For Frank Leloia, landscaping is a family business. He’s worked alongside his father, above right, at Custom Landscaping and Lawn Care since he was 12 years old. Now, he is the sole owner and the business has been in operation for nearly 38 years.
But things have definitely changed since 1982, and Leloia has seen the company hit a few road blocks trying to navigate through new growth, especially in the last 14 years.
The company has seen revenue increase from $450,000 to over $6 million with the expansion into other service areas like irrigation and chemical lawn care. Now that Custom is on the growth path, Leloia says they’ve been experiencing issues that are impacting their bottom line. “There are things that occur with a staff of 100 that didn’t occur with a staff of 20,” Leloia says.
While Leloia says he feels like the company has a good grasp on a lot of policies and procedures, he admits they’ve been struggling with HR-related operations.
“The consistent issues would definitely be integrating and managing HR,” he says, “As we've continued to grow, maybe just delegating across the organization chart (could be) better.” Up until this point, the team has been focused on working on these issues internally, but Leloia says they’ve already started work with the Harvesters to remedy some HR dilemmas. He’s hoping that since they’ve worked to break down a more detailed organization chart, he will be able to delegate better to other leaders in the company.
“We've recognized that implementation of new processes and procedures are just very challenging, so hopefully we can assign those specific tasks to specific managers within the company,” he says.
In the numbers.
During their introductory visit, Bill and Ed realized there were some inaccuracies in Custom’s P&L’s. In fact, there wasn’t a way to determine the company’s current gross margin per revenue stream due to the setup of the P&L statements.
Overall, the company’s current gross margin sits right around 50%, with some skewed information coming from the snow segments revenue stream. In order to get a better picture of Custom’s gross margin, Leloia and his team will have to break down each maintenance job and dig into the true costs.
A welcome shift.
One of the bigger tasks at hand is the plan to shift from residential maintenance to more commercial accounts. “(Residential) is what we know,” Leloia says. He says the team is on board and ready to give it a shot, but they are still weighing some options.
“We're still trying to determine if going that route is really what we ultimately want to do. But with that said, we definitely want to add commercial work,” he says. “We've had a plan the last two or three years for residential to continue to increase density within our routes, ultimately increasing our gross margin, but we’re looking forward to expanding our commercial routes, too.”
The Harvesters set a goal of a 50/50 residential and commercial split by 2020. To tackle this, Custom will have to shift their marketing efforts a bit to go after new customers. Hopefully, this will include hiring on a business developer down the line.
“We ultimately want our hiring and recruiting to improve,” he says. “But we also want to try to make right hire at the right time.”