Profit First
In this episode of the Green Industry Perspectives Podcast, Ty Deemer welcomes Adam and Sahra Linnemann, owners of Linnemann Lawn Care and Landscaping Inc.
Adam started Linnemann Lawn and Landscape at the age of 14. Today he and his wife, Sahra, run the business together, as well as a consulting and peer group called The Green Executive. While Adam had the technical know-how for running a lawn and landscape business, his wife Sahra brought many of the operational business processes they use today. Today Linnemman has 25 employees, even after scaling back. What Adam and Sahra found is that using “profit-first” methodology, they were able to reduce the amount of employees they had while increasing profits.
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IN THIS EPISODE, YOU’LL LEARN:
- Why you might need to scale back to grow
- Why you need to separate your business from your personal life
- How to find more profitable projects
- How to pay yourself first
LINKS TO LOVE:
- Linnemann Lawn Care & Landscaping Website
- The Green Executive Website
- The Green Executive Podcast
- What is “Profit First”?
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 in running their tree care or landscape business.
Ty Deemer:
All right everyone. Welcome back to Green Industry Perspectives. I’m your host Ty Deemer and today we have a great episode for you. We have Adam Linnemann and Sahra Linnemann on the show to talk about landscaping and everything going on in their business and in the work they do with a ton of other businesses in the space. Adam and Sahra, welcome to the show.
Sahra Linnemann:
Hey-
Adam Linnemann:
Hey.
Sahra Linnemann:
… Happy to be here.
Adam Linnemann:
Thanks, Ty.
Ty Deemer:
Yeah, this is our first dual guest show, so I’m really excited-
Sahra Linnemann:
Oh!
Ty Deemer:
… to get three people on the call. It’ll be a lot of fun. But Sahra and Adam, we start off every show with the exact same question, and we ask our guests to just define what they view are the top two to three reasons that their business has been successful or why they’ve seen other landscape businesses take off with success in their space.
Adam Linnemann:
Sure-
Sahra Linnemann:
Can I go first?
Adam Linnemann:
You go right ahead, Sahra.
Sahra Linnemann:
Because I like to go off the top off my head, right? That’s how I like to roll. And my very first thought when you said, Ty, was because we treated it like a business. We didn’t treat it like an extension of ourselves or … We never mixed our personal money with our business, we truly gave our business its own identity. And it’s been that way just inherently from the beginning for us. And I think that really helps us see it for its own success or failure.
Adam Linnemann:
I’d say just implementing a good green industry-specific software, that really helped us succeed. And going from an Excel spreadsheet or Google Calendars to one system and going all in, I think that’s really important. Whatever system you use inside the green industry.
Sahra Linnemann:
I think that definitely took it … Like you get a growing pain point. And at a certain point you need that, like automatic wipers, right? You would never be without automatic wipers. You wouldn’t automatically, manually yourself go up there and turn them on. You would let a system work for you. And you get to a certain point you need that system, and usually you realize it too late.
Ty Deemer:
Yeah. Absolutely. I love those two points. We’re off to a strong start on the show, so. And I’m sure both of those will kind of tie into some of the other topics we have planned to discuss later. But I’d love for you both to provide your backgrounds. Obviously you run your business together, but you also do so much more in the landscaping space now than just running your own business, so tell me about your journey. How did you first get involved with your company, how did it start and kind of talk about where you are today, all the way through.
Adam Linnemann:
Sure. So I started Linnemann Lawn & Landscaping at the age of 14 back in 1994 and grew the business to where we are today. Back in 2017 we started The Green Executive, which is our landscape industry peer group and consulting firm. We are also certified Profit First professionals. Back in, what year did we meet, Sahra?
Sahra Linnemann:
I was going to say, you skipped a really important year.
Adam Linnemann:
Was it twenty oh-
Sahra Linnemann:
I think it was 2003 or 2004.
Adam Linnemann:
2003, 2004 we met. Sahra worked at a John Deere dealership, actually.
Sahra Linnemann:
I did, and that’s how we met. Aw.
Adam Linnemann:
I may have stalked her, Ty. I may have stalked her.
Sahra Linnemann:
He really did.
Ty Deemer:
All right. You might have to go into that a little bit. You can’t just bring that up.
Adam Linnemann:
It was pretty simple. You know.
Sahra Linnemann:
Yeah. Yeah. Pretty simple stalking. Yeah. Creeper. Creeper alert. He, yeah. He tracked me down. Well that was before the days of whitepages.com and all that stuff, so. Yeah, he did a little stalking. But anyways, we met then because I was working at the dealership that is local to Adam’s. And then I feel like you had the business established and you had the physical know-how, but the processes and procedures kind of came full circle when I came on board there.
Adam Linnemann:
She helped out a lot. With our invoicing, with our billing, organization-
Sahra Linnemann:
I didn’t want to toot my own horn, but I really felt like that was my-
Adam Linnemann:
… HR, all that good stuff. And that’s what she still kind of does today with part of our landscaping business when she comes in a couple days a week and helps out.
Ty Deemer:
Awesome. Yeah, so I feel like there’s kind of two follow-up questions there. One, on your actual landscaping side of the business, of which you all do, what all does Linnemann work on? What type of services do you all offer? Full-service landscape or do you all specialize in like a certain area?
Adam Linnemann:
We do offer pretty much full-service landscape. I would say our four main divisions is going to be our mowing divisions, which honestly we are slowly trying to get out of that a little bit. We were up to four mowing crews and one point in time, now we’re purposely down to two mowing crews, just for profitability reasons. There’s not a whole lot of great profitability in residential lawn care, mowing.
Sahra Linnemann:
For us.
Adam Linnemann:
For us. Fertilization. We provide a seven-step fertilization program as well as mosquito control. Landscape design-build, and then last but not least we do quite a bit of snow removal. We can make up to 20% of our revenue in our company if we have a decent winter here in St. Louis.
Sahra Linnemann:
If it snows.
Adam Linnemann:
If it snows, yep.
Sahra Linnemann:
Yes.
Ty Deemer:
Yeah. Can’t control that, either.
Sahra Linnemann:
That’s mostly residential until you get to the snow. Snow’s all commercial. Everything else is mostly residential.
Ty Deemer:
Great. And obviously you’ve been doing it since you were 14 years old, so I imagine the company’s grown quite a bit since then. What employee size are you all at now?
Adam Linnemann:
We were up to 25 employees and we’ve actually, like I said, kind of scaled it back a little bit and held our sales and increased profitability-
Sahra Linnemann:
Yeah, that’s-
Adam Linnemann:
… over the years.
Sahra Linnemann:
… a really interesting question, because we were recently just discussing that as far as, we’ve downsized a number of employees, yet maintained, or a little bit grown, revenue. And profits have definitely grown, so. All strategic.
Ty Deemer:
Gotcha. Okay. Awesome. And then shifting mindsets, The Green Executive, first of all, just kudos to the logo and the name. It’s awesome. I’m jealous of it. It stands out for sure. But talk to me about what The Green Executive is, what you do, and kind of … Obviously it works hand-in-hand with your landscaping business which is why it probably is exists, but talk to us about how you serve your customers in that realm.
Adam Linnemann:
Sure, so at The Green Executive we run a couple landscape industry-specific peer groups, so that’s kind of one of our services. Members, we meet once a month over a Zoom meeting and they are from non-competing companies inside the peer groups. And we discuss everything from financials to strategic growth. Sometimes we bring in some guest speakers and we really just kind of sit down and strategize and try to help each other out with growing our businesses. That’s one of our service offerings.
Sahra Linnemann:
Don’t forget there’s a ladies’ group.
Adam Linnemann:
Sahra also offers a ladies-only group on her end, so that’s cool. But one of the things I think that sets us apart, actually a couple things, is we are certified Profit First professionals, so if you haven’t ever read the book Profit First by Mike Michalowicz, he’s also the author of The Pumpkin Plan and several other books. We became certified in the Profit First methodology, which I’d love to talk to you about a little bit more here shortly.
Sahra Linnemann:
This is more strategic planning [inaudible 00:07:56].
Adam Linnemann:
Yeah. And one more thing I was going to mention. I forgot now. I apologize, Ty.
Ty Deemer:
No, no. You’re great. That’s a great segue, right? We’re going to talk a lot about profitability on this show today, talking about what it looks like for really landscaping businesses to prioritize profitability. So let’s start from the top. What led you and Sahra to become so passionate about profitability or something that you felt it was worth becoming certified to teach others about? And I’d love for you to make it personal, because obviously if you’re going and telling other people about it, it had to have made an impact on your business for sure.
Sahra Linnemann:
So what really happened was it just really, it sounds really cheesy, but the universe was telling us, hey you need to explore Profit First. It was coming at us from all these different sources. So we had clients who were not only discovering themselves, but in working with our clients at The Green Executive we realized a lot of them were in crisis mode. And Profit First after we took the signs from the universe and explored it even more, it was a system to help these people get out of crisis mode. Because we could talk and say all these things, but this was a full outline of, here, do this. This is something that we could help them, this is a structure to start with. Versus our advice here and there, which I like to think was pretty decent advice but at the same time this was a structured program that had a full outline, it had the book behind it, all of these tools that we could share with our clients to help them really, like you said, Ty, get that profit first.
So it kind of flips the thinking of hey, I’m in this business and I have all these expenses and I’m going to get the scraps. Well, no, you deserve so much more than the scraps. You deserve your profit, which is a reward for that risk when you’re putting yourself on the line as a business owner.
Adam Linnemann:
So on Profit First there’s actually 500,000 companies that are implementing Profit First methodology across the world and in every country. Through the stats of Profit First, we’ve learned that 83% of small business owners are literally living paycheck to paycheck. And what we do is we help them bring much more clarity into their business financials by ensuring profit first.
So if you were looking at a business and typically you look at it as your sales, or what you bring in as your income, minus your expenses equals your profit. And that’s how most people look at a P&L statement or their financials. Well, what we say is that things that are last, so in that situation, profit is last or the bottom line, things that are last are not paid attention to like they should be. So what we do is we flip the formula and we say sales minus profit equals your expenses. And naturally what comes first, Ty, is something that you’re going to pay much more attention to and allow that to be more of a priority for you.
Ty Deemer:
Yeah. Absolutely. And I feel like it really does tie in to, Sahra, your first point about understanding that separating yourself from your business. It is a business and then your personal profits are your own deal. You have to separate those from the beginning to recognize really you do have to prioritize yourself. So I think my follow-up question here is if someone’s listening to the show and they’re like, hey, that’s me. I’m in that percentage of people that like, I’m growing this business but me personally as the owner, I’m struggling. I’m going paycheck to paycheck, my business is growing but I’m not reaping any of the benefits of that. Talk to me through what does it look like in situations that you’ve worked with in the past to begin to walk people through how to get out of that mindset and then take on a new profit first mindset.
Sahra Linnemann:
Sure, we’ve been there, too. I mean, there were years in the business that, times where we didn’t take a paycheck. There were times when we were running to the post office to see what came in for the business so we could get it to the bank that day. So we’ve been there ourselves and it really takes a switch. So if it’s someone at home who’s saying, hey, I’m struggling. I’m struggling either as a business or personally, there is hope for sure. I mean, not to sound corny but there is hope because it’s all in the little, tiny steps. The little, little things will add up so much.
I think a lot of times people are looking for this big, giant, what’s going to save me $10,000, or what’s going to save me this or that, huge chunks of money, but the thing is, those little changes add up so much over time that you get to that $10,000 anyway. And it’s a more realistic and sustainable approach because we don’t want this to be something that you can’t maintain. That’s the whole purpose of it is that this is a shift in your mindset that’s going to happen naturally by harnessing the power of you always looking at your bank account.
So if you’re at home and you’re struggling, the number one place that’s recommended to start is just open a separate account, find a bank that’ll do it for free for you, and take 1% of everything the business brings in and put it in that separate account. If you can operate your business on 100 dollars, you can operate your business on 99. So just start there. That’s the number one, like, if you’re not going to do anything else, start there.
Ty Deemer:
Mm-hmm (affirmative).
Adam Linnemann:
On … First implementation, that is where you can definitely start. What we do is when we coach our clients through the Profit First for landscapers implementation process is we actually have them open up a series of bank accounts and we ensure that they have accounts specifically for owner’s pay so that they’re paying themselves a fair salary, a account for taxes so they can put money away and pay their taxes so there’s no surprises on March 15th or April 15th, whenever it’s tax time.
Sahra Linnemann:
Can you tell I do the books? He doesn’t even know when tax is.
Adam Linnemann:
On the … Obviously a profit account is started as well and you’re funding that, and then the last account you’re funding is your operating expense account and that’s what you’re paying all your bills out of. So in a sense if you can imagine a pie, literally like a pie you would eat or a pie chart, whatever-
Sahra Linnemann:
We like to eat a lot, so a lot of our references are about food.
Adam Linnemann:
You’re literally having a percentage of a pie for each of those four categories.
Ty Deemer:
Yeah, and I think what kind of the big picture is, one thing you’re touching on is you do have to know the numbers behind your business to be feeding all of those things correctly, too, so. What’s y’all’s take. Do you feel like most landscape companies truly know their numbers or is that a farce?
Sahra Linnemann:
So, if I was going to most, I’d say no. Because there’s so many out there. And they kind of separate themselves at some point, right? Where you have the guys who are working, they’re on their own, they’re grinding it out every day by themselves, and there’s a ton of those guys out there, and then you’ve got the gamut up to the millions of dollars revenue company. So obviously the bigger guys tend to know their numbers a little more and they’ve honed in on them.
And when we say know your numbers, that means just be aware. Ideally you’re tracking it in some sort of software or system, even if it’s a ledger. Just tracking it somehow of money you’re bringing in and where the money is going out. So you have the ins, and you know where the ins are coming from, and the outs, you want to know where the outs are going to. And with Profit First we get everything on a cash basis, so that’s kind of an accounting term where as it really happens, in real time, cash basis, cash in hand is king, and that’s how we look at it in those bank accounts that Adam mentioned, those are used to truly know how much money is coming in, and then we take that in and we divvy it out.
So that pie you’ve got, the pie is the in, and the out we can break that up into all different kinds of slices. And our goal is to help people get that profit slice as big as we can, and the owner’s pay slice as big as we can, to have a financially healthy company. Big picture.
Ty Deemer:
Mm-hmm (affirmative). Absolutely. So I wonder, my first thought that someone leading a green industry company would be like, yeah, that’s a great idea in theory, but what happens when a piece of equipment breaks, or unexpectedly? Or what happens when one of my key team members threatens to leave if I don’t pay them more? Like the unexpected things, like what account do I pull from if something crazy happens? How do you all coach people through planning for those types of things?
Adam Linnemann:
So things such as equipment and whatnot, you can even set up additional accounts to fund those, and then also what the cool thing too is on Profit First that if you really want to be a little bit more advanced is you can set up a DRIP account or a seasonal account so you can fund that account to have money set aside for your off season. So unless you’re like in Florida or somewhere south where you’re literally are mowing grass all year long, if you’re a company that offers all services, lawn care, landscaping and snow removal, sometimes you need to have income obviously in the December, January, February timeframe.
So there’s advanced formulas and features that we coach our Profit First clients on about how to overcome those obstacles.
Sahra Linnemann:
Yeah, once you get the basic set up, kind of step two, because the whole thing with Profit First is the structure. It’s a structure to start with and then you tweak it to suit your individual needs. And your question’s a really good question, Ty, because so many families individually and businesses don’t have emergency funds. So it’s a scary, scary thought that if something major were to happen, you wouldn’t have a way to overcome that hurdle. And our goal with Profit First, too, is we actually take that profit account, so that money you’re shuttling away to profit, you get to as its owner reap the rewards from that quarterly. You get half of it. And with the other half is that’s going to continue to build until you have three months’ reserve. And that way you’re going to have a little built in nest egg so that should something major happen, you don’t have to worry about it.
Ty Deemer:
Yeah, that’s a great point. I think it’s just like, to me what it sounds like the response is it’s just like, it’s built in. There’s preparations built in for the unexpected and you have to create safeguards for yourself so you know that you’re not going to pull from an account that-
Sahra Linnemann:
Exactly.
Ty Deemer:
… you’ve committed other funds to. That’s great.
Sahra Linnemann:
Yeah, so you do have to be disciplined on it, but we also kind of build that in, too, because those profit and tax accounts that Adam referred to, you also have vaults. So you have a profit vault and a tax vault, so they’re out of sight out of mind, you’re not looking in the bank account saying, ooh, look at all that stash I have in there and tempted.
Ty Deemer:
Yeah. For sure. So what have been some of the success stories of Profit First of whether it’s your own success story, like what, when people begin shifting to this type of mindset and really implementing it well, what has it meant to you and what has it meant to the people you work with?
Adam Linnemann:
Well, I can-
Sahra Linnemann:
Just yesterday.
Adam Linnemann:
Yeah, just yesterday. But I can attest, we have, what, six or seven Profit First clients that we’re working with, and just recently I analyzed a couple of the most recent ones that we had some coaching calls with. And I know one company we literally have moved their needle from a profit tilt to 11 points into the positive, and then the most recent one, just-
Sahra Linnemann:
So they had, let’s clarify what you mean by that. They had an 11% shift in profits.
Adam Linnemann:
Well, and by doing that, by helping them reduce their operating expenses and setting money aside appropriately for these other bank accounts that we have set up for them. And then the most recent one that we had a coaching call with yesterday, they actually were moved by 15 points, actually. So believe it or not, they were at a point to where they were, what was it, negative 13% was it-
Sahra Linnemann:
Yeah [crosstalk 00:20:07].
Adam Linnemann:
… on the profit side. They were literally funding the business out of their own personal money and now they’re showing a 2% profit just with working with us over six months. So we shifted from that negative 13% to a positive two, and so we did a 15% swing in just six months.
Ty Deemer:
Wow. That’s really incredible. And what … That does have to have an impact in other parts of the business, too, apart from just the numbers, right? Because if you’re an owner trying to lead, do you see the impact of that stress being removed and how they’re able to lead their teams as well?
Sahra Linnemann:
Yeah, and happier relationships. At home and at work. It definitely is a stress relief, and for us it’s so, so rewarding to see … We get to meet with them and everyone’s happy and smiling and just the whole demeanor is different and I like to, because that trickles down to the entire team as well. Because I mean, who is … it’s infectious when people are in a good mood. Or bad mood. Either way. So if we can help that flow through them to their team and then it’s just a cyclical effect, right? Then everyone’s happier, everyone’s working harder, everyone’s getting the job done, and they’re all part of the team.
And sometimes that’s even means profit sharing, too, because that’s an option for any business, too. So it’s very rewarding for us to be able to see someone, especially when they’re living in that crisis mode. Because we know how stressful that can be as a company when you’re running to the mailbox every day. So to get out of that and to not have to go to the mailbox today, and not worry about it, and know that the money is there and accounted for and not be stressing when it’s tax time, that is such a good feeling for them and for us.
And at the same time I want to point out that these people are in major crisis mode, so they’re seeing huge impact. Anybody can see these impacts, whether they’re in crisis mode or not. When we started Profit First, we were not in crisis mode. So we started implementing Profit First around that same time that we discovered it for our clients and it’s just truly a shift, and in going through the process you examine different components of your business and it just gives you a reason to reflect on if your good-intentioned purchases still make sense.
Ty Deemer:
Yeah. Absolutely. Well, the results speak for themselves. That’s really cool, and it’s just mindset that I can just so see the benefit of anyone listening to this podcast if they’re not already doing something like this, they should be considering it for sure. I want to shift our conversation a little bit, but it’s kind of in the same light. Adam, you recently posted on LinkedIn talking about offering services you’re passionate about. And I think it’ll be interesting to hear your take on why that’s so important, because it does seem, too, you mentioned at the top of the show that you actually have shifted away from offering residential lawn services much. And if you’re passionate about profits, then you’ll be passionate about shifting your services towards those.
And I think we’ve all heard that sometimes lawn care isn’t the most fun service to offer. It’s what the crews are least engaged with. But what is the balance of offering services you’re passionate about versus what services are the most profitable, and where do you think that lies?
Adam Linnemann:
Well, I think … It’s hard for me to kind of explain on the whole mowing situation because that’s grassroots for me. That’s where I started when I was 14 years old. But what we’ve done over the years is, like I mentioned, is we purposely have downsized the mowing, we’ve shifted our billing procedures on that. So for instance, we used to be invoicing out once a month for every time we would do a mow. Sometimes it might be three times a month, sometimes it might be five. But that was how we kind of did it then. We shift from that over to a monthly budget-friendly pricing. So what we’re doing now is we know we average 28 to 30 cuts a year here in the St. Louis market, and let’s just a lawn is a 50 or a $60-a-week cut. For round numbers we would look at, okay, this is $1500 a year, we’re going to bill the customer over nine equal monthly payments.
That was a huge help for us for several reasons. Number one, it allowed cash flow to start coming in earlier in the year when we started invoicing March 1st, because we don’t usually mow until the end of March. Number two, it allowed us to streamline and know what kind of income we’re going to be able to have for the year because we’re able to project that a little bit better. And last but not least it allowed us to hopefully allow the customer to not have to call in and say, oh, skip my lawn this week or things like that because it allowed us to kind of have a little bit more control.
So yes, we’re passionate about all of our services, but we really try to tweak the ones that we weren’t as passionate about and try to focus more on other projects like the design-build and so on.
Ty Deemer:
Yeah, and-
Sahra Linnemann:
Your attention-
Ty Deemer:
Go ahead.
Sahra Linnemann:
Your attention can only go so far, right? You can only pay attention to so many things, and if you’re offering a litany of services, some of them are not going to be very good. It’s just a fact. You cannot offer so many things that are in your control in your span. Now if you’ve got people who can help you, all the better, right? Then they can give it their focus. But if you’re really as a company saying, this is where we want to make our money. And you’re knowing your numbers, you’re seeing those ins, where those ins are coming from. And you’re looking at the outs, what’s got the least amount of outs and the most amount of ins. And that’s going to tell you where you’re profitable.
So if those profits align with the services you enjoy doing, that’s where you naturally have to go. If they don’t, then you have to make that decision, right? You have to sit and think, okay, am I going to follow the money or am I going to follow what I really enjoy? Ideally you can both by letting somebody else in your employ or on your staff, part of your team, do what they enjoy and you still focus on what you enjoy. So there can be a happy medium there.
Ty Deemer:
Absolutely. Yeah. Because we’ve had conversations on this show in the past where I’ve talked to people that have said, specifically in the design-build space that sometimes they know that the job that they’re taking isn’t as profitable as other work that they could be doing, but they enjoy the work, and it’s like, what they love about what they do. And there does just seem to have to be this balance of recognizing yes, do the work that you love, but make sure it does make sense for you at the same time.
Sahra Linnemann:
Well, and that’s the thing. When you know, then you’re able to make that decision. It’s when you don’t know what work is profitable and you’re continually doing work that you enjoy but you’re not making money, that’s when long term you end up in a little bit of trouble.
Adam Linnemann:
You know, Ty-
Ty Deemer:
For sure.
Adam Linnemann:
… I’d like to talk about, too, when it comes to like mowing services, let’s just say you’re making a 10% net profit on mowing someone’s lawn. The problem with that is is that you’re visiting these properties 30 times a year and, like I said, if you’re doing $1500 for the season or whatever it may be on a $50 cut, your 10% is going to be $150. You know, you go one window and you done lost for the whole year, you know what I mean? Any profit that you may have had. So that’s why we like to start kind of shifting more towards the design-build projects, doing projects that are five, 10, $20,000 dollars in sales and be able to hit those 15, 20% profit margins on those jobs, be in and out in a week or so and we feel like we’re so much more further ahead in profitability and sales than we would be with doing things such as mowing.
Ty Deemer:
Yeah. Absolutely. So, shifting the conversation a little bit when it talks about, talking about growth in general. New work. What do you believe is the most effective way to grow your business? Is it marketing all of your services to your current customer base or is it trying to expand your market within St. Louis or where you’re at?
Adam Linnemann:
I would say we very much like to focus on a tight route or a tight service area. So we really won’t go traveling very far outside of our service area. Even though we are literally 11 miles south of St. Louis, our whole county that we do work in is only 45,000 people. But what we like to do is we like to service a smaller area and demand higher profit-
Sahra Linnemann:
Dominate-
Adam Linnemann:
… dominate and demand higher profit margins by just doing quality work and being reachable, reliable and ready. And just being the service provider or installer or project work, really, is kind of where our focus is kind of more or less going to.
Sahra Linnemann:
It is interesting, though. It’s an interesting question because in our own numbers we were looking over 2020 in the last year, and it seems like from a marketing perspective, of course we stay, we have our routine of letting our current clients know, hey, what’s coming up, what services are we’re getting geared for, offering and they kind of know the routine, I guess, is so to speak. And we have the routine down of touching base with them when those things are happening, you get a newsletter and all these things.
But as far as new marketing it seems like we’re focused towards new clients, and then when we looked back at the past year and looked at how many projects, seller-wise, were for brand new clients, we were surprised that the vast majority of our revenue had come from existing clients. More so than we expected. So it’s just an interesting, that our mindset was towards paying new marketing, but really it’s our existing clients that are proving to be, and I think that’s probably a general [inaudible 00:30:10] for a lot of people. Your existing clients, you’ve already got that relationship. So it completely makes sense, but just the bigger projects we were surprised at how many still were coming from our existing clients.
Ty Deemer:
Yeah, and that’s kind of why I asked the question. Because if I hear one thing consistently talking to people in this space it’s that that is such a missed opportunity for so many landscaping companies out there is to just truly market towards their current customer base. Not in a way that’s overly aggressive, but just friendly reminders that you’re an advocate for their property. One of the best examples I’ve seen is that, a landscape company that was on the show, their owner talked about how, he just at it as part of their system to ride around a certain service area like once a quarter, twice a year, and just go around the property and offer just free estimates to people for different projects and be like, hey, we noticed this on your property. If you want us to do it, we’ll do it. And just sales skyrocketed because they’re like, oh, thank you for telling me that that’s something that you can do for my property.
And especially if you have a great relationship with your customers, it’s a pretty easy sell.
Sahra Linnemann:
That’s an awesome idea. I think that’s a great idea, and it just builds that relationship even further. Even if they’re not taking it then, then they realize that, hey, you’re not just here to come and go. You’re here to help me. And I love that phrase you used, advocate for their property.
Ty Deemer:
Yeah, and that’s, to your point at the beginning of the show, Adam, software can be a huge key to that, right? Like a lot of that can be automated. You don’t have to go in and be like, oh, I’ve got to email the Johnsons on Thursday. No, like you’re going to have it at a built-in cadence with your software that says, hey, your six-month check-in for the Johnsons. There it is. And it’s streamlined. So that’s great.
I do like to ask this question to guests and I think you all will have an interesting perspective of it because you talk to people about profitability and what it looks like. And we just talked about selling. What do you view, like most landscapers, what’s one of the biggest mistakes companies make when it comes to business development?
Adam Linnemann:
Well, I don’t know if this is going to directly answer your question, but I would like to talk about what landscapers are truly selling, and that is not patio installs and lawn mowing. What they’re truly selling is their time.
Sahra Linnemann:
See, and I have a little bit different take on that. I think you’re selling the atmosphere, the joy that that patio can bring them, the family time, the glamor of that. But your commodity is time.
Adam Linnemann:
Yeah. So we talk about time a lot, Ty, and how we like to explain it is if you go to like a Best Buy store, right? This is your example, Sahra. But if you go to a Best Buy store, what is Best Buy’s inventory? It’s their Xboxes, their DVDs, their TVs they sell, all that stuff. And how do they protect their inventory? Well, they protect it by a point-of-sale system, they protect it by security cameras watching the floor, they protect it by the security guard at the gate.
Sahra Linnemann:
They do inventory every so often.
Adam Linnemann:
They do inventory every so often.
Sahra Linnemann:
All the things that-
Adam Linnemann:
What a landscape company’s inventory is and what they’re selling is time. And as much billable time as you can get out of your team, the better off you’re going to be. So we like to talk a lot about that and to try to mention and talk to the team about how we can reduce unbillable time, how we can increase billable time, and just create more efficiencies to get the most out of our day.
Sahra Linnemann:
It goes back to those pennies, right? When you save the penny, dollars follow. When you save those minutes, the hours follow. And those hours aren’t only saved, but they can be flipped into billable time. And that’s where I think a lot of companies lose out in sales because, oh shoot, the team forgot to get a shovel and now of a sudden all three of them are driving back to the shop to get it, and that’s three people times how ever many minutes times how ever many times that happens. And that’s huge. So those few minutes add up, and I think flipping those lost minutes into billable hours increases your sales much more than your standard person realizes.
Adam Linnemann:
I was talking with a nice lady on a landscape Facebook group the other day, and we were chatting about unbillable time, and I said, well, I’m just curious, in your estimates are you charging for your drive time, your logistics? And she was like, no. I was like, well, I think you should probably be charging that for your load time, your picking up material time, your logistics of driving to the job site. I always tell a friend of mine or people around here that may have a project or a second home a couple hours away, if you really want me to come out and do a project for you I can, but I have to charge you for logistics and drive time.
But that’s no different than a customer that’s 15 or 20 minutes away. We factor that into our estimating process because we’re selling time, and that’s all part of the estimate.
Ty Deemer:
Yeah, and some people are even charging for estimates now. They’re charging for their time to go out and spend time on the property. I love that you talk about time because I think that’s something that, in general talking to people in the green industry as a whole, that’s something that I don’t think they realize how valuable their time is. And talking about setting profit for yourself, just like money is a commodity that you need to set aside for yourself, time is a commodity that you have to set aside for yourself. And we talk to our customers all the time, like, you shouldn’t be scheduling and building estimates at 9 PM at night. You should be hanging out with your family, and you should-
Sahra Linnemann:
Right. You should be living the life that everybody thinks you’re living as an entrepreneur.
Ty Deemer:
Yeah.
Sahra Linnemann:
Everybody thinks you’re rolling in it and have all this time off, and there are benefits, don’t get me wrong, there are benefits. But back to those statistics that Adam mentioned earlier, we know the reality is most entrepreneurs are not living the life that everyone thinks they are. And that’s our goal. We want you to live the life that everyone thinks you’re living.
Ty Deemer:
Absolutely. So I have like one or two more questions before we go. I like asking this and I think y’all’s take on it will be so interesting because of the journey of running your own business attempt then helping other people run theirs. If you could go back in time and speak to your younger self, what would be the one piece of advice that you would give?
Adam Linnemann:
I would say just understanding that you’re selling your time and to make sure that every job is bid profitably. Once again I go back to the whole mowing thing. And actually I was going to talk about that coming up, we do a free advice Friday Facebook Live at The Green Executive. And that’s something I want to talk about tomorrow is that if I would have known that I am not making money or making literally very, very, very little profit mowing grass back four, five, six, seven years ago, I would’ve not have been mowing grass as long as I did. So for us, that was one thing that … Just understanding once again, your break-even, your cost and your selling price, what that should be is I would say is the biggest thing that I would be a takeaway.
Sahra Linnemann:
Yeah, from a business perspective I would agree with that. If earlier on we could’ve [inaudible 00:37:29] and honed in on, like we have over the past few years. We’ve reduced personnel, so we’ve, our outs are much less but our ins are just as much if not more, and so the profit there is much higher. If we had realized those and started to take those steps from the beginning, then we would be in a much better place right now. But … Not that we’re in a bad place, but just continuing to hone in on it we would have been that much further ahead.
And I think that’s really what spawned The Green Executive is our desire to help people fast forward through that. Because we weren’t sure, it took us a lot of years to realize it and now if we can help someone skip those years, all the better.
Ty Deemer:
Absolutely. So that’s a great segue into kind of my last question is we spend a lot of time on this podcast reflecting, thinking about things that went on in the past or decisions we’ve made and how it’s taught us lessons. What comes next for the both of you and your landscape company and The Green Executive, and what are you most excited about going in to the rest of 2021?
Sahra Linnemann:
Good question.
Adam Linnemann:
Mm. It is a good question because I’m thinking like 10 years from now.
Ty Deemer:
Uh-huh. Well, you can answer that, too. Big picture.
Adam Linnemann:
Well, I mean, and my goal, and I’ve been talking about it actually quite a bit lately is my goal is to really start considering in the next five years at least that when I turn 50 or at the age of 52 is my plan is to retire at the age of 50 or 52. So how am I going to do that and what am I going to, and how am I going to that and what’s going to happen basically with the lawn care and landscaping part of the business? At that point in time, our kids are currently 9 and 11, I guess we’ll know if they have interest in the business. But my goal is to retire early and to either consider selling the landscaping business, letting the kids run it if they have interest or perhaps hiring someone like a general manager to run it for us, and then to continue to consult with The Green Executive through retirement and so on. Because we like to travel and-
Sahra Linnemann:
And that’s what makes it a really-
Adam Linnemann:
… visit the other landscapers.
Sahra Linnemann:
That’s what makes it a really interesting question is that I love to work. I would work all the time, so he wants to retire, and I’m not sure how that’s going to work between the two of us because I’ll be working, but … It’ll be fine. We’ll figure it out.
Adam Linnemann:
Yeah.
Sahra Linnemann:
Yeah. I’ll keep going. I’ll keep churning out.
Adam Linnemann:
You know, back to what our goal is for 2021 and the short term, I would say it’s really just to help other landscape business owners eradicate entrepreneur [inaudible 00:40:04] in their businesses. It’s to help them get out of debt, it’s to help them understand that really their profit and loss statement doesn’t mean a whole lot because you have to take into consideration your balance sheet. Your P&L could say you’re making 15, 20%, but if you’re so much in debt on your balance sheet, that’s not good, right? So it’s really to help them just understand finances more and help them take their money to more perspective and have more clarity with their finances.
Ty Deemer:
For sure. So if someone’s listening to this episode and this conversation has sparked their interest, they’re like, oh, wow, I really need to kind of get my numbers in check and understand my profitability, how could someone interact with you or Sahra and talk to The Green Executive about putting Profit First in their business?
Adam Linnemann:
Sure. Our general website is thegreenexecutive.com. Or they can simply visit also profitfirstpros.com, and they will send it directly to us. And we’re also on social media, LinkedIn, Instagram, Facebook and all those.
Sahra Linnemann:
Hmm. All the things.
Ty Deemer:
Absolutely. We’ll be sure to link to some of those in the show notes of the show. But Adam, Sahra, thank you so much for coming on. We talked about a ton of interesting topics today. Profit First, sales decisions, deciding what services make sense for you from a preferability perspective and a profitability perspective, so thank you so much for joining it, and I look forward to kind of seeing how the next year and beyond go for you all. Hopefully you’re sitting on a beach sometime soon.
Sahra Linnemann:
Oh. We plan to.
Adam Linnemann:
End of July, right, Sahra?
Sahra Linnemann:
Yeah, we do. We definitely do plan. And that’s a big thing, to just not be chained to the business. That’s been our goal for a lot of years and now we’ve accomplished that, where we can go on vacation and be free for a while and The Green Executive is there as well, so.
Ty Deemer:
Absolutely. Well, thank you again for joining us on the show and we’ll be in touch soon.
Adam Linnemann:
Thanks, Ty. Take care.
Sahra Linnemann:
Thanks.
Ty Deemer:
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, and don’t forget to tune in next week.