Real Contractor Stories: Dave Kerr of Kerr and Kerr Landscaping
KERR AND KERR LANDSCAPING
It is easy to be seduced by the idea of growth. More workers, more jobs, more equipment means more opportunities and more profit. This business strategy; however, can be deceptive. Too much growth, coupled with inadequate resources, is likely to leave most business owners scrambling to stay in control of their very own business.
The story of Kerr and Kerr Landscaping:
Such was the case for one family-owned company, Kerr and Kerr Landscaping of Cambridge, Ontario. In 1993, Brothers Dave and Rob Kerr joined forces fresh out of college and opened their own landscaping business with specialization in lawn care and maintenance work. “I remember having the discussion in our father’s living room,” says Dave with a smile, remembering his modest beginnings. With backgrounds in different fields (Dave studied business in college, while Rob studied Horticulture); the brothers believed that combining their complimentary talents would be the key to creating and growing a business.
Turned out it was. Before Dave and Rob knew it, their landscaping business had grown to be the 3rd best maintenance company in Cambridge. Starting out at a mere $5,000 in sales in their first year, their company, Kerr and Kerr, brought in over $20, 000 in sales the following year – while still small, it was a big jump in such a short period of time. In 1998, the company was incorporated, and Kerr and Kerr grew beyond their lawn and maintenance contracts to include more landscaping design and build projects. With such drastic expansion on the company’s horizon, both brothers knew they had to revamp the way they approached their business.
To keep up with their increasing workload, the brothers decided to divide their time and expertise amongst the company’s various projects – Rob and his crew worked on landscape design and build projects 3 or 4 days a week, while Dave hired a landscape supervisor, Justin, to help him and his crews continue with their maintenance work. All seemed to be running well. Kerr and Kerr scored big name contracts with Cambridge’s city hall and hospital and the company was successfully designing landscapes for residential communities throughout town. Looking back, Dave can rightfully say, Kerr and Kerr Landscaping was on the rise to becoming one of the leading landscaping companies in the area. “We were growing 25 per cent a year,” Dave says, adding that (at the time) he naturally thought, “We need more equipment; we’d be burning money without it.” According to Dave, this was the point where Kerr and Kerr started to run into problems.
Too many Yo-Yo’s, not enough control:
Dave also adds that, at the time, with the pressure of the company’s growth, he felt he needed more than just extra equipment. He needed more labor support – a thought he cringes over now. “We kept adding extra people to build up our labor because we needed to cut time…but it wasn’t happening,” he explains. “We would throw guys out there and it was like throwing out Yo-Yo’s, there was no control.” Turns out Dave found himself in a common situation many business owners experience. He was spending far too much time “running” on-site, micromanaging his workers to ensure they were completing tasks according to plan. “I found myself constantly babysitting,” explains Dave. “And I was always putting out fires… I was a fulltime fire extinguisher.” While Dave says his crews did work hard, they didn’t work productively. Lacking the proper training to think for themselves, much of the small, every day decisions and problem-solving tasks were left for Dave to take care of, himself. And with the company growing so fast, it was impossible for Dave to think for his crews and carry out his sales and estimating duties within the company. “Our quality started to come down because our jobs weren’t properly planned,” explains Dave. “We were giving money away!”
Ineffective equipment eating away time and costs:
The company’s old and worn-out equipment was also affecting its ability to bring in a profit. “We were bogged down with payments,” says Dave, referring to the lawn equipment from Kerr and Kerr’s early stages that he reluctantly held on to. Dave says he was hesitant to part ways with the equipment he had proudly owned for so long and it wasn’t until he hired his new office manager Deb that he was convinced the old equipment had to go. “We can’t justify spending $8000 on old equipment when we can lease brand new equipment for less,” explains Deb. Despite the sentimental value, Dave knew he could sell the equipment, put the money into his business and start leasing higher-quality equipment that would ensure jobs were done on time and in a more productive manner.
Time to pull in the reins and reclaim control:
Dave remembers the somber Christmas Eve in 2008 when he thought he would have to close the doors on Kerr and Kerr for good. But instead of giving up hope, Dave determinedly said, “I’ve got to do something.” He called a meeting right after the Christmas holidays in January of 2009 and he and his team set sights on completely restoring and revamping the company. “We decided to pull in the reins,” explains Deb, adding that the company’s first move was to downsize – downsize their equipment, their number of trucks, their labor staff and their workload. “We pulled back quickly and got in the groove of fixings things.” During this time, Dave, Deb and Dave’s landscape supervisor, Justin, decided to attend a workshop seminar orchestrated by Landscape Management Network. After listening to LMN’s presentations on business management and working for profit, the three of them knew that LMN was the solution to their business stress. “We thought ‘we have nothing to lose,’” says Dave. “We wasted more money than the cost of LMN in a month,” adds Deb. “Now we have to be PROACTIVE.”
Implementing Landscape Management Network Systems and Tools:
Business management:
Using LMN’s systems and tools, Dave and his team began “taking small steps” to re-manage their business. They realized that in order to increase their productivity and get back on the road to profit, they would have to change a few things: first off, their foremen would have to be in charge of running their crews. Dave decided that he would train his workers using LMN online training so that his crews would have the resources necessary to think for themselves. “We want to train our crews to run themselves and we want to teach our guys how to think,” says Dave, adding that with more empowerment comes a better crew and more rewards. “Now I don’t have to sit and babysit. I can take my usual ‘field time’ and replace it with sales and development time.”
The company also wanted to work towards building a more professional image. Following LMN’s philosophy about office/job management, Deb got to work creating job binders, complete with maps, pictures, and detailed daily, step-by-step checklists. “People make or break you,” says Deb. “With the job binder they [their crew] don’t have to think, there are step by step instructions in order, so the job can be done as efficiently as possible.” Deb explains that the goal is to decrease the potential for onsite error whenever possible.
Financial management:
Dave says that he wanted to use LMN to plan and estimate jobs and, since implementing the LMN system, he’s realized there are a lot of factors to take into consideration when pricing jobs. “I didn’t consider my overhead costs before,” says Dave. “I always did budgets but I didn’t know how to get there.” LMN taught Dave how to accurately price his jobs for profit. Now, Dave is able to produce detailed proposals for his clients that outline and specify how Dave came to his final job price. “Customers always appreciate how specified my plans are,” Dave insists, alluding to one of his customer testimonials, which reads: “You immediately understood the scope of the project and drew an architectural design which clearly put our vision on paper. Then you proceeded to make it happen.” As Dave explains, he now understands where his numbers come from and, in turn, he can adequately explain to his customers how he came up with the price. “Even if his prices are more expensive, Dave can show his customers why,” adds Deb.
Dave also discovered a more appropriate way to deal with employee bonuses. “Before, bonuses were always coming out of my end profit,” he explains. First and foremost, LMN showed Dave that he must be making at least 10 per cent profit before he can logically afford to hand out bonuses – a factor he did not take into account before. Dave also learned that bonuses should be used as incentive for his crews to complete and surpass their production goals. By writing up how Kerr and Kerr plans to increase its production goals and giving it to his crews along with the company’s percentage numbers (which show what needs to sell and what he can afford to pay them, keeping in mind his 10 per cent profit), Dave ensures his crews understand that the more money they save in labor costs, the more money they have left over for bonuses.
The Future of Kerr and Kerr Landscaping:
Dave has discovered first-hand that company growth and expansion was not in Kerr and Kerr’s best interests. “When we were small, we made a lot of money,” he explains. “I don’t want the stress of growing too big and growing out of control.” Following his new philosophy of less is more; Dave now operates with only 13 employees and 5 trucks – half of what he used to have. Interestingly enough, he has seen his best profit ever this year with less than half of his resources. “It’s the system,” he says, referring to Landscape Management Network. “It’s universal and it works, it’s about instituting processes that get rid of waste and re-managing your company for the better.” Dave is happy to report his landscaping business is taking off again. “I love running the business now,” he explains. “It’s a labor of love.”
Whether it’s advice on how to nurture your staff to excellence, a tip to save on costs, or the steps to take to put a new business initiative in motion, we can all learn something valuable from each other. Our goal with our Contractor Stories is to spotlight real people with real obstacles and effective solutions that are applicable to your own business.
The Landscape Management Network is the ultimate profit toolbox for landscape contractors. Developed by landscape contractors for landscape contractors, LMN’s suite of online tools and systems offer landscape contractors anytime, anywhere access to tools that drive productivity and profit.
