Have you ever thought about using acquisition as a growth strategy at your landscaping company, but you were worried that it was too big, or too expensive, or some other reason why you couldn't do it? Well, today I interview some landscapers who have acquired a 55,000-square-foot stone supply business, as a means of diversify their landscape company, and how their mindset around investment has helped them make it possible.
As landscapers, you're always investing in your equipment, and your people, and material. And I love their mindset around how they used acquisition to grow. Plus they have a marketing director, and a technology director. So, what does a technology director do at a landscaping company? And what kind of software is this person implementing. Check out today's episode to find out.
Hey, everyone, welcome to the Landscaper's Guide to Modern Sales and Marketing Podcast. I'm your host, Jack Jostes. And today I'm excited to interview Joe Stark and Adam Swank. He's a repeat guest. You may have heard him in the past talking about how his company uses a CRM to grow their sales. And today he's with Adam Swank, who's the Technology Director. They work together at Ground Works Land Design.
And today I want to talk about acquisition as a growth strategy. Ground Works Land Design is a commercial and residential landscape company in Cleveland, Ohio, who just completed the acquisition of a 55,000-square-foot stone supply company. So Adam, Joe, thanks for coming on the show today.
Joe:
Thanks for having us, Jack.
Adam:
Happy to be here.
Jack:
So, we've been keeping in touch with mainly via social media and email for a while. And one email led to this conversation. And I saw your press release. So tell me a little bit about this acquisition.
Opportunity Found in a Regular Supplier for an Acquisition
Joe:
Yeah, it's quite a mouthful and it was a long press release. But really super excited to introduce to all your listeners, and some of your viewers that we're proudly now part of the Ground Works Stone Design Team. So, Tony Nasrallah, the owner of Ground Works Land Design has always been an opportunist. He's always had that entrepreneurial background, and always looking for ways to provide more revenue streams to his current landscaping and business.
And this opportunity came about out and he just couldn't pass it up here in Cleveland. We can only work about 100 days of the year because of course the cold winter months, provide a challenge when it comes to trying to work outside. And we really thought that eventually getting our ways into the interior space of the residential, and commercial accounts that we work on was the next step.
Originally, we were very interested in the building itself, but the specific deal was, "Hey, it's the building and the company, or nothing at all." And like I had mentioned, it was kind of the stars aligning really. It's okay, "Well, if we take the company, it's a granite marble court side company. We're using that product already in our beautiful outdoor spaces. And it's also, again, an opportunity to get inside the customer's home and continue to work, and continue to create larger projects for them."
Jack:
Tell me a little more about the stone supply aspect of the business. How much of that business is actually doing installations inside people's homes? And how much of it is just providing supply to maybe even other landscapers, or other contractors?
Joe:
Yeah. No, I'm really glad you asked that. So, it allows us to be a vendor and an insulator. So, here in our hyperlocal market, there's not many people that do what we do, but there's three things that we offer as a stone supplier. So, not only are we a showroom, and a warehouse where you can come walk through the aisles, and see all the beautiful large slabs of stone. We also fabricate in-house. So, I'm looking out the office window right now, seeing the guys polishing and templating using machines and the water saws.
And then thirdly, we install. So, the moment they're done templating it to the exact dimensions. We have install crews that go out to the site, and install right away. And that's rare in our area. Because a lot of the large suppliers they're really just suppliers. So, you would have to go pick out a stone slab from somewhere else. And you'd have to ship it using logistics and more money to a place that templates, fabricates, and installs. So, we call ourselves a full service stone supplier, meaning we're supplying, fabricating and installing. And we can do that. We're averaging about three weeks right now.
Jack:
Wow. That's incredible. And so how much overlap is there with the existing landscape market for your... I'm assuming, well, actually probably your commercial landscape clients as well, are probably buying stone as well.
Joe:
Yeah. And actually, we're seeing it more in residential specifically, just so many outdoor living spaces when the weather allows us to. But it's funny and that's kind of where we started to notice this overlap that was going to happen. Because we used to buy our stone from this supplier right here, who we now own. On our outdoor kitchens, on our countertops, the customers that want the drastic bars right next to their swimming pools.
So we saw it happening already. And quite frankly, this now allows us to be our own supply chain. We're not going elsewhere. We're not going outside, and having to pay more money, and the markups to get the stone. We're using our own supplies, which is a pretty neat thing to see.
How the Transition and Rebranding Affected the Acquired Company
Jack:
I love it. And so what were some of the... What went well during the acquisition that you can share and maybe what were some of the challenges?
Joe:
I definitely want Adam to talk a little bit about this because he played a huge role in the operations, but I will say quickly we rebranded, acquired, and made the announcement all at the same time. So, don't quote me on this statistic. But I heard something, I think it was in Forbes that somewhere between like 74% of companies that recently acquire another company, they don't touch, change, rock the boat and definitely don't rebrand, or change the name of the company they acquired for two years.
So in 24 months everything is staying exactly the same. And that gives the company that just purchased the new business 24 months to kind of get everything together. This happened very, very quick. We had been talking to the company since April. But when it really got down to the nitty gritty, it moved very fast. And due to a number of reasons, we thought it would be best from a reputation standpoint to rebrand immediately.
So, I think the biggest struggle that marketing saw, or just the public saw was, "Hey, first we need to get the name out there that this is now part of our business model. But two, we're also introducing this new name to the public." So, going back to all the notes that are in your book, the Google My Business, all of the major social channels, all of that had been picked up, and was recognizing the old name. So on also gaining steam for just making the announcement. We also had to do it properly, and strategically. Because we had to announce, including this new name, which is Ground Works Land Design.
Jack:
I was actually just looking at Google Maps and it looks like you're going to have two Google listings. So, you've got Ground Works Land Design, and then we've got Granite Works Stone Design. Is that the plan is to keep them their different brands? They're different.
Joe:
So, two different entities, but all working under the same kind of managerial financial system, which we can talk about in a little bit, but the master plan that we haven't even talked about when I was mentioning moving facilities is we want both businesses, both Ground Works and Granite Works to operate under the same roof, which is this new building that we acquired the 55,000-square-foot facility. So, we had to jump back and forth and learn a little bit more than we wanted to about how Google My Business works, and verify tax documents and all of that.
Jack:
Yeah. Okay. So you've got two different Google listings, and they're under the umbrella of a new company. But before we get to that, or maybe this is part of it, what were some of the challenges of the acquisition? So, one was around marketing. And you must have some really ambitious marketing director, who's like, "Hey, we're getting this all done right away." I mean, that's a lot of work to do with all the digital stuff, the print. Do you have signage out there?
Adam:
We have temporary signage.
Jack:
Temporary signage.
Joe:
Yeah.
Adam:
Yeah.
Jack:
What were some of the other hard parts about the acquisition that you're realizing really.
Joe:
When you're walking into a new business, everybody operates with their own kind of style and functionality. So, coming in getting a grasp of how the business was run. And really taking the pieces and parts that have really made our business Ground Works successful and trying to implement those. So, lots of times in order to have to fix a problem, you've got to really address it, find what it is.
And lots of times that isn't easy. Lots of people have to kind of admit things that they failed in the past. And then we've got to really admit some other failures. So, it's a team effort. It's a lot of digging in and finding some skeletons in the closet, so to speak. But you get through it. And once you've got that, you've got a much better understanding of the business, and then really a path forward to grow it the way that you want.
Jack:
Excellent. And I'm curious, how many employees worked at the stone business? And what do you what's going to happen there? Did they know this was coming? Or was it all of a sudden like, "Hey everyone starting today, we're this new company. And I'm your new boss?" How was that? So, it sounds like the marketing rollout was fast. How did the internal communication go?
Joe:
Yeah. I mean, we try to be as transparent as possible. And obviously there were many meetings that Tony were a part of that Adam and I even were a part of. I mean, everyone's just trying to keep up and stay in their lane, but we made an effort to communicate with the current staff, and the previous staff as much as possible. And since we had been in conversations since April, Tony, the owner of the company kind of had the luxury to stop by, and visit quite a bit, introduce himself, learn almost work with the old owner in almost an apprentice way.
But to answer your question, there were 11 staff members when we acquired the company. And we retained nine of them. So, it was never in our game plan to come in here and just clean house. Quite honestly, like the experience that some of these folks have is the most valuable part of the business right now.
I think the least amount of time spent here on any of those nine employees is six years. And I think the most is either 12 or 14, but yeah. I mean, these people have quite a bit of experience with the stone industry. And again, I mean, we came in and we wanted to better the model that we currently have. We had done a lot of market research and just kind of looking at the numbers, looking at the market, and then looking at our amazing reputation that we have and the credibility that we have with Ground Works. It was one of those that fist to forehead moments where it's like, "We could be doing a lot better. They could be doing a lot better.
The idea was to just buy our current systems, our current SOPs, and really just accelerate what was already happening.
Adam:
Yeah. And to piggyback off of that, I've been through a couple of acquisitions in the past. And one of the hardest things to go through is getting company buy-in from the organization. Lots of times they have bad tastes in their mouth from being bought out. And who are these guys? But because of the reputation that we have to Joe's point, they were thrilled. They were excited for the change in ownership, which made your earlier questions. One of the better things that I noticed through the acquisition that was really good, is their buy-in, their ability to get into the systems that we wanted to implement. And just the excitement.
I mean, we have people telling us a week in the acquisition that they've been here 16 years, and this was best day of work they've had.
Jack:
That's awesome.
Adam:
And it changed the whole culture and vibe just by the shift and ownership, and having some trust and confidence and the people coming in.
How a Technology Director Can Leverage Systems and Improve Margins
Jack:
And Adam, you're the Technology Director. I don't know a lot of landscape companies that have a Technology Director. So, can you tell me a little bit for people who haven't heard of you all, whatever you're comfortable sharing as far as revenue, number of employees, and what is a Technology Director do at a landscape company?
Adam:
Sure. I mean, it's different. I mean, if you're seeing a lot more of the technology roles developed and emerge in the landscaping industry. It's interesting where I believe it was the Commerce Department for the government ran a report a couple years ago about technology adoption, and major industries. And landscaping was second to last, only to farming.
So, there are lots of gains that can be made in this space, and operating in the service industry margins are everything. So being able to leverage technology, reduce those margins. And if it's five minutes here, three minutes there over the course of a year, these things really add up. And if you really want to get to that point where you want to scale, and really grow, and the point of this podcast with mentions of the acquisitions, you're not really going to be able to move in and acquire people unless you've got a good game plan to implement, and really push that to a successful place.
So, it's a lot of putting in systems that are more than just band-aids making things that are long-term solutions, and really putting things in a scalable process that are easy to adapt.
Jack:
And so what are some of the technologies that you're using over there that maybe Ground Works, wasn't using five years ago that you're using now that are essential to growth?
Adam:
Sure. One of the things that top of mind is HubSpot. HubSpot, a great CRM tool. I've used it a lot in startups that I worked for. The single source of truth which, Joe's heard me say, over and over and over again, but having a place of information where you could go to time and time again, that you know you're going to get what you're looking for. You don't have to bounce from between two different systems. It speaks with your email, it speaks with your scheduling.
So, that's been really big client communication just in and out of that tool. It's much, much more advanced. And I think what a lot of people are getting in this space, and it's pretty simple to use. On top of that, we've also internally implemented Slack. Which is a great way for people just to communicate, lots of times it's text messages, people walking over to one another computers.
So, having Slack, being able to share files that way is pretty... It's been big for a few people particularly. And then moving into the shared cloud storage. So, really implementing in SharePoint in OneDrive, getting people bought into that system, and being able to share documents, and files and drawings, being able to access things onsite just through your phone. So, it's really tuning up and creating efficient processes and what we're already doing.
We're just kind of laying over technology on top of it, just to make everyone's life a little easier, and be able to track that information. And then we can take that and really make some better business decisions down the road.
Jack:
What about landscape specific software? Because those are just general. I mean HubSpot, Slack, OneDrive could be at any company. What about on the landscape or I'm really curious about stone supply. Do you just have one giant Excel spreadsheet at the stone yard? How do you manage inventory with a 55,000 square foot facility?
Adam:
Yeah. You hit a nail in the head. It's Excel spreadsheet. Yeah. Speaking of landscape, when I came on board, two of the things that we implemented were Vectorworks Landmark. I'm not sure if you're familiar with that. It's a landscape design visualization tool, which I think has really changed the way that we're able to deliver our drawings to our clients.
And really just trying to move more towards really the BIM model, having that information within those drawings, being able to extract that out, and provide that to the clients has really been kind of a robust feature for us. And then we've also brought in something called Site Audit Pro, which is just a basic app that we use for a checklist, and walkthroughs for some of our projects.
So if we've got one of our account managers looking through one of our maintenance counts, and they see an issue with someone left a weed in the bed that they should have pulled, he's able to quickly snap a shot of that, circle it send to the guy, create a report. They've got a picture of it, a little notation, and the next time they're out there, they know where to go to get it. So, those are two kind of quick hitters that have really made a big impact on us that we started using and that are pretty fun tools.
The Investment Mindset
Jack:
So, this idea of acquiring another company, let alone a 55,000-square-foot stone yard, it probably seems way too big for a lot of people. But maybe it's not talk to me a little bit about some of the mindset that maybe our audience could be having around acquiring. What are maybe some of the fears that you're either you all had, or that you're aware people have around acquisitions? And how do you overcome them?
Adam:
I think, with acquisitions, I mean, that's a big investment. And that's really ultimately how you have to look at it. If you look at it as a gamble, it's not going to work. But picking and choosing the acquisitions, making sure that you have the synergies with your business, then you mean everything. It's not necessarily going to work out.
But if you do the planning the market research, like we were talking about, making sure that the space and the opportunity for growth is there. And as long as you trust your process, you should work out. But you mean you can't go and make stupid business decisions and you can't have people in place that aren't you going to get you where you need to go. But yeah. I mean, it's not an easy thing to do.
It's not something that you can just go in and go willy-nilly with. It takes a lot of research, a lot of understanding, a lot of market research, particularly. But I mean, if you have your ducks in a row, if you feel confident in the business, if you see the opportunity there and there's the growth, I mean, you really just need to go for it. Because I mean, if you don't do it, somebody else will and-
Yeah. I mean, it's just having the confidence and making sure that you've got the information that you need to make those decisions.
Joe:
And I have a couple adds to that as well. I feel like the term acquisition is intimidating and it can be. But at the end of the day, in our industry, we know that we're making investments every year. You have to make an investment on a new machine. You have to make investments in workers. Because when you invest, that's how you ultimately make more. And at the end of the day, an acquisition is just another investment. It can have any price tag you want on it. But if you treat it just like another investment, you're going to hopefully reap those benefits.
Jack:
Yeah. I like that. Reframing it as an investment for sure. What was it that was the main reason you decided to do this? I know that there's part of it was, you were saying you are outgrowing your current space. So, one of it is now you actually have 55,000-square-feet of real estate. I think it's only a few miles from your other headquarters. Like five miles or something?
Joe:
Maybe three.
Jack:
Maybe three. So, it's right down the street. So, that's convenient. What was the number one reason that ultimately was like, "Yeah, this is the reason we're doing this."
Adam:
So I think something we haven't touched on yet, which I'm shocked, we haven't is, diversifying. We're diversifying our portfolio. We're able to speak to new supply chains, new vendors, new clients. And we're just uncovering an entire new world that we were limited to through landscaping. So, I think not to touch on is, again, we're, we're diversifying and we're really at the end of the day, able to offer more to our current client. But new doors are opening to create new clients as well.
And at the end of the day, I mean, we're doing this because we want to make more money. Something, we talk about a lot in our management meetings and our strategy meetings is, we have the Lawn & Landscape Magazine, and the LM Magazine top 100, or top 150 on our desks, on our walls, in emails, time, and Tony repeatedly says, "We're going to be a top 150. We're going to be a top 150."
And anytime we kind of hit these milestones, or anytime we have a really good year, it's always in that attitude of, "We're one step closer to being a 150 company." And again, an investment, or an acquisition can immediately help that revenue stream, help that bottom line. And for sake of a conversation, and get us closer to that top 150,
Jack:
How will you celebrate when you're in the top 150?
Adam:
Buy another business.
Jack:
Buy another business? Just keep going. Yeah. But speaking of money, the name of the new company, that's overarching, all of this is GW Capital. So, tell me a little bit, what is GW Capital and how does it fit into all of this?
Adam:
Sure. So GW Capital is essentially a management and financial company, and it almost serves as the overarching umbrella company, or the operating company to these two businesses, which are Ground Works and Granite Works. When we were starting to plan this out again from the marketing and branding side of things, we wanted to be smart, strategic, and not confused too many people because you know, it wasn't really Ground Works buying Granite Works, or vice versa.
The big picture plan is to hopefully have a couple more companies. And as you start adding additional entities, things can get a little bit cross haired and foggy. And, oh, wait, so, this sister company, is it this sister company. So, we thought let's just establish kind of the parent company right now. And then as we continue to hopefully acquire, or as we continue to just operate as these two entities that we have, at least we know there's kind of a parent organization, that's overseeing it, helping fund it, and so on, and so forth.
Joe:
I think it's just exciting that we're going to be able to be as agile as we are. So, being able to move quickly, and operate with both businesses, it's fun. And it's going to make our ability to scale things that much easier.
Jack:
Well, good. Well, I think, just kind of wrap up here. I think one of the things that I'm observing in the green industry right now, is more investment in marketing, and in technology, and the way that you were talking about it earlier as a way of getting leverage, or helping your staff do what they need to do in a faster, more organized, more profitable way is something that I think you're doing well. And it's something that I'm seeing in a lot of successful companies that have a marketing director, or a technology director. So, thanks for coming on the show, and just sharing some of what you're up to before we wrap up. Do you have any questions for me?
Adam:
Ooh. The famous question. Well, I actually I wanted to at least congratulate you. We missed you at GIE this year because of everything that was taking place. But congrats on the second book. And thanks for sending one my way, I read your first one in like, I think a week. But it looked like that book launch was a really fun time and Louisville's one of my favorite cities and it looked like you did it right. So congrats.
Jack:
Thank you. Yeah, it was a lot of fun. We had the Stump game, we had people playing the tree Stump game. And I'm glad you enjoyed the first book. This next one, or the new one is super specific to the green industry. So, my first book, I was thinking back was about... I mentioned tire shops and Chinese restaurants, and it was all kinds of local businesses.
I actually completely rewrote this one from scratch. It's The Tree of Good Fortune, The Landscapers Guide to Modern Sales and Marketing. So, I hope you enjoy it. And folks listening, you can grab at treeofgoodfortune.com. And I have a section in there about how to have a marketing coordinator. And actually the marketing coordinator I interviewed is now the Marketing Manager at that company.
So again, I think there's a lot of things that the green industry... It's so amazing how much it's changed. I've been going to Louisville for I think this would be my fifth year. Last year it didn't happen. So, I guess this was my fourth expo. And man, the industry has changed a lot in four years in terms of technology, software, sales, marketing systems. So, it's really interesting, and it's always great to connect with people like you guys.
Thanks so much for listening to today's episode. I hope you got some value. And if you did, leave me a review wherever you're listening to this, if it's Spotify, or Apple Podcasts, or wherever, leave a review, help other people in this industry find out about this show. My name's Jack Jostes. And I look forward to talking with you in the next episode.