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Green Dreams Our experts show landscaper David Knauff how to quintuple his revenues.
(FORTUNE Small Business) – David Knauff is a pretty big landscape gardener in the posh northern suburbs of Chicago. His company, Yes, We Care Landscaping, does nearly $2 million a year in trimming, planting, and landscaping for upscale clients such as the Chicago Botanical Garden and the city government in Knauff's hometown, Wilmette, along with dozens of luxury homes and apartment complexes. At 29, the cherubic CEO sees lucrative opportunities ahead. Knauff hopes to grab a much bigger share of what he estimates is a $2.3 billion local market for landscaping services. (His biggest competitor collects about $20 million a year.) "I want to do what Michael Dell did with computers and make landscaping affordable for everyone," he says. He wants his 38 workers, including the lawnmower operators, to become killer salespeople. He wants project management software that will let him track costs and beam estimates through the ether in real time. And he wants to quintuple his revenues over the next five years. This guy dreams big, but he's the first to admit that focus and discipline are not his strongest suits. "My modus operandi is procrastination," he says ruefully. Knauff's managerial weaknesses have led to some expensive mistakes and inhibited his company's growth. He thought he could use professional help, so FSB enlisted three crack consultants to help transform his dreams into reality. Steven Feinberg is an industrial psychologist with Mica Management Resources, an organizational development firm with offices in Chicago and four Canadian cities. Jonathan Copulsky is a marketing consultant at the Chicago office of Deloitte & Touche. And Gary Wiessinger is a senior software developer at Intuit, in charge of new applications for building contractors. Knauff never planned on a career in landscape gardening. He founded Yes, We Care at the tender age of 14, after his parents told him he had to earn money to pursue his real, and expensive, passion: golf. So Knauff started mowing the lawn at a nearby church. He ran Yes, We Care from his bedroom throughout high school and later kept it going via faxes from his college dorm. After graduating from Michigan State in 1998 with a degree in horticulture and landscape design, Knauff moved back home to Wilmette and started running the business full-time. And that's when things got complicated. Knauff's parents had been plenty supportive all along. His father, who is a printing company executive, is also a virtuoso auto mechanic, and he kept Yes, We Care's trucks running for several years. Knauff's mother, who runs a successful executive-search firm in Chicago, was his advisor, mentor, and occasional fax machine operator almost from the beginning. He borrowed heavily from his mother and relied on her credit to arrange more loans. Much of that debt remains outstanding. Knauff expanded quickly, acquiring three rival companies in three years. But that only burdened him with too much equipment, too many managers, too many salesmen who didn't sell, and lots of money-losing contracts. Yes, We Care earned about $25,000 in 1999, but then the company plunged into the red, losing half a million dollars between 1998 and 2002. Last year, after he cut several expensive employees and learned to bid more sensibly, the company earned about $100,000. Industrial psychologist Steven Feinberg, 57, is a wiry, serious sort. As he settles down in Yes, We Care's sprawling offices in a tired section of Wilmette, he lets it be known that he is not to be interrupted while he interviews Knauff. Knauff readily admits that he started the company to feed his golf habit. "I didn't even realize it was a business until someone pointed out that I was helping half a dozen people support their families," he says. But under Feinberg's patient questioning, Knauff acknowledges that Yes, We Care also filled an emotional hole in its founder. "I was a short, fat kid without a lot of friends until I started this," he says. Knauff also speaks at length about the emotional and financial support he gets from his mother. He feels honor-bound not to let her down, he says. Feinberg listens intently but makes few comments. Soon Knauff is talking about his attention deficit disorder, which makes it difficult for him to tackle dull, repetitive chores such as cost accounting. Asked to rate himself as a manager, Knauff gives himself a "B or B+" overall. But "at systems and paperwork I'm only a C-," he admits. And, yeah, he's "too nice" with staff--at first. "I let people walk all over me. Then I suddenly get confrontational." As a result, he has always had trouble retaining white-collar employees. But Knauff lights up as he describes how much he loves selling dazzling landscaping proposals to new homeowners. Asked to lay out his vision, he eagerly discusses plans for spinoff companies that would install irrigation systems, brick walls, and driveways. But he also makes the surprising admission that he wants to be out of the landscaping business altogether in ten years. "I would love to be CEO of Harley-Davidson or Porsche," he says. More than an hour into the meeting, Feinberg is finally done asking questions. He starts off with praise. "I'm struck by your energy, enthusiasm, optimism," Feinberg says. "Risks don't bother you." Then he turns to the less pleasant news. Knauff is not taking his company seriously enough to turn it into a $10 million business, Feinberg says bluntly. The consultant points to the back wall of Knauff's office, which is lined with large black-and-white logos for the paving and irrigation companies he hopes to start. To Feinberg that wall symbolizes Knauff's lack of direction. Another red flag: Knauff relies heavily on the advice of informal (but hardly neutral) advisors, notably his mother. Feinberg urges Knauff to create a formal advisory board. "You can't work with family forever," he says. How to find board members? Call area business schools and see whether any faculty members might agree to serve. Enlist business-savvy customers and offer to tend their lawns in return. Knauff may not find it easy to work under that kind of oversight. But the young man must focus on his goals if he truly wants to become the landscaping king of Chicago's northern suburbs. Marketing Guru Jonathan Copulsky, 49, is an amiable, chatty man, sporting a well-trimmed beard. Knauff starts baring his soul almost immediately after Copulsky walks into his office. "Steve Feinberg thinks I view [my business] as a hobby," Knauff laments. "I've got to change gears." But Copulsky mostly leaves Knauff's head alone. Instead, he tears into the company's uneven financial performance. It turns out that the boss has never had a good grip on how much his landscaping services cost to provide. Knauff's expansionary zeal prompted him to underbid some big jobs. In one especially painful case, one of his rivals offered to landscape a mansion for $250,000. Knauff came in at $150,000 and wound up barely breaking even. Repeatedly, customers would tell his foremen that Knauff had okayed a new sidewalk or row of bushes. The crews would do the work without checking at the home office, and Knauff would wind up footing the bill. "I gave away a quarter-million dollars from change orders I didn't keep track of," he admits. Moving to the sell side, Copulsky and Knauff kick around a few sample ad campaigns but ultimately agree that upscale suburbanites react poorly to direct advertising. Instead, Copulsky advises Knauff to schmooze local real estate brokers, who can recommend his landscaping services to renovating sellers and new homeowners alike. With a little effort Knauff could also turn satisfied customers into a marketing network. Knauff could even draft his own reference letters for customer use, Copulsky suggests. More broadly, Copulsky urges Knauff to stop managing by the seat of his pants. Copulsky draws a revenue line wiggling upward from left to right that represents Knauff's aspirations for the next five years. "Ask yourself what you will have done to get here," he says, tapping a point on the line. "How many tractors? How many drivers? What borrowing? How many new contracts a month will you have to sell? This kind of thing keeps you honest." Recognizing that analyzing cost data isn't Knauff's idea of career satisfaction, Copulsky tells him to contact the Levy Institute for Entrepreneurial Practice at Northwestern University's business school. The institute often assigns MBA students to help small businesses. In exchange for college credit the students perform a raft of gnarly quantitative tasks. Copulsky warned that Knauff's freewheeling personality might impede his growth plans. "Be careful what you wish for," he says. "Some people are in small business because they don't work well in a big business. If you want to go to $10 million, you have to be very disciplined, or you can get yourself in a lot of trouble." What about Knauff's dream of a killer app for landscape gardening? FSB contacted software giant Intuit to find out what products might be available. Senior developer Gary Wiessinger spent an hour on the phone with Knauff, grilling him on his tech wish list. Knauff wanted the moon: Instant cost analysis that would allow him to submit bids right at the job site. The ability to zap directly from proposals to work and scheduling orders. All running on wireless PDAs and laptops. Wiessinger went to work. A few days later he came back with a live, animated web presentation that showed Knauff how to pull his costing and bidding together using a wireless network of portable computers. Estimated cost: $3,000 for the software and another $15,000 in laptops and PDAs. Our consultant dream team left Knauff sobered but unbowed. One week after his makeover, he told us that he had already asked a venture capitalist customer to join his advisory board and help him recruit other advisors. "Nobody from my family will be on my board," he says. He also plans to call in analytic backup from the Entrepreneurship Institute at Northwestern. But at the end of the day Knauff understands that his main challenges lie within. "'Focus' is the magic word," he says. "I'm trying to designate times or days in which I do certain tasks. Do one thing. Do it well. Finish it. And move on." Now there's a maxim we can all live by. Watch for updates on the landscaper's progress in future issues of FSB. |
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