. As we've grown, it's happens. It's not some strange disease, folks. It's quite common. There's just things out there that you don't know about that are lurking behind other doors that you run into and you gotta fix. There's no owner's manual. You can't plug into chat GPT and say, tell me where all the landmines are buried. As I try to grow my business from 2 to 5 million, it's going to give you some stuff, but it's not going to give you everything, all right? You've got to try to fix it on your own. And you got to create new and better ways to run the business. Because what works for us at $2 million here at Grunder Landscaping, it didn't Work for us at 5 million. And what worked for us at 5 million? One going to work at 10 million. And now as we go on the 18 million. What worked at 10 million isn't working at 18 million. Okay? It's just not.
Growth requires the company to change. You've got to be flexible and it requires you as the owner to change. And I think that's one of the biggest points today to make on the Grow Show. I think there's six areas when I've thought about this and put my thoughts together on how I could teach a good lesson here. I think there's six areas where companies commonly get stuck. The first one is your systems break.
The first thing that breaks usually in a company growing is systems. When you're smaller, the system might be go ask Marty or go ask Cliff. That's not really a system, folks. That's a person. And if that person isn't there or that person wants to take a vacation, or that person's on a two hour sales call, what do you do? Well, your guys just stand around while the meter clicks, right? As you grow, you've got to find repeatable ways to do things.
So how do we estimate?
How do we hand a job from sales to production? How do we schedule? How do we purchase materials? How do we get equipment fixed? How do we communicate with clients? How do we know whether the job made money? And how do we learn from our mistakes on these jobs that didn't make money?
At Grunder Landscaping Company, ladies and gentlemen, as we grew, we had to put more structure around all these things. And when I was thinking about how I could get this across to you, I think this is a good question to ask yourself on a daily basis as you analyze your company and where your weaknesses are and where you're lacking systems and what you need to do to grow is what happens in my company today because somebody remembers to do it. So again, the question to ask yourself what happens today in my company? Because somebody just remembers to do it.
That's probably something that needs a system because you can't just hope people remember things. What if that person's not there tomorrow? Then what do you do for us? Aspire, the wonderful industry specific software that we use, that's the best system we have and it naturally takes us through our work. So that's another way to look at it. And that's why it's smart to have something like Aspire or LMN that's helping you run your company.
AI, that's not a system, in my opinion. Okay. And I see an awful lot of people who think AI is just going to do everything for you. It's not.
You're foolish to not be trying to learn AI and to be using it in your business to save time. AI can help you in so many ways. It's incredible. But you. You. You looking at me Today on the YouTube version. You listening to me on the podcast version. You got to learn how to run the business.
At the end of the day, your success is about your leadership. And no AI or plugin is going to lead your company. Your people and all that. All right?
Your people are going to lead the company. Great hires, great team members. Okay, let's morph into the second thing I see that affects companies growing. Number two, you make the wrong hires. And I don't care how many people we have listening to the Grow show today. I've made more bad hires probably than all of you combined.
All right? Just mistakes I made and a mistake for you to avoid. I got busy and I thought, well, I just need to get somebody and I'll hire them. And I'm such a good trainer, and I'm so good at this. Like, I know that they've never done this before, but they can learn because I'm a great teacher. It didn't work. As you grow, you can't just fill positions. You got to put the right people in the right seats. And one of the biggest mistakes is promoting your best technical person into a management position simply because they're great at doing the work.
I see this a lot in sales. Companies take their landscaping. Companies take their best salesperson, and they make them the sales manager. All right? Your best crew leader isn't automatically going to be your best operations manager or your best group leader. Your best salesperson isn't automatically going to be your best sales manager. Leadership is a different skill. Just because the person has your same last name doesn't mean they're going to be able to lead like you do. It's another thing I see, ladies and gentlemen, I teach this all the time. You've probably heard me teach it. There's three reasons your people don't do what you want need them to do.
Number one, they haven't been properly trained or equipped. And you always have to look at that. When something happens and you don't like what was done, you got to say to yourself, what did I do or not do? That got me these results. I didn't want. Did I properly train or equip them? If the answer is no, what are you doing. Go properly, train and equip them. Learn from this mistake. Make it better. Go forward. The second reason people don't do what you want, need them to do is a capacity issue. This is when you take your best salesperson and you make them a sales manager and you wonder, well, why didn't that work? Well, just because they were great at sales doesn't mean they're going to be great at sales management.
You take your right fielder, you put them at shortstop. At the end of the fourth inning, he's got five errors. Why? Because he's a right fielder. You're the dodo that put him at shortstop. The third reason people don't do what you want, need them to do is is they have a bad attitude. And the most dangerous of all people in organizations are smart people with a bad attitude.
So look through this. Take a little side. Take a pause, turn the podcast off right now. Write these three reasons down. You haven't properly trained and equipped them. They don't have the capacity to do the job, or they have a bad attitude. Which one is it? All right. Bad attitudes in many cases, in my opinion, are not able to be fixed. And you got to get them out of that organization.
A capacity issue. You might be able to teach them, but you got to watch with that. Some people aren't cut out to do that. I would be a lousy person to run a hardscaping crew and put in hardscapes. I'm okay on equipment, but that's not my thing. There's a lot of training and equipping we need to do. We need to analyze what somebody's capable of doing. We need to look at StrengthsFinder and some of the other wonderful tools out there and then get those bad attitudes out of your company.
I digress there for a moment because I want you to understand that hiring mistakes become much more expensive as you grow. And you have to have an analytical perspective on hiring. So slow down, define the role, get a job description. Define what success looks like. Ask yourself, a year from now, how will I know that Cliff was successful in this position?
And hire for where you're going, not just for the problem you have today. That's something else we do. You might just be putting a temporary stopgap on something. And that leads to number three in this discussion. But first, let's hear from one of the partners in our success at Grunder Landscaping.
[00:10:57] Speaker A: This is Emily Lindley with the Grow group. Come see Marty and I at our home base, Grunder Landscaping Co. In Dayton, Ohio. This year. We Host small groups for our GLC field trips to show how we operate a successful landscaping business and. And how you can, too. Sign
[email protected] before these events sell out.
[00:11:15] Speaker B: All right, here's the other problem that I see. The owner won't delegate. And this one is so hard. And I can relate because I used to be this way. It's especially difficult for the owners of landscaping companies because we tell ourselves it's faster if I just do it. I don't want to slow down. They won't do it. Right. I'll just do that. And you know what? You're probably right. It probably is faster if you did it today. It is. But what could you use that time that you're eating up there? And what are you sending them in terms of a message to your people that they're stupid, that they're not capable of doing anything, that you're the smartest person on the face of the earth and only you can do it. That's a Superman complex that generally doesn't go well with growing a business. And this is exactly how you get stuck. If every estimate, purchase, complaint, hiring decision, operational question, where's the keys to the gate at the Jones house? All that stuff. If that all comes back to you, you haven't built a company. You've built yourself a very stressful job. That's not in a company that is scalable. Delegation isn't dumping work on someone. I always say delegation is an abdication. Delegation is giving someone clear responsibilities, clear expectations. And here's the most important part. The authority to make the decisions.
The questions I want all of you owners to ask yourself is, what am I doing today that someone else should be doing six months from now? And understand this. Your best people truly want to do more. And sometimes you may not realize a quiet leader in your company, pay attention. Give them some projects. See what they can do with it. We have a leader here at our company, Brian. He's incredible. He's not someone that's going to go in a meeting and. And light up the room with all of his pithy comments. He just goes about himself in a quiet way and gets an incredible amount of work done. He's a leader in every way, shape, and form. You wouldn't know it if you didn't slow down enough to listen to him or if you didn't give him an opportunity like Seth here gave Brian to succeed. And he succeeded. So start there and see what you can learn about the capabilities of your team. Give them a simple project don't tell them. If you handle this well, you get promot. If you're going away for a week, ask them to cover for you. Give them a list, come back, see what they did. If they did a pretty good job, you might have something there, folks. You might have someone that can do more. You might be surprised.
Look, a great team and a great structure that wins. Let's move on and talk about structure. So the fourth point, your organizational structure has to change for you to grow, folks. Structure always follows strategy. The late, great management guru Peter Drucker said that at 2 million, everybody can wear three hats, okay? At 5 million, that starts to get confusing. Who really is responsible for sales? Who really is responsible for production? I've had a couple people telling me what to do. Who owns that customer relationship? Who's accountable for the numbers? As we grew Grunder Landscaping company, folks, we had to create clear roles and clear accountability. And every time we end up in trouble. It's where some of these lines blur.
And organizational charts, they're not just something big corporations have. A good organizational chart answers one very simple question. The accountability question. Who owns what?
If nobody knows who's responsible, eventually the owner becomes responsible, and it's overwhelming. And we're right back to where we started.
Structure always follows strategy. Write that down right now on a stick note and put it on your monitor, okay? And read it every day for a couple weeks.
Let's go on to step number five. Financial discipline becomes critical.
This might be the biggest one, folks. It's your scoreboard. It's your ultimate way you can see if you're doing well. Let's talk about it. But first, let's hear from another one of our trusted partners in our success at Grunder Landscaping Co.
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Okay, back to financial discipline.
You can't grow your way out of a bad financial management situation. I've learned this one firsthand. Revenue can make you feel successful. You can tout about what your sales are, but your margins are telling you a completely different story. At $2 million, an owner might get away with watching the bank account as you grow. That's not enough. You got to understand your gross Margins, your labor, your overhead, your equipment costs, your cash flow, your backlog, and ultimately your profitability.
Because sales are vanity. If there's no profit left at the end, folks, most revenue does not automatically mean a better company. Not every sale is equal. I've seen companies grow and become less profitable. I've experienced the challenge that comes with growth myself. Growth has to be disciplined. If you aren't good at finance, get some help. Get a board of advisors.
Stay dialed in on that. Get into one of our peer groups. Trust me on this one, folks. And now let's wrap this up with number six and come full circle. You have to develop leaders.
This really is the answer to all the other questions that you have. You can't scale yourself. You may be able to clone sheep or other things, I suppose, but you're not going to clone yourself. You're scaling leaders. At Grundier Landscaping company, the bigger we became, the more important leadership development became. Your managers have to learn how to make good decisions. You have to develop critical thinking skills in them. They have to understand how to handle crisis, how to handle conflict, how to hold people accountable, how to coach their teams. Not yell at their teams, coach them, cajole them, move them forward. They got to know how to communicate, both written and orally. They have to know how to plan. Those of you who follow me, you know my adage, all planning is good.
And look, they can't use AI to do all this. They can't see a problem and say, oh, wait, I don't like what you're saying. Let me see what AI tells me to do and I'll come up with a pithy response for you. I, I'm, I'm tired of the notion that chat GPT and these other plugins are going to help you lead your company. They're not. It might tell you some ideas. It might help you. Certainly I enter emails that I want to sound more professional and firm or whatever it is in the Chat GPT.
I'm using it to research all the time. But it's not going to solve all of your problems. And solving problems is what we need to learn how to do in the hand to hand combat per se, right at the spur of the moment, solving problems without immediately bringing the owner into everything.
You have to learn how to think and get better with each challenge and experience.
And here's something I really wish more business owners understood.
If your people can't make decisions without you, that's not always a people problem. That may be a leadership development problem. It may be how you carry yourself, have you trained them? Do they know you believe in them? Because that's what training does. Have you explained what a good decision looks like? When they do what you want, need them to do, and you like what they're doing, do you tell them with specificity? Have you allowed them a little rope to make mistakes?
That's how leaders develop.
Like we talked about earlier, giving someone a project when you're gone with no, like, hey, if you do this well, you're going to get promoted. Just give them the project and see what happens.
So what changed at glc? As I look back at all the stages of our growth, there were different requirements at every stage.
At 2 million, I could personally touch almost everything. There was hardly anything that got by me. At 5 million, honestly, that's not a huge company. But that became impossible.
We needed more managers, more systems, more accountability, better financial information, better processes. At 10 million and beyond, we've needed even more specialization, more technology, more leadership development, and more financial discipline. And here's the important part.
We didn't always get it right. I've made bad hires. I created positions we didn't need. We've had systems that became too complicated. We've grown faster than some of our processes could handle. But you know what? We learn from it. And that's why I don't think growth is simply about getting bigger. It's about getting better. I've lived all this and I'm living it right now. I'm not perfect. And I never want any of you listening to the Grow show to think I am. I try to help other landscape pros by speaking the truth. And the truth is running any type of business is hard.
It's just hard. Gross. Not easy. So here's three things I want you to think about doing this week. If you're listening to this and you're stuck around 2 million, here's your homework. First, write down everything that still has to go through you. And I do mean everything. There's your bottleneck list. Second, identify one system that's currently living inside someone's head, document it and get a system for it. Third, identify one person who you think could become a stronger leader in the next 12 months. Bring them to one of our events with you. Let the reins out on them. Have them handle a Saturday morning work detailing. Go take your spouse out to breakfast and spend some time with your kids. See how they do. Start developing them now. You got to try this stuff, folks. You can't wait until you desperately need a manager because that's when you make a bad decision.
At the end of the day, folks, if you remember nothing else from today's show, remember this. What got you here. Where you're at today won't necessarily get you to where you want to go tomorrow. Hustle might get you to 2 million, but systems, people, delegation, financial discipline and leadership is what's going to get you beyond it. And you have to be willing to change. As the owner, sometimes the hardest person in the company to develop is ourselves. And if you're trying to make this transition, there are two ways we can help you. Number one, come right here onto the campus of Grunder Landscaping Company in Dayton, Ohio. Come to one of our Grunder Landscaping company field trips. Don't just listen to me talk about systems and structure. Come and see what we're doing here. Ask our team members questions, see the good, see the bad, and the things we're still working on. And if you want ongoing help from other landscape business owners who are working through the same challenges and take a look at our ACE peer groups and schedule an ACE Discovery. The details are in the show notes. Our next Ace Discovery will be in Tucson, Arizona this November. It's right ahead of our ACE Connect. I know many aces listening today. You're going to be there with us at Dove Mountain. It's going to be incredible. See you there. For you landscape company owners that are listening and want to grow but feel stuck and alone, this is the best place for you to come. Come to ACE Discovery before ACE Connect. We can help you. I know we can. There's over 230 companies in my peer groups now and the combined revenue of all those peer groups is 1.7 billion in revenue. It's a very powerful community that can guide you to success.
I know we can. At the end of the day, sometimes the fastest way to get unstuck is to get outside of your own four walls and see how somebody else is doing it and understand that you don't have some strange disease and you can start working on solutions now. Go grow something.
Well, that's going to do it for this week's edition of the Grow show. If you haven't done so already, subscribe to the Grow show and if you can give it a rating or share a comment that helps more success minded landscape professionals find us. And if you really want to help us, take your phone out right now. Share that YouTube link, share that podcast, send it to someone, a landscape pro, another company owner. Maybe they're not even a company owner that you think you might help that would benefit us greatly. We'd appreciate it. Thanks for joining us on the Grow show this week. We'll talk to you next week.
[00:23:40] Speaker A: Thanks for listening to the Grow show and a special thanks to Aspire, Bobyard and Exmark for making this episode possible. We'll talk to you next week.
