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‘The Seven Biggest Mistakes I Have Made in Business,’ by LMN’s Mark Bradley

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Business Advice

Mark Bradley

President of The Beach Gardener and Landscape Management Network, Brooklin ON

1. Starting the business without enough investment capital

With a pickup, a wheel barrow and absolutely NO MONEY, my wife and I started our business from our 600 square foot apartment downtown Toronto. I will never forget the first winter in business when she took a six week horticulture course at Landscape Ontario, we had to roll our pennies just to fuel her car to get there…..luckily it paid off! However, starting the company on a shoe string budget was a mistake – we actually came close to losing our newly purchased home that winter too. We were not prepared for how hard the first five years of business would be. We had huge obstacles to overcome, namely purchasing equipment and maintaining adequate cash flow to support our projects without enough working capital.  Had we spent more time on business planning before starting, we would have understood the actual capital needed in advance. I believe that landscape companies need 15-20% of annual revenue in liquid cash made up of its own cash and/or a line of credit. We found that the bank was not helpful until we were in business for five years and showed three consecutive years of positive financial statements. It’s no accident that “technicians” start landscape companies – anybody with a business background would run for the hills if faced with the variables in this business!  Lesson learned – start with a budget, and stick to it!

2. Growing the company before the systems were in place

We started without the education or experience we needed to operate an efficient business.  We simply wanted to be great landscapers. The problem is: you cannot become a great landscape contractor without great systems to follow. With great systems, your company has the means to add additional full-time crews, grow, and still produce optimum results. The transition from being hands-on owners to becoming business owners that hire people to design and create projects at the same quality (while still allowing us to earn the same profit margin that we had made as owner) proved to be more stressful than it needed to be. Creating systems by trial and error, while still managing day to day operations and problems, was almost impossible. We should have built the systems first, then grown into them. We found out the hard way that the secret to success in business is being prepared to do the work before you get the work!  Lesson learned – become a planning organization.

3. Growing too fast

We started in a neighborhood where the real estate values were skyrocketing. We simply didn’t have the working capital to expand at 30-50% each year. Our growth curve continued at such a high pace for the first nine years in business that we continually struggled with cash flow, despite earning double digit net profit margins every year! We could have gone out of business many times had our suppliers not been so supportive during times of cash flow shortage. Unfortunately, most startup small businesses do not fit the lending requirements of the bank, unless the company has a great track record and the owner has a really high personal net worth. The banks are simply not helpful. Being forthright, and explaining our financial situation to suppliers made a difference. If you find yourself in a bind with vendor accounts, communicate the situation clearly, and never break a promise once you have made arrangements to pay your debt. The best solution to this problem is to ensure you don’t out grow your working capital – you need at least ten to fifteen percent of annual sales in cash to manage your day-to-day operating requirements or you will struggle and make bad decisions as a result of cash flow shortage. Lesson learned – never outgrow your working capital.

4. Not identifying Superstars soon enough

We have had a few outstanding people leave our company over the years simply because they couldn’t see how this industry or my company would be able to support their future financially. We could have kept these people, and capitalized on their capabilities together, if we had the right system in place.  I have developed a way of keeping these Superstars – again, unfortunately, by trial and error! By leveraging these people and providing a more entrepreneurial environment and pay structure, we have expanded the company beyond my expectations while reducing my personal workload. Lesson learned – create an entrepreneurial environment or forever be surrounded by employees that work for a paycheque…..

5. Trying to operate without the right equipment

In the first few years of business, I was deathly afraid of monthly payments. When we really started to watch our spending on Labour and Equipment as a ratio to gross sales it was a scary state – we were spending 36% on Labour and 6% on equipment. Most of our equipment was old, we didn’t have a mechanic on staff to maintain the equipment so we had a lot of downtime, and often we were working harder, longer hours than we should have with more people than we needed to. I started turning out the older gear and leasing newer versions of the right equipment to ensure labour savings. We found we could do more work in less time with fewer people. We were on to the next project sooner, our sales revenue increased, labour spending dropped to 22% of gross sales within 18 months, and equipment increased to 10% of gross sales. The result was an increase of 10% in net profits, and better yet, our revenue had increased by 82% with the same number of people! That meant we could pay better wages to staff, pay ourselves more, run a more professional company and attract larger more complex projects with this modern fleet of equipment!  Lesson learned – being cheap is really expensive!

6.  Doing complicated work without the right skilled trades

As landscapers we have a short window to make hay. Customers are often buying with “instant gratification” in mind. We all have crews that are best suited for specific types of work – be realistic about this. I remember one year we had two Supervisors, one was incredible, the other not so good.  We had two complicated projects to work on at one time. I made the mistake of spending my day with the superstar supervisor setting up a new job. Meanwhile at the other site the mediocre supervisor was pouring a concrete pad for a flagstone patio 3” too high – that was expensive! I have had more of these situations happen than I care to remember. Lesson learned – do not overbook your company’s skills, and never take work that is outside of your skill set. Instead, consider a great subcontractor to manage the work outside of your expertise. Lesson learned – Understand how many hours of work you are selling – and don’t sell more than you have available, level the workload if you want to work efficiently. 

7.  Hiring the wrong subcontractors

Before we started building our own gunite pools and spas we hired subcontractors. I had a great opportunity to build a landscape project, but it included a concrete spa. I decided to hire a “start up” pool company who had a price that was $5,000 less than the others and he could start right away – he was basically a man and a pick up, and I should have known better. He built a concrete shell, but in the process he must have either forgotten to install some plumbing lines, or he may have broken them while pouring the concrete. I had paid him 15k of 22k and he disappeared. I had to jackhammer the spa out and start again. That’s how I started building pools and spas. Lesson learned – never hire subcontractors based on price….always work with reputable companies when collaborating even if there isn’t much room for mark up.

Mark Bradley

President of The Beach Gardener and Landscape Management Network, Brooklin ON

Mark Bradley’s company was incorporated in the green industry a little more than 10 years ago, and has since grown into one of Canada’s largest and most prestigious landscape construction firms. 

Mark’s quest for excellence is demonstrated both in the field, where the Beach Gardener’s work is annually recognized with design/build awards, and in the boardroom, where he draws on his expertise to provide invaluable business advice and first-hand industry knowledge to landscape professionals.

With his mentoring services sought out all across Ontario, it was only natural for Mark to give the industry a special ‘insider’s look’ at the strategy behind his success. The Landscape Management Network – an online collection of software, tools, systems and training for landscape contractors – was the result of his dedicated efforts to take the systems he used to grow his own company and make them available to the entire industry.    

Since his successful launch of the Landscape Management Network, Mark has been travelling across North America offering business owners and industry experts a candid look at the values, systems and numbers that have propelled the Beach Gardener to the top of its industry.

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