The various segments of Suburban Lawn & Garden make it profitable
Suburban Lawn & Garden is a $21 million, multifaceted business, with a garden center on 14 acres in Overland Park, Kan.; a combination retail/wholesale garden center on 40 acres in Kansas City, Mo.; 580 acres of growing facilities producing approximately 80 percent of their combined retail and wholesale plant sales; and a yard waste and recycling center that produces mulch and compost products for resale.
Matt Stueck, manager, says, “We’re continually analyzing all of our operations, and have allocated the majority of our efforts and resources on three main segments: retail, wholesale and growing.” Sharpening the focus led to phasing out the landscape and irrigation design and installation services and some cutbacks in the maintenance division, with the majority based on the cost-effectiveness of servicing specific accounts. The maintenance services now contribute about 10 percent of total revenues.
Stueck says, “We’re always seeking new lawn service customers, but we don’t advertise aggressively. In part, that’s because we don’t want to jeopardize our relationships with our wholesale clients who provide similar services by directly competing for the same accounts. We do list our services on our Web site, and the managers of those divisions do pursue new business, as well as solidifying relationships with our existing customers.”
Suburban’s landscape maintenance incorporates three divisions. One focuses on inground sprinkler repair and maintenance, including spring startup and fall shutdown and backflow certification. Trucks are equipped with parts for the major systems installed in the area, enabling most service calls to be completed in a single trip. Both stores also carry sprinkler system repair parts for the do-it-yourselfers.
The lawn care division handles the basic five-step lawn care program covering fertilization and weed control. Lime applications and control product applications for insect and disease problems are offered as add-on services on an as-needed basis. Tree and shrub rootzone fertilization and applications for insect and disease control are also handled by this division.
Manager Jeff Hemmen coordinates these services and those of the turf-related component of the maintenance division. That encompasses the mowing, spring and fall lawn cleanup, aerification, dethatching and seeding. He says, “We’ve found that having one individual coordinate this group of services gives us greater flexibility in scheduling and more effective use of personnel. Along with the scheduling, I set up the treatment programs, order the chemicals and create the documentation, including everything required to ensure our applications are in compliance with the laws of Missouri and Kansas.”
Hemmen says the maintenance areas related to enhancement and beautification also are coordinated by one individual, Manager Sharon Trimble. He says, “Those crews handle regular detail work, including the trimming and weeding of landscape beds, seasonal color changeouts in flowerbeds and container plantings and shrub pruning. She’ll also work with any add-on landscaping projects for our full-service clients and has a highly trained specialty crew to do the installations.”
Suburban currently services approximately 250 sites that only receive the five-step fertilization and weed control program. Hemmen says, “Ninety-nine percent of those are residential. In addition, we have about 150 sites where we provide the five-step program and handle the mowing. Those are a 50-50 split between residential and commercial. The number of sites that we only mow fluctuates between 25 and 50. The tree care program serves about 50 accounts on a season-long program.”
They’ve also tracked efficiencies in mowing and determined their best results are achieved by two-person crews. Hemmen says each of the five mowing crews are assigned specific equipment. Each crew determines what to load each day based on the sites they will cover. The main mower for all the crews is a walk-behind with a 52-inch deck. The second mower will vary from a 52-inch or 48-inch walk-behind, or a zero-turn riding mower. The small area mower may be a 32-inch walk-behind or a 21-inch push mower, depending on the gate sizes of that day’s fenced properties. All crews are equipped with string trimmers, blowers and an assortment of hand tools.
Hemmen says, “I prefer putting the same people on the same properties most of the time, but I want at least two or three crews to know every property so if we do need a backup crew we have one with experience on that site.”
Hemmen has the option of creating a temporary crew or two to take on the aeration, thatch removal and seeding. He can pull available personnel from any of the landscape maintenance divisions, or the garden center or plant production operations. These services are scheduled from late August to mid-October. End-of-season cleanup comes in November, prior to the holidays, and spring cleanup begins as soon as the weather allows it in the spring. Crews also provide snow removal to those within their full-service base that request that service.
Managing for profitability
While it’s essential to see the big picture, looking only at the overall revenues generated by each division isn’t the best way to analyze profitability. Suburban looks at the revenues generated by each worker per hour on the job and compares that to costs associated with the tasks involved. “We have a revenue threshold that varies between $35 and $40 per hour for the services within our lawn maintenance department,” says Stueck. “The travel time is figured separately and factored in. That gives us a good handle on the profit picture for each site.”
Like many companies, Suburban used to lay off most of the landscape maintenance employees during the winter months. However, Stueck says, “Now we try to keep our core group of experienced personnel year-round if we can balance the costs by having them work on projects for our other divisions.”
The offices for the three landscape maintenance divisions are housed in a remodeled barn off site, but near the retail/wholesale center and the corporate offices. There’s a storage room for the lawn maintenance equipment on the upper level. A small engine repair shop is on the lower level, with two overhead doors opening into the service area. All of the equipment for the landscape maintenance divisions is serviced here by two trained technicians. They also service the utility vehicles that staff members use and the more than 100 golf carts that provide customers with easy access to the extensive outdoor plant display area there. Trucks for the three divisions are parked at this site, as are the vehicles used by other company divisions, with the fleet numbering over 200.
Adjacent to this site is the Yard Waste Recycling Center. It was originally created to process grass clippings, leaves, tree limbs and other yard waste from Suburban’s maintenance operations. After analyzing the results of operating on a relatively small scale, the Stuecks decided to make it a business. The site is fenced and there’s always one employee in the check-in building to collect the fees.
The profits come from turning that waste into a variety of mulches and soil amendments, so additional staff members are in the yard overseeing the unloading to ensure all materials are trash-free and useable for recycling.
Continued analysis has also led to extensive upgrades. Stueck says, “We purchased high-tech equipment to make the process efficient and cost-effective. We designed the bulk bin pickup area at the retail/wholesale center for quick and easy access. We’ve developed products, like our color-enhanced mulches, which have increased profitability. We now process over a million pounds of organic material a year, handling all the steps in-house, from the separation of materials, to the color enhancements of the mulches, the processing of the soil amendments and the bagging.”
Suz Trusty is a partner in Trusty & Associates, a communications and market research firm in Council Bluffs, Iowa. She has been involved in the green industry for over 40 years.