Landschaftsbau: Wachstumsengpässe bei Recruiting und Ops lösen

0:00Unternehmer/Gast Uh, I own a landscape design construction company in the Florida Panhandle. We sell primarily to homeowners. Last year, we did around $1.5 million in revenue, around 300k net. This year, closer to 2.2 million and 400k net. Uh, I have one main crew, seven crew members, and then I sub out another like five guys. All right. Um, I got about 300k in cash.

0:29And my big goal is to have, you know, a $50 million plus landscaping construction firm with multiple divisions. >> Enterprise value? >> My main bottleneck right now What is it? >> Enterprise value or sales? Enterprise value. Okay, got it. Yeah, so my main bottleneck right now, uh, it's it's kind of a little bit of everything. Recruiting, ops, uh, deciding where to place the big bets, you know, buy property, invest in crews, um, you know, where to put that big allocation of money. So, really the main question I have is with everything that you have with context as far as what I do with the the revenue, the net cash, what I have in, uh, you know, dry powder, where do you think I should put the next investment that gets the highest compounding return over the next 12 to four or 24 months that'll get me the closer to my goal. More trucks, you know, buying or leasing a property that I've thought of that's high traffic area that could get me ideal clients, more marketing brand, or something else I'm not seeing.

1:37>> Yeah. Well, first off, uh, kudos on the question and context in getting to it. It actually gives me very helpful. Um, so basically you have to 20x, right, if you want the $50 million enterprise value. So, 8 million in EBITDA, call it 6x, 6 and 1/2 x, uh, is what you're going to get in multiple. So, that gives you your $50 million enterprise. You're currently doing 400k, so 20x that uh would be uh 8 million. So, uh we got to get to like 44 million, you know, top line as the goal. So, that's a great long-term goal, but in terms of short-term, the best allocation of resources is always going to be the constraint because that's where you're going to get the highest return. And so, the question is, number one, why can't you do more of what you're currently doing?

2:17So, what stops you? So, right now, I am kind of in everything. You know, I'm in what you call the swamp. Sure. that one to three million dollar range where I'm My hands are kind of in everything. I don't really have like two to three tailors that can run crews or, you know, eventually division. Like I kind of have to put out all the fires. Yeah. I have to make all the decisions. And I can market and sell. I've marketed and sold up to this point. And I think if all I had to do was market and sell, I could easily take it to 10 million plus Yeah.

2:48pretty quickly. But, I'm only able to allocate maybe 20 hours of my time per week actually go do consultations, market, and sell. >> What are close rates right now? Close rates are right around 30%. Okay. What's the sales motion? The sales what? Sorry. How do you sell people? Like what's Walk me through the the process of selling.

3:13So, the process is >> comes in from what? Yeah, they usually come in um inbound through organic search, organic social. That's where I get about 70% of my lead flow right now. >> Uh-huh. 60 to 70% and then they fill out a form and then we schedule an in-person consultation where we decide what they want to do with their property and I have a range of services from everything from

3:38>> Yeah. you know, full refreshes to, you know, 150K plus landscape design and renovation projects. So, it's kind of a huge range. And do you close on that meeting? No, it's a two-part play. It depends on what I do. So, if it's a design, then we have to walk through the property, get a design, and then from the design, I try to close during the design presentation because I bring a proposal with all the numbers with it.

4:04Alex >> Yeah, got it. Um Do you have any like videos or anything that they see in between there? So, I have my social media content. We post like three times a day between Instagram and Facebook. >> No, yeah, I don't have a video there. >> right. So, yeah. Okay. So, um one is there's two VSLs that are missing. Number one is VSL between um setting appointment and then and then you showing up there. So, it's VSL number one. Number two is between first appointment and second appointment. You need a second second VSL. So, video sales letter for everyone who's listening. Um we need to do that. I would do that so that you could like that might be the single largest influence on your close rate. And so, basically like you are properly priced without the correct sales presentation.

4:50So, if we do that, you might boost to like 50, maybe 60% close rates, and at that point we'd be able to increase the price by like 25%, 35%. And so, when we do that, we'd more than double the profit. When we double the profit, that'll then free up the cash so that we can hire some like a a crew chief um or crew leader that we need. So, is there somebody inside of the company right now that you think is a leader? I'm guessing no because that person would have already come up.

5:17Well, there's one guy that is definitely uh head and shoulders above everyone else. Okay. He leads He leads the main crew. So, like the bigger projects, more complex projects. He's been in the industry for a long time. Then he helps on the smaller projects >> Yeah. >> whenever it's needed. And then he also oversees some of the subs. So, he's honestly kind of spread thin, and the goal is to get a crew leader to make him a full-time project manager to make him a pure pro you know, operations

5:43>> will that cost? >> all of the operations and you know, 20 hours a month. >> how much will that cost? Right now, he he's at about a 75k. How much would it cost to No, how much would it cost to get him the help that he needs? Another probably 60k position. Okay. So, two options here. I do think you should do the VSL regardless. I'll just say that. Number one. Number two, are you willing to make $340,000 so that you can get the time back to be able to like double the revenue of the business?

6:18Alex 100%. Okay. So, if we wanted to go like two-step plan, make the two VSLs, that should take a day. This is not long, right? And then number two, immediately go put out the ads that you need to or do the outreach to get the crew leader, which should be easier than replacing the main guy, right? Mhm. So that you can de-bottleneck that constraint so that you can have that person handle most of the fires, so you can get another 20 hours a week back, so you can scale the business.

6:50Got it. Okay. >> That's it. And That's it. Awesome. Just do the VSLs, that'll improve the close rate. That's that's upside. If nothing happened, we should still put We should still make 340 so that you can get the time back because you can still double it assuming no margins change. Right. I got you. And where do you think we should allocate the the large kind of, you know, amount of cash I'm sitting on now? Well, you're going to need more You're going to need more trucks and equipment soon. You're going to need more trucks and equipment soon. That's what I'm going to save it for.

7:22Yep. Okay. So for your business, like where is capital going to go? It's always going to go towards the constraint. Right now, the constraint is talent. So we're going to allocate of the 400, we're going to make 340. 60's going to go to the talent, so we're going to increase capacity. Once that talent comes in, you're going to free up your time to do more marketing and sales. With the improved motion, you should be able to close at slightly higher prices, which will make up for that 60K pretty easily. With that, right? We can still grow the business. What's going to be the next thing you're going to be like, "I don't have enough crews or I don't have enough you know mowers, whatever, right?" At that point it's like, "Great, well I'm going to need to put out another 150 grand you know for equipment or whatever." So it's like, "Great, we're going to put that out and that's that's how we're going to roll." And then at that point it might be con- uh talent constrained again.

8:04Right. Got you. Okay. >> Cool. And as yes, and I did have one more question if uh if I have the time. Um as far as enterprise value goes, cuz right now my business is kind of smash and grab. You know, we go in we do the project and more or less unless somebody calls us for a project down the line or you know, they give us word of mouth. You know, that's about all I get from them. Should I try to allocate, you know, maybe this is a 6 or 12-month play, more reoccurring revenue into the business to get a higher enterprise value?

8:34Alex >> A thousand percent. If you want to sell this, yes, absolutely. So the the best first >> sooner than later? Uh I mean, yeah, I mean I would rather get you out of the weeds first. So like get your time back. The the first basically the first two steps that we just said. Get the time back. Then from there with the extra time it's do I want to expand the existing model or do I want to add more reoccurring? Either of those would be the next step. So I would probably say I would add the reoccurring nature to the business. The reason I think this is important or the way that I would think through this is that most people that I've seen who succeed with this model they will run they basically run this as their way of acquiring customers profitably and then that serves as a phenomenal price anchor for the ongoing maintenance and continuity.

9:17Got it. So it's like it's $75,000 for a whole backyard, you know, a whole backyard redo, whatever, you know, plants and all that right? And then afterwards it's you know, 800 bucks a month uh to to mow the lawn and and keep it going. You just made the $75,000 investment. You'd rather just have the guys who like know where all the pipes are, know they're not going to cut one of the one of the water hoses, you know, they just know where everything is, so you're just like not worried about it. Cool?

9:42Yeah, absolutely. And then as far as acquiring leads for that type of uh you know, caliber client, cuz that's what I'm looking for. With your with you going through everybody that you contractors and home service that you send to the workshops, what's been the most effective lead source? It's not like most effective lead source because all like there's many. So, Google search crushes for it, you know, for again, all of them every lead source is a different sales motion.

10:11So, the way that you treat Google search inbound leads, it's going to have a different motion than how you're going to treat Facebook meta ads, and the conversion rate like you should be converting 30, you know, 30% of your, you know, Google inbound leads um at minimum, and then on meta it might be 10. Right? It's just going to be different because it's it's colder, it's a disruption-based versus intention-based. Gotcha. Yeah, and the only reason I ask is cuz we've invested a lot, honestly, since consuming your content over the last 2 years. We've made like a thousand pieces of content, and I haven't really really even been to meta ads or Instagram ads, and I've started to gain some traction and got some branding from it, so that's why I asked. No, that's good. I mean, don't stop doing that.

10:49Alex It's an and, not an or. Cool? >> Right. Got it. All right. Rock and roll. Appreciate you, man. Real quick, I'm going to show you the exact 10-stage roadmap from zero to 100 million plus that less than 1% of companies finish I've now done multiple times, and so I can say with a lot of confidence that these are the stages as head count increases that you need to get through, and I broke each of these down by eight different functions of the business, what the constraint feels like, like what are the symptoms of it when you're going through it, and then what steps we actually took to graduate. And we've done this across software, physical products, service businesses, brick and mortar, all of this, and it works. And it's my gift to you, it's absolutely free, and so the link's in the description, but you just go acquisition.com/roadmap, just enter your info, and it'll spit it right back to you, all free.