Empowering employees to buy the companyBy Tom Hatlen
As of January 1, 2019, John Cottrell will no longer be the owner of Brookside Landscapes. He’s selling his company to 4 of his key employees. They’ve been groomed for this though not as part of any master plan.
Brookside Landscapes, Inc.Eureka, IL
Customer base95% residential
Project range$3,000 to $200,000
Annual sales$2.1 million
Employees10 year round
It’s just that John has always empowered his people as part of his approach to management. He’s empowered them to the point where they became the face of the company. The process accelerated 15 years ago when he began spending much of his time starting up a wholesale nursery.
“I never felt that our clients needed to know that I was the owner. Most of our clients won’t even know the company has been sold.”
Charles Vander Kooi would have called this a perfect scenario for selling a company. Most contracting companies are too tied to the owner, and much of past clients’ goodwill toward the company leaves when the owner leaves. So there’s not a lot of value there when you sell the company.
In this case, with the same team and company systems in place, the risk to the new owners is minimal and the value of the company is much higher. Just the same, the buyers were long-time employees and John reduced the price to start them off on the right foot.
To come up with a basis for pricing the company, they worked with an accounting firm that does a lot of company valuations. The price is based on the value of the company’s assets like equipment, and the value of the company’s name/reputation. But, no, John doesn’t want to go into how much he sold the company for.
Giving people responsibilityEmpowering employees has allowed them to grow. John says, “Giving people real responsibility forces them to step up to make sure the job's done right and make sure the client's happy. They're not relying on someone else to do it.
“From the time we get a phone call, our designer handles the sale from start to finish. I don’t step in.”
When the designer hands off the job to the foreman, they want the foreman to “own” the project. “If the client's upset about something we want the foreman to deal with it. If the client calls the designer, the designer will pass it on to the foreman to follow up with the client. The client learns pretty quick that if they’ve got a problem, they need to deal with the guys who are doing it, and it's really worked well.”
The designer continues to keep in contact with the foreman and to visit the job regularly to check that all is going to plan, and that the project is completed on time and on budget.
Spreading responsibilitiesIt's an important part of the foreman’s job to build a relationship with the client so that the client naturally calls him first. The foreman has the client's cell number and contacts the client daily through a text or a phone call. They ask the client for comments and questions, and they let the client know what to expect next.
“Taking care of the client comes through communication, not just through doing the job. We coach foremen to think from the client’s perspective. It might look like a war zone for a little bit and we want to be proactive in telling them the steps thru project completion.”
Responsibilities are spread out beyond foremen to help everyone grow in their work and take ownership of what they do. John says this is especially true for the full-time staff.
“Our guys have advanced whether that's a guy taking on the responsibility of safety training or another guy taking on the responsibility of training methods to do a job easier. Someone else takes on responsibility for bulk material ordering. Another guy takes care of the whole yard and shop.”
Everyone can get a bonusEveryone, from crewmen to foremen to designer is incentivized to give the client the best possible experience in working with the company, the “Brookside Experience,” where “The process is as enjoyable as the product.” John says it is the total experience that leads clients to make referrals which is where they get nearly all their business.
Seasonal employees each receive ratings from their foreman in 5 categories each worth up to $10 each towards a gift card each month. The categories are detail/precision, efficiency, the Brookside Experience, phone use and safety.
Year-round employees are eligible to receive bonuses paid out twice a year, usually August and December. “We track all of our jobs and if we hit our gross profit percentage goal for a job, they get paid a percentage of that.”
“We feel like our incentives help get buy-in from everyone on the job, not just the foremen. They learn to treat the client with respect, and build that relationship. They make sure the client's happy and that we've created a great outdoor space for them.”
Employees stayEmpowered employees (who also receive bonuses) feel like valued members of the team. It’s great for retention. “We really haven't lost too many full-time guys over the years. We've got several employees that have been here 10 years, some over 15.”
Not laying people off every winter goes a long way towards keeping well-trained employees. Even though the company is located in Illinois, they keep their 10 full-time employees year round. They work 40+ hours a week March thru December, then 25 to 30 hours a week in the winter.
“There's a lot that can be done in the wintertime. If the ground's thawed, you can plant trees. Depending on the job, we’ll build a patio and cover it with frost blankets. We sub-out a few of our guys and our machines to plow snow for other contractors. Our company doesn’t do snow. Then we do shop work, and we do a lot of training both in the winter and every Wednesday morning.”
“Training helps us advance the abilities of what each of our guys is able to do. The more they learn, the more valuable they are to the company. This opens the door for advancing in their career.”
You can make a careerPeople stay because they can make a career at Brookside. “People think you can't landscape when you're 50 years old. Our answer to that as a company is: ‘Yes, we can, and we do. You can finish your career out here.’
“We work smart and take a lot of the back breaking work out of it. We have always been equipment-heavy. We're not afraid to try the new advancements in equipment and/or tools and/or methods of doing a project. That keeps our guys inspired.
“We use our mini skids heavily with a lot of different attachments. We use a lot of lifting and other specialty tools from Pave Tool. We use as much clean base as we can because it goes in faster and is less labor intensive. We rarely dig a tree hole by hand anymore. It's all with an auger and mini excavator. Those are just some of the things.”
Transitioning the new teamJohn says he still loves landscape construction, but his job had evolved into management work where he wasn’t doing hands-on work anymore. “I felt like this group of 4 guys had really stepped up and I wanted to give them an opportunity for ownership. It was time for me to get out of the way and devote myself full-time to the nursery. I think the business will be in great hands.”
A few years ago, John started to mull around how the transition to the new owners would go. Managing a partnership can be challenging. After all, only one of the owners can be president. Some of the owners will report to other owners. He wanted to help the future partners get started by bringing in a consultant.
“I liked that [consultant] Jim Paluch was focused on the people aspect and the team building. Jim has helped these guys gel together and understand that they each have strengths and weaknesses, and that they need to rely on each other.
“I think we're in a good spot now. They established a management structure based on their strengths, talents and their abilities. I really feel like each one embraced their role. I feel like God has blessed us with our people and our clients. I'm excited for the future because I feel like we've laid a foundation for them to take the business into the future.”
The need for a nurseryAt age 47, John’s not retiring. Instead, he’ll be devoting all his time to running his other business, Stoneleaf Nursery. “Here's what happened: I started Brookside Landscapes 25 years ago. Then about 15 years ago I saw a great need in our area for a nursery and re-wholesale.
“It was becoming hard to get plants because of the changes in the nursery industry. It used to be that a contractor could get most everything they needed from just a couple sources. Then nurseries began streamlining what they grew and we found ourselves spending a lot of time chasing plant material from a lot of different sources.”
John saw contractors all around him doing the same thing. So, 15 years ago he started a wholesale nursery at a separate location that would serve as a 1-stop shop for area contractors. He both sells plants he grows and resells a broader range of plants he buys elsewhere.
“We're a grower and a re-wholesaler. We buy product from all over the country where it's grown best and we put it in our holding yard under drip irrigation. Then when a contractor needs it, we will have it. We built the nursery heavily on service. We deliver good quality material right to the job site just in time when it’s needed.”