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Talking 2021 Green Industry Economic Report

In this special episode of the Green Industry Perspectives Podcast, Ty Deemer welcomes the CEO of Single Ops, Sean McCormick, to the show. Sean shares the effects of embracing innovation, the evolution and key takeaways of their recently-released economic report, and what changed in the industry in 2020.

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ON THIS EPISODE, YOU’LL LEARN:

  • Why “focus” could be the missing ingredient to your business’ success.
  • The difference that maximizing a business management software can make.
  • How companies are cutting their time between invoicing and receiving payment.
  • 80% of the time, the first proposal received will get the job – how you can improve your acceptance rate.

Full Transcript:

Ty Deemer:

You are listening to The Green Industry Perspectives podcast, presented by SingleOps, a podcast created for green industry professionals looking for best practices, tactics, and tips on running their tree care or landscape business. 

All right, everyone. Welcome back to Green Industry Perspectives. I’m your host, Ty Deemer. I’m the marketing manager at SingleOps. And today we’ve got a unique episode for you. We’re going to welcome Sean McCormick to the show. Sean McCormick is the CEO of SingleOps and we’re going to dive into our recently produced economic report. Sean, welcome to the show. 

Sean McCormick:

Thanks, Ty. 

Ty Deemer:

Yeah. So every show, we ask the guest the same question and even though this is a special episode, we’re not going to break that trend. In your experience with working with green industry businesses, what are the top three things or common threads that you see in successful companies in the space? 

Sean McCormick:

Yeah, absolutely. Before we get started too, thank you for having me on our podcast. So this will be fun. So yeah. So three common threads I see in successful landscaping companies. We’ve got an interesting perspective on this just because with SingleOps, we work hands-on with thousands of individual landscaping contractors and professionals and just hundreds and hundreds of companies of all shapes and sizes. And so I think we’ve got a pretty unique perspective on what makes the ones that we see the most successful, what are they doing. And really the number one thing that I always see is focus. And you can kind of compare that to some of the companies that struggle may not have the highest profits or are just working so many long hours is they try to do too much. And the temptation to do that in this industry is enormous. Right? You start doing maintenance on someone’s property and then all of a sudden, they want you to take down a tree. Oh, I’ll do that. Then they want you to start putting in grass. And the next thing you know, you’re a full-service landscaping and tree care company doing everything under the sun, residential, commercial, municipal, you name it. But maybe you’re not making profits or you struggle to grow and it’s just so challenging to not have that focus. And so what I always see the most successful profitable companies, ones that are just growing fast and really well run is that they understand their DNA. They know what they’re best at. Maybe it’s residential maintenance. Maybe it’s commercial tree care. Like there are so many options in our industry and they double and triple down on those areas. One of our customers is a company doing well over $100 million in an annual revenue, been on the Inc. 5000 list. And they only specialize in a ground cover installation and delivery. And so a lot of people think that that focus can really restrict their growth goals. But in many cases, it really doesn’t. So focus is number one. Always number one. 

Other things that we see that are there in that top, one is embracing innovation of all shapes and sizes. So it doesn’t have to be technology. It can be process innovation. But basically, especially with some of the older companies in the industry, there can be this mentality of well, this is the way we’ve always done things and it’s worked up until now. So why would we change? We certainly see that with SingleOps and trying to get folks to adopt some new software. But it applies to anything. Maybe it’s a process change. Maybe it’s a new way to test out how you’re doing your meetings. Just getting that mentality of we’ve always done it this way, ain’t broke, don’t fix it, that’s the number one thing. Folks that embrace innovation and aren’t afraid to fail. That comes with it as well. So that’s a big one. 

And then last, I wouldn’t be doing SingleOps any service if I didn’t mention that we certainly see that the most successful companies in the industry are using business management software. And they’re not just using it, like they haven’t just signed up for it and they’re using some of it. They’re taking full advantage of the functionality and there’s some great solutions out there, SingleOps being one of them certainly. There’s a fit for every business in our industry at this point right now. But it’s not enough to just sign up and start using some of the functionality. The best companies are using all of it and then get things like job costing, like profitability metrics, really actionable data. Because when you use the whole system, that’s when you get those really, really valuable features. So not just signing up for software but getting it fully utilized. So three big things I definitely see in leading companies. 

Ty Deemer:

Yeah. Thank you for providing that insight. I think that’s a good segue. Obviously, you’ve just proven that a good bit about the industry. And we always like to have our guests share their background, how they got involved, and really just tell the audience if they’re not familiar with your story and why you’re going to be speaking to several of the topics we’re going to dive into today. 

Sean McCormick:

Yeah, absolutely. So my introduction into the industry came from really a friend who would start a landscaping business. I was fresh out of undergrad at the time and always been passionate about software and technology and had built some software companies. But just fell in love with the industry based on the business he had started in Atlanta. Early days, he was doing about $2 million in annual revenue and I came on to really help the company streamline operations and grow. And we were very successful with that specifically on the software side. Right? You always look at everything from a lens based on your prior experience and mine being technology and software, I just saw within his company so many improvements that we could make that our software could do. We initially released a prototype for his company. They’ve taken off like a rocket. They’re now one of the largest companies in the industry doing over $100 million in annual revenue. That was the introduction. Right? I really kind of fell in love with the industry there just based on the people that work in it. It’s kind of just honest, hard-working people they are but also too realizing that we were able to create something that actually drove a ton of value. And now of course, we’ve scaled just like our very first customers have and we’ve helped them scaled. So got users in every state in the country, in Canada and we’re growing rapidly. And kind of how we got started and why I love working in the industry. 

Ty Deemer:

Absolutely. So we’re going to spend most of our time today going through the Green Industry Economic Report that your team put together. So for those that are listening that aren’t familiar, could you just provide us with the background on the report your team’s putting together for the last two years and just what is the purpose of the report and what broad level data and information does it include? 

Sean McCormick:

Yeah, absolutely. So last year, we realized, we’ve always known that there was value in the data that SingleOps gets from our customers. But last year, we really realized that we had hit a scale where we were able to provide insights from that data in an anonymized fashion, of course. But really kind of see all right, well, can we see trends within the industry? Can we pull out insights that folks might not know about or give them averages so they can benchmark their company against them? And we really hit that scale to pull out like really statistically significant insights and data last year. And so we released a few reports last year kind of testing the water, see if folks would be interested in this type of information. And the response was just tremendous. Folks asked us hey, can you put these out more frequently, can you give me insight here or there? So with each iteration of the report, we’ve added additional data and insights and we’ve made changes. And so each one we do is the best one that we’ve done and I’m absolutely thrilled with the report that we have that we’re releasing at the beginning of 2021. One, because of the improvements we’ve made to the report which I’ll touch on. But two, because of the data in there and how unique of a year 2020 was and the environment that we’re still in, I think it just really shows some awesome insights that folks might not even know about yet. So that’s exciting. And then the updates that we’ve made, we’ve not only provided more data points to look at but we’ve segmented the data far better too so it could really speak more to exactly your department or your company. Whether you’re commercial, residential, maintenance, design-build, tree care, we’ve segmented all that so you can really see data that this speaks to you. 

Ty Deemer:

Yeah. So let’s go ahead and dive into that. You mentioned that the 2020 report set baseline metrics for things like proposal acceptance rate, average revenue per job. But this year’s report kind of goes the next level and starts including different breakdowns and added metrics. What are some of the things that your team included in this year’s report? 

Sean McCormick:

Yeah. So we did the segmentation based off of landscaping and tree care and then got even kind of deeper with residential versus commercial and then one-off landscaping so design-build and install versus recurring landscaping, maintenance, turf care, etc. Within each one of those segments, we looked at things that we typically look at like proposal acceptance and an average price per job. But we really wanted to step further this time and looked at things like average revenue per hour, also average time to receive payment. And everything that we’ve added too, we’re also now, because we’ve got a history of the data, we’re able to really map out trends. And so we’re able to say this data point improved or didn’t improve based on last year’s data and even further back than that, essentially across the board. It’s another report where we’re able to show that the majority of these things within the industry are improving which is great to see. 

Ty Deemer:

Yeah, that’s really exciting. So let’s go into what were some of the key trends that you saw. I’ve looked at the report and one of the things that was most interesting to me was some of the stuff around time to payment. So I would love for you to start there and kind of go through what were some of the trends with time to payment we saw from 2020 to 2019. 

Sean McCormick:

Yeah. There were several kind of key insights that we saw in this iteration of the report and the reduction in average time to payment was one of the biggest ones. And there’s a lot of reasoning behind that that basically every segment that we looked at, it wasn’t just one segment. Across the board, every segment reduced the average time to receive payment which is essentially from when you send the customer the invoice to when you are able to collect the payment. They saw multiple days shaved off of it. So just for instance, tree care shaved off three full days. One-off landscaping, which is design-build, install, we saw shave off seven full days. And recurring landscaping work like maintenance shaved off two full days. Basically, overall the entire industry is shaving off multiple days from their average time to receive payment. Why is that? Right? That’s what we’d ask ourselves next. And what we see within our data is an increased adoption in what we call modern payment methods, essentially integrated credit card solutions, ACH, that type of stuff. It’s not just an adoption that say landscaping businesses are making to offer more of these. It’s the demand that their customers have to be able to pay by those methods. So COVID clearly had an impact here and customers are wanting more options to do digital contactless payments. Right? And folks are just getting away from you wanting to mail a check or pay by cash or any of those old school methods which some who have been accepting credit cards or doing all this forever, like it’s crazy to believe that so much of the industry still is using old-fashioned methods of collecting payments. But what we’ve also seen is that business management software plays a key role in here too. Right? Because it’s one thing to say, okay, we’ll take your credit card over the phone or just send a link out to pay by that. But what business management software is able to do is take that a step farther and truly modernize payments with things like automated prepay, automated billing for recurring work, credit card, secure credit card storage, all sorts of kind of additional levels of intelligence and functionality to receive payment. All that, all that is what is driving this super significant reduction which we’ve seen it. It’s a trend kind of going on for a while now, but 2020 absolutely accelerated that trend. So and it’s a great trend to see for the industry. Right? Like there are some costs to be able to offer these types of solutions but the costs pale in comparison to shaving significant time off the time you wait to receive your revenue which means that you don’t have to have these high administrative costs in the office, chasing that down or doing collections. And because your cash flow improves so much, you’re able to run just such a better business. So that’s a great insight. So that’s one of them. 

Another really big one that we saw that was again another positive insight was that the number of proposals delivered was quite a bit higher than previous years and quarters that we’ve analyzed. So we have seen certainly all signs point to overall growth within the industry in 2020 and a lot of that growth was just led by increased demand for work, for new work and that’s coming from that increase of proposals. So significant increase in proposals delivered that also didn’t have a huge impact, really no overall impact on the proposal acceptance rate. Right? So there weren’t a lot more potential customers, commercial, residential out there asking for more work but didn’t decide to accept it. It was accepted and then sold and then that revenue was received. And so there’s overall growth there. And in some segments, we saw proposal acceptance increase, for instance, with one-off landscaping, install, design-build. We saw a significant increase there. So not only were they delivering more proposals but I saw their proposal acceptance rate increase. So overall good growth metrics on that side as well. 

Ty Deemer:

Yeah, that’s great to hear. It’s funny when you talk about like modernized payment systems and some of the end users or the end clients of these companies we work with, you talk about like mailing in the last check and I’ve shared this story on this podcast a few times. But that’s something my dad complains about every month. It’s the last check he has to mail in for any service that he buys. Everything else is either through an ACH payment or a credit card and his landscape service that he uses still only takes a check. So it’s definitely something that a lot of these end customers, like it’s just something they’re beginning to expect and maybe COVID just forced these companies to kind of acknowledge like well, if we weren’t going to do it before, now we really have to do it. So that’s great to hear. And then on the other front with proposals getting out, you mentioned that in some industries that some of these proposals are getting accepted at a higher rate. What are some things that go into in your opinion a proposal, the chances of that proposal closing? What are some things that companies are doing with digital proposals that make it easier or more likely for them to be accepted and go into a workflow? 

Sean McCormick:

Yeah. Well, one of the big data points is always that the longer it takes to send out a proposal, the less likely you’re going to get that job. And we still find a lot of folks in the industry maybe walking a property or getting the lead in the office and might not send that proposal out until days later. Right? And 80% of the time, the first proposal received gets the job. And so while it’s critically important to make sure that you’re estimating so that you’re optimizing your margins and being profitable, the system’s out there today, Excel spreadsheets. Right? Like get off that crap because the software out there today allows you to really estimate your margins so much faster. So you’re able to spend less time building that estimate, doing that work there, and you’re able to send that proposal faster which definitely increases your likelihood of getting the job. And then because you used all that good data and intelligence and the technology behind it, you know that job that you sold is going to hit your profitability goals. So that’s really kind of the key is efficiency but not at the cost of accuracy. Good process but also good software to back it up really allows companies to excel there. 

Ty Deemer:

Yeah, that’s great. So one of the things that the report did this year was break down work by commercial versus residential across the different service types we’ve been covering so far. And I think that’s interesting because, like you said at the top of the show in your common themes, threads of successful businesses is focus. Right? Like really honing into what service works well for you. So were there any specific trends that you really saw stand out when we looked at commercial versus residential work across these service types? 

Sean McCormick:

Yeah. There’s a lot of trends that are kind of no-brainers. Right? Like the average job size for a commercial across the board is going to be higher. So a lot of that isn’t really shocking or game changing. But one thing that we kind of saw that was unique and trying to put a why behind it might be more difficult. But we saw the reverse of that when we looked at revenue per hour. So average revenue per hour for residential was actually higher almost across the board than for commercial. That actually kind of took us by surprise to see that. We were thinking all right, commercial, larger job sizes. They were going—and oftentimes also, commercial more profitable. But the average revenue per hour on the residential side was actually higher. So that was a surprise to us and I think interpreting that really kind of comes down to the individual company. Right? And that’s why I think it’s so valuable for individual companies to look at this data and say, all right, here’s the average. We also, by the way, I haven’t mentioned yet, we segment the data based on geography. And so you’re able to look at that average. You’re able to look at not only your type of company, your service but also your area and see where you fall within that average. If you’re greater than average, awesome. But if you’re below average, why not use that as a rallying cry with your team to improve it? So I think not only does the report give you intelligence and data about the industry, but it also can contrive some kind of actions for you and your business. 

And then of course, two, for anyone listening, like we we’re always trying to improve these reports. And so if you’re going through it to the point where you’re kind of comparing your data against the data that we provide, we’d love to hear what you’re seeing or two, if there’s something you’d like to see in the report. Please just reach out to SingleOps and let us know because chances are, we’ve got some pretty good data there and we might be able to include it in the next version. 

Ty Deemer:

Yeah, that’s great, Sean. And it’s a testament to just how important these metrics are to these businesses and being able to have a baseline to compare what’s going well, what isn’t. So for anyone that’s listening that maybe hasn’t engaged with our report in the past, hasn’t looked through it, and maybe they’re not convinced these are important metrics to really look at or compare to, what would be your pitch to look at the report and to start going through them and seeing how their businesses match up? 

Sean McCormick:

Yeah. So the data points that we provide in the report are almost elementary to what we see with the most successful companies in the industry, meaning that these are numbers that their managers know like off the top of their head if you ask them. And so I would ask anyone who’s listening, read the report. Check out at least the metrics that we include in it and ask yourself, do you know that, do you have that data? Revenue per hour per division. Because we see that as fundamental to managing and running a successful business. And these are like kind of entry-level type metrics and there’s much more granular stuff you can get out of the system like SingleOps or a really good reporting software. So I would say challenge yourself to see if you guys are able to, if your company has this data, and then two, where do you stack up and where can you improve. Isolating areas to focus with your team to improve is far more effective than saying, hey, design-build, like pick it up, you guys aren’t doing as good. It’s no, average job size is below where we need it. So focus on sales, focus on making those jobs more profitable so your average job size doesn’t need to be that high. So a lot there. But I think really comparing how you’re doing with the report provides a ton of value and that’s why we do it and two, it’s interesting. Right? Like we all operate in this industry. We want to know how it’s doing. And so I think there’s a level of maybe entertainment value or certainly interest value in the report as well. 

Ty Deemer:

Yeah, absolutely. And for those that are listening, there will be a link to this report in the show notes of this episode. So if you’re listening and you want to pull it up, go ahead you can click there. It’s also going to be on SingleOps.com under our resources tab. There’s a page dedicated to it as well. 

Sean McCormick:

I would say one more thing actually to that last question. So another value out of the report, read it, memorize some of the metrics, and then use them in your next pre-industry conversation to prove that you know what you’re talking about, that you are wise within the industry. 

Ty Deemer:

Absolutely. Well, Sean, thank you for going and taking the time to provide some of the insights into the report. Really I think it’s an impressive piece that can provide value to our audience and to the green industry as a whole. So as a reminder, click on the link in the show notes if you’re interested in the report and then you can find it on our website at SingleOps.com under our resources section. But Sean, thanks for the time, and hopefully, the audience got some value out of it and will get value out of the report after listening. 

Sean McCormick:

Yeah. Thank you, Ty. Really appreciate you putting together these podcasts. They’re awesome. 

Ty Deemer:

Yeah, thank you.

Conclusion:

Thanks for listening to this episode of Green Industry Perspectives, presented by SingleOps. If you got some value out of this episode, drop us a five-star review on your favorite streaming platform. And don’t forget to become a pro member of the podcast at SingleOps.com/podcast. As a pro member, you’ll get notified of each new episode, access to exclusive bonus content, and be entered in to win some great prizes. Thanks for listening and don’t forget to tune in next week.

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