Hey everyone, Jack Jostes here. And welcome to the Landscapers Guide to Modern Sales and Marketing Podcast. This shows all about helping the green industry increase your sales, increase your profit and ultimately enjoy a better lifestyle.
Today, I'm at the GIE Expo in Louisville, Kentucky. And I'm interviewing somebody named Scott, who I connected with on LinkedIn. We've had some great conversations there. And I realized that he had a lot of challenges in his business that were similar to my digital marketing agency, where we had more sales than we had people than we tipped it into the people direction intentionally. And Scott has created something called scale first, grow second. And I hope you enjoyed the three tips that he shared in this interview, plus some unexpected personal development tips.
Jack Jostes:
Hey everyone. Today I'm with Scott Lesak, the CEO of Kasel Rocks Landscape Company in Pennsylvania. And we're here. We're going to talk about an interesting idea that you shared with me today. It was scale first, grow second. And before we get into that, tell us just a little bit. What is Kasel Rocks Landscape Company? How many people do you have on your team? How long have you been in business?
Scott Lesak:
So Kasel Rocks Landscape Company was formed in 2004 as a sole proprietorship. I was 17 at that point. So we'll use that a little loosely. I went to college at Penn State for landscape contracting, design build focus. And I was there from 2005 to 2010. We established the LLC, Kasel Rocks Landscape Company in 2011, and have been doing it ever since then.
We got a little stagnant from 2011 to 2018 hovering in between $250k and $350,000 in revenue. 2018 made some big changes, scaled first, grew second, and have gone from $267,000 in 2018 to probably coming in around $1.5 million this year for our projections. We have a team of 12 people that includes four full-time managers. We're out there getting it and growing and loving what we're doing.
The Importance of Personal Growth to Your Company
Jack Jostes:
When we were talking about scale first growth second, there were three key things that we talked about and the first one was actually personal growth. So tell me a little bit about why is personal growth important to leading a company and scaling first and growing second?
Scott Lesak:
Absolutely. My journey started with personal growth. The stagnation between 2011 to 2018 because I was in my own way. I didn't know how to get out of my own way. I didn't grow enough in maturity or mental capacity to realize I was in my own way. Through that period of time. There was a lot of drinking that was happening, a lot of unhealthy lifestyle habits I'll call them. And just really had a lot of things going on in my personal life that didn't allow me to grow.
2018, I made the decision to stop drinking. I don't drink any alcohol anymore. And that was a really life changing experience for me that sparked the personal growth. I saw how much that one seemingly small slash probably the biggest thing I ever did, change, changed a lot. And through that process, I started reading. I started learning more. Started really developing myself and growth compounds.
So the more I grew, the more I found myself growing. The more I learned, the more I found myself learning. I always like to say, you don't know what you don't know. And as you start learning more, you really start to find out how much you don't know. And that timeframe made my brain kind of like a sponge. I couldn't get enough information so I started listening to audio books all the time, started reading books, just getting information, any way I could. And that really sparked my personal growth.
And so, now I follow a growth plan that has me focusing a minimum of an hour a day. Writing things down. Figuring out what some hurdles are that I'm trying to get over. And not allowing myself to get sucked in the trap of needing to be motivated to do things. Because if we're waiting for motivation, chances are the things are never going to happen. So I just go out and do it.
Jack Jostes:
Yeah. So you have to make a habit out of it.
Scott Lesak:
Make a habit out of it.
Jack Jostes:
And just show up and do it.
Scott Lesak:
Yep.
Jack Jostes:
But that takes motivation to do that, too. Right? So...
Scott Lesak:
It does. That's one of those weird statements. Don't let motivation hold you back. But the more you do, the more you accomplish, the more motivated you get. So you have to step outside your comfort zone to get motivation.
Jack Jostes:
So, talk to me a little bit. I joke before the interview that "Oh, personal growth, that means the CEO's just reading a bunch of books. Right?" How do you include your team in personal growth? And how does your own personal growth impact the other people in your organization?
Scott Lesak:
Impacting the organization with my personal growth is the easiest way to answer that question. I learn first, everything I give, I have received. I have learned everything that I try to give away and succeed in giving away. So my personal growth does start first. You're not entirely wrong with the CEO reads books. That's how it started. It started reading books. And one book told me to start building a plan around my personal growth. So I started building a plan. We can read all the books we want, but taking some of the actions that are suggested in the books is how we actually get ahead.
So I went through a period of time where I was just reading books. And that was really enough because that's how much personal growth I needed. And I got to a point that that started to stagnant and I noticed that stagnation right away. So I started taking some of the action points that were recommended. Rereading books and remembering, "Hey, there was a list here that I should be following. Maybe I'll go back through and follow that list." And rereading the entire book just to make sure I didn't miss stuff.
Now I have a plan in place that I spend an hour, a day on myself. And I give that back to my team. We have a group text message that goes out every single morning that focuses on either mental, physical, emotional, spiritual, or financial health. And, those five key principles, we are building the team up. We're building their personal lives as well as their professional lives. And in this day and age, it's really hard to find labor. It's hard to find good help. So our most powerful recruitment tool is retention. So we want to give as much back to our people to make sure we keep them and keep them happy. Teach them the goods, the bads, thought processes, healthy thought processes around problems in their both work and personal life. And that's the way we're giving back.
Know Your Functions
Jack Jostes:
So, there's obviously a lot we could talk about with the first one of personal growth, right? Second one I believe is knowing your functions. Tell me, what is the function? And how does that then lead into the people again?
Scott Lesak:
So knowing your functions is what tasks need to be completed to do your day to day operations in the company? Depending on what business you're in, I'll use landscaping, because I know that one well, and that's what I'm growing, but we need sales. We need account management and client relations. We need project management, material ordering. We need crew management, time management, work ticket management, invoicing, all those tasks. And there's a whole lot more, but we need to identify what needs to happen on a daily, weekly, and monthly basis to make sure those jobs get completed.
That's crucial. If you're not completing all those tasks, it starts falling apart. From there, we'll go into what role is associated with those tasks. The tasks need to be accountable to somebody. Somebody needs to be accountable to complete those task. At the phase and growth we are right now, we have an org chart that has all of the positions outlined and there's multiple names in multiple different spaces on the org chart, because people are doing multiple jobs. And as we grow, we already have that scale in place on that org chart to know where we need to plug and play. As it becomes overwhelming for somebody, and the cash flow allows to replace that person, we hire somebody in and make sure that they get trained up properly on completing the tasks in one of the fields that was handled by somebody else before that.
Jack Jostes:
Yeah. So, those positions have functions that they need to perform. And then a person in your company can do more than one role.
And they can step in and do it. Oh, okay. And then it's clear though, that they're doing this role with these outcomes instead of, "Oh, Bob is good at this, so he's going to do these things because he's good at it."
No he's doing it because those are the functions of the role he's doing. Is that right?
Scott Lesak:
Yep. That's correct. And we play with that a little bit. Whoever's best at it. I actually had a really long conversation with my VP of Operations just this morning on this and reallocating some of the areas that we're doing tasks.
Scott Lesak:
I have a task right now that I'm not good at, at all, because it deals with a lot of technology on the computers and our VP of operations is very good at computer stuff. So he and I are going to converse and he's going to take over doing some of that. But in exchange, he said, "I'm maxed out right now, so I need help with one of my tasks." And we are ironing that out. That's the way it works. We have a common vision, common goal in place. We both know the outcome we need. Just have to plug and play and figure out who's doing it before we can and fill everything in. And that's part of what has allowed us to grow our management structure as a 1.5 million landscape company to something that could handle a whole lot more.
Know Your Numbers
Jack Jostes:
And so that brings us into the third point of knowing your numbers. So talk about the third key to scaling first growing second, is knowing your numbers. And so what does that mean?
Scott Lesak:
The easiest way to say it is, you got to figure out how to pay for all this. So you need to know exactly where your numbers are. You need to know how long it's going to take you to complete certain tasks. How much money you have to outlay, how much money you have going out each day, each hour, each minute and figure it down on that much detail and make sure you're recovering your overhead properly. You're recovering your salaries properly. Everything above the line is recovered, and then go below the line and get your labor costs and your direct job costs in properly as well.
We operate on a platform called Aspire Software. Phenomenal. It's been our first year in it. We just build our financial and sales forecast for next year. And the data we were able to pull out of Aspire has taken... I've always said, I know my numbers and I didn't realize how much that was not true until this year, looking at all the data we have in Aspire.
Having the Right Data is Well Worth the Investment
Jack Jostes:
Yeah. Aspire really is cool. A lot of people say, "Oh, it's too expensive." One of the lessons I learned in my business is that all data has a real cost in your company. There's either the cost of not knowing the data. Right. And, that cost might be just stress. I can be okay when we're losing money or it's a net loss and I know why. And I can point and say, "Okay, this was out of line, or this number was off." But this one I don't know, that's that does not feel good. Or you need to pay a bookkeeper or somebody, if they're crunching, "Oh, a spreadsheet is free." Well, somebody needs to do the labor of updating the spreadsheet. So talk to me a little bit about Aspire. And, is it worth the investment that it requires?
Scott Lesak:
Absolutely. It is beyond worth the investment that it requires. Landscapers and our industry is very behind on the tech curve right now, in my opinion. Going to any other industry, it's nothing to see people spending 10, 20, 30% of their revenue on tech solutions to operate their business. Aspire costs me about 1% of our revenue. And that's incredible. That is worth every single penny worth of it. So have to look at it as value instead of price. There were other solutions. We visited two other solutions that were both very good, just didn't quite fit exactly what we were looking for. They were both substantially cheaper. We could have bought both of those for less than more paying Aspire, but we would've had different systems running everything. We really liked the value that Aspire brought.
We were looked at originally, we wanted a CRM solution. We wanted work ticket management and scheduling solution. And we really wanted to be able to look at reporting and dig and into our numbers. Those were three things we were looking at. The piece we missed in our desires was the actual sales functions that we have in Aspire. And what I mean by that is estimating is effortless. We had a phenomenal estimating system before, arguably just as good as Aspire in a very fancy Excel spreadsheet. So it was really nice to come over to Aspire and have a very similar format.
The thing that Aspire added is what's called kits, and just some really easy ways that we can literally plug in a square foot amount of bed space that we have. And it auto calculates how much mulch, how much pre-emergent herbicide and how much labor it's going to take to put that mulch in that bed. Add a little bit of travel time in there for however many people are going on the crew and you're good to go. So that was cool.
Jack Jostes:
Yeah. So, again, the cost of that data, how much time would it take to get that information with your old spreadsheet?
Scott Lesak:
A whole lot more than we're paying per month for Aspire, on that one task alone.
Jack Jostes:
This isn't all about Aspire. It kind of went in that direction. But there are programs out there. And there are some sweet spreadsheets that you can jerry-rig, right?
Scott Lesak:
Absolutely.
Focusing on Gross Profit Margins While Growing
Jack Jostes:
I have a ton of them in my own business in addition to the software. But I think again, knowing your numbers, and one of the numbers that we talked about was... Talk to us about meeting your gross profit margin targets, and being okay when your net profit margin is... I think you were talking about like single digit percentages, but your goal long term is of course 10, 15, maybe even 18, 20% net. But you've got to get to that point first. And that's, I think really the root of scaling first and growing second. So tell us about that.
Scott Lesak:
So pricing is very tricky in our industry. You have to make sure you're recovering the right overhead. You have to make sure you're getting paid enough for your services to make money, but you can't charge too much because there's enough competition out there. People won't buy from you if you're charging too much. Gross margins are key to look at that. We don't really care about many other numbers, as much as the gross margin. We're shooting for a specific gross margin on our maintenance side, around 58 to 60%. And then our build side, we want to see between 45 and 50%. And that comes through with labor markups, material markups, just to make sure we're recovering the overhead and recovering everything we need.
Setting Up the Company for Massive Growth
Scott Lesak:
Now specifically related to net profit, net profit is good. We are all in business to make money. Money is good. Profit is a very good thing. That's what we're doing this for. It's not a charity. So we also like to see some net profit just to get that reward at the end of the year. Make sure that we did make money this year, but I don't mind sacrificing some of that net profit for growth right now, because our management structure could support literally five times what our revenue producing right now. And that's more comforting for me because I know that our management structure is going to allow us to grow.
I'm also removed completely from operations at this point. I can choose to go out and plow snow. I can choose to do some things, but I am working on the business rather than in the business. This year was supposed to be dedicated a lot to processes and getting some policies and procedures in place and really has turned into a lot of dedication towards learning Aspire, which has been equally as beneficial. But I have the flexibility to change that and make sure that the focus is in the right place.
Our team carries everything else. And that's pretty unheard of in any industry, the size we are, to have an owner CEO that can be in that position. That right there is why I don't mind sacrificing net profit to make sure we're hitting the gross margins that we really need to. And that, in change, will exponentially grow our net profit, next year. We have the financial plan together. And once I put that financial plan together and saw how much profit is going to be generated, because we don't have to add any managers. We don't have to add any trucks to our fleet. We just have essentially $750,000 to grow for next year.
Jack Jostes:
But what about labor? Do you need to add more labor?
Scott Lesak:
Yep. We'll be adding more labor. So we'll be going from... We've been floating between eight and 12 people in the field this year. Right now, we're at either seven or eight that are in the field.
Jack Jostes:
Is that year round or is that seasonal?
Scott Lesak:
Seasonal and year round. So we do a lot of snow and ice management. Which is more than just needing a snowstorm to get to work. So it's pretty steady year round, but there is a layoff period as well.
Connect with Scott Lesak
Jack Jostes:
Well right on Scott. Well, hey, it's been great meeting you. You and I, right now, we're at the GIE Expo at the Landscape Show in Louisville. And we connected on LinkedIn. So, for people listening, I would recommend that you connect with me and Scott on LinkedIn. We connected through some mutual contact on LinkedIn and commented on the same thing and messaged and got together. And it's been really great getting to know you here. How else can people learn more about you and connect with you?
Scott Lesak:
Look me up on LinkedIn is a great place to start. Send me a message and we can start the chat. I really like talking to people and meeting new people. So please reach out. That would be a great place to start.
Jack Jostes:
Right on. Well, everyone, thanks for checking out today's episode of the Landscapers Guide to Modern Sales and Marketing. This was Scott Lesak from Kasel Rocks Landscape Company in Pennsylvania.
Jack Jostes:
I learned a ton. I love what you're up to. Let's wrap it up with knowing your numbers, knowing your core functions, and personal growth. So there are three things that you can take away from this episode and I hope you enjoyed it. Thank you.
All right, everyone. Thanks so much for checking out this interview. If you got value from this click like, subscribe, and get notified of upcoming episodes. Each week, we release a new video designed to give you value in your green industry business. My name's Jack Jostes, and I look forward to talking with you in the next episode.