Contractor Stories
Looking to advisors allows profitable growth
The key to growing RJ Lawn & Landscape has been looking to others for help.
By Tom HatlenMost contractors start out working in the field, sometimes holding other jobs to pay the bills. Ryan McCarthy started that way in 1997. Today, the company has 59 people, and Ryan’s role in the company has shifted to the office. “The big misconception is that when your company gets that big you don’t even come to work anymore. I still work long hours to stay on top of things.”
Ryan believes the key to growing the company has been looking to others for help. He’s developed his own team of outside advisers he consults thru the year. This includes the help of a personality survey firm they have used to develop an excellent group of employees that keep the company moving forward.
On-target profiling of prospective employees
Project Profile
RJ Lawn & Landscape
Waukee, IAFounded 1997
Ryan McCarthy, President
Customer base
35% residential65% commercial
Services
36% landscape44% maintenance
20% snow
Employees
59“We found we were putting smart, capable people in positions that were difficult if not impossible for them to live up to expectations … therefore ending up stressing them out.”
Stressed out employees tended to leave the company. Ryan found that the key to keeping employees and to keeping them working efficiently and happy was matching their role in the company to their personality.
To do that, everyone who applies for a job completes the personality survey. The survey lists 300+ words and asks applicants to choose which of those words describe them as a person. Ryan says the survey doesn’t measure how smart people are or how much experience they have. It profiles their personality.
Ryan says, “It can be hard to know what people are really like just based on an interview, especially if they really want the job; they’ll tell you anything. The survey is difficult to manipulate.”
Hiring for character is critical
Beyond the personality survey, Ryan is also very involved in the interviewing process. “I want to see who's coming in the door. I want to look them in the eye. I want to shake their hand. I want to see what they're like before they get hired. Would I feel comfortable sending that person to my mom's house?”“I want to hire someone who has a good core as a human being. That’s where it has to start. You can train and teach people a lot of things. I’m not afraid to say that I’m not the smartest person in the company. Our landscape architect that does our sales and drawings had his own design firm for 13 years. Our landscape production manager owned his own company for several years. All our lawn applicators have hort degrees. Beyond just trusting their knowledge, I also trust that they are good people.”
Everyone needs 3 advisors
Ryan says that over the years he’s had a lot of people in other industries tell him the same piece of advice: that it’s important to have 3 really good advisors.“7 or 8 years ago that really clicked into place for us and really helped us through. You need a good accountant to work with you throughout the year, not just at tax time. You need a good attorney, and you need a good banker.”
1. The accountant
“We have an accountant who has helped tremendously. He’ll come in and help us with job costing. He’s pushing us to do more forecasting and budgeting, which is something we’ve never done.
“He helps us look at cash flow. For example, a good salesman can get you all fired up about buying an $85,000 piece of equipment and how much more efficient you will be. It’s easy to get caught up in that excitement and justify the purchase. It’s almost better to have someone outside the industry like the accountant challenge us to justify that purchase.
“He looks at our quarterly tax payments and he may say we need to make adjustments during the year. Or, ‘Why is this area struggling?’ In your day-to-day work you can lose sight of things. You don’t want to wait 6 months to find out you’re losing money somewhere. You want to make the changes now so it doesn’t keep digging a deeper hole.”
2. The attorney
Ryan says he doesn’t spend near as much time with his attorney or his banker as he does with his accountant. But the larger your company gets the more you need the advice of an attorney for things like personnel issues, clients who don’t pay and protecting your assets.
“A few years back we were stuck with a large unpaid bill. The attorney helped us set up systems so those things don’t happen in the first place. He helped us rewrite our contracts with all the fine print.”
The attorney has also helped them improve their employee handbook with things like a 3-strikes policy to keep them on firm legal ground. He’s helped them administer benefits for terminated employees, because not all benefits end with termination.
Ryan says he learned he needs to have provisions in place so the company can continue in his absence. “As sole owner of a business, if you and your wife are in a car wreck, what happens to the business? You should have something that protects your employees so they’re not just hung out to dry if something happens to you.”
3. The banker
Ryan learned the importance of developing a good relationship with a banker so that a line of credit would be there when they need it. “It’s especially important for companies in the northern part of the country where we shut down for several months of the year. It’s easy to have cash flow issues if the weather is not cooperating. It is also helpful to be able to package loans to get better rates for purchasing equipment and vehicles.”
Ryan wants their banker to be familiar with their accountant so there is a degree of professional respect already established when they go to see their banker. It also helps for the banker to be familiar with the company so the banker can provide good advice for the company’s unique financial situation.
In addition to those 3 advisors, Ryan keeps in touch with a couple other business owners in the industry. There’s no replacement for talking things out with someone who’s going through the same things you are.