Anyone running a service industry business, whether it’s in landscaping and lawn care, asphalt maintenance and seal coating, snow removal, irrigation, or whatever it is you do, unless you had investors, you probably had to start slow.
Gear 1 – The Slow Start
You have to start somewhere, and most companies start slow, with a small initial investment, a client base that’s started from scratch, and a lot of hard work and long hours by the one person or small group of people who are starting up the business.
- Starting slow normally means one truck out in the field executing jobs… maybe even working solo until you can justify bringing in employees.
- Starting slow means taking on the jobs you can get now, while trying to find better work to do in the future.
- Starting slow means you probably handle all the selling, bookkeeping and back office work you can and pay an accountant for the hard stuff.
- Starting slow means bringing in $100,000 or less of revenue to start, and you soon reach a limit of how much work you can do.
Starting slow gains you momentum. It allows you to prove to yourself that you’re going to succeed and prove to your clients that you’ll be around to do the work they need. And it provides the base you need to launch a company that can do more.
Think of your own slow start as first gear. Your initial investment, the work you did, the equipment you used, this whole package was Gear (1). It got you rolling, but eventually you reached a point where you had to “shift” to move faster.
Gear 2 – Building a Million-Dollar Company
As your company grew, you shifted to a new model. This Gear (2) package meant more equipment, more employees, and bigger jobs. This model can take you from $100k or so of revenue to a million or two. To get there successfully, you have to overcome new challenges, ones that didn’t effect you during your slow start. Here’s just three of them:
- Management – When you were doing $100k, you worked alongside your employees (Assuming you had any) every day. You were onsite to manage every detail and make every decision. To bring in a Million, you may not ever visit each jobsite or even talk directly with each employee with any regularity. Your crew leaders make decisions onsite, and you can only try to hire and retain employees that make good decisions on your behalf.
- Ordering Materials – Early on, you could order everything yourself by calling a vendor, or even showing up to pick up materials and ordering them right then. Now you probably keep inventory to manage your supply chain and order in greater bulk to earn volume discounts. If you have staff that’s good at procurement, they might be saving you big money over time by getting better deals and better terms.
- Fleet Maintenance – Getting started, you could maintain a single vehicle or small fleet on your own or using consumer-focused service centers for everything from oil changes to brake and tire replacements. Now, your needs and more complex, and you need more planning. You may be employing dedicated maintenance staff to keep your vehicles performance-ready, or you might be pushing maintenance work onto salaried full time employees.
We’ve seen lots of service-industry companies grow to $1Million+ by figuring out how to shift from a solo slow start to an efficient multi-crew provider. There are probably several of these companies in landscape, asphalt, and commercial maintenance in every town of 50,000 people across the USA. But eventually, this model reaches its maximum too.
We see companies all the time that are “stuck in second”, and some are fine with staying there. They’re successful. They’re very profitable. It took them years to get here. And they can keep going on like this indefinitely. But what if they want more? What if you want to grow your business to a regional platform with multiple facilities and revenues closer to $10 million? That’s when you need to shift gears again.
Gear 3 – The Systems-Driven Company
Up to this size, a company can be run by one founder who personally controls all the important decisions. We call a company that’s managed this way “Personality-Driven”, and there are many successful Personality Driven companies in the industry. But eventually, any company will reach a point where that one person controlling everything becomes a bottleneck that prevents growth.
And that’s when building systems can be decisive.
Once you reach a certain size, there are just too many variables, too many moving parts, and too much going on for these same practices to remain effective. Any growing company needs to make the right decisions. But as you get bigger, you need to make more of them, and they need to be made faster. That’s when you need to shift from a “Personality-Driven” company to becoming a “Systems-Driven” company to reach the next level of growth.
You’ve already made changes to get here, but this shift requires you delegate important parts of your business. You’ve already delegated many operational decisions just to get where you are, but this next step can be much harder because it requires you to fundamentally give up control of financial and strategic decisions, not just operational ones.
But just like shifting from a small solo operation to a bigger one with multiple crews and a bigger footprint, companies at this stage need to shift gears if they’re going to grow further.