Here’s a link to the digital version of the magazine.  The article starts on page 18.

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The Yard Group now operates under four brands, B&B Landscaping, Burhoe Landscaping and Lawncvare, Connecticut Homescapes and READCO Landscaping.

According to an article in the Hartford Courant, the combined companies have approximately $10 million in landscape revenues.  David Pyne, the new CEO of the Yard Group was quoted as saying “We’re looking to buy local operators that have a credible brand.”

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All members of the Landscape Workshop team will continue in their current roles and the company will remain headquartered in Birmingham with branch offices in Mobile, Huntsville, Montgomery, and Opelika.  “I have a tremendous amount of respect for the McKinney family and their team.  I look forward to our partnership and believe our customers will benefit greatly from the combined cultures, the service expertise and integrity that they bring with their investment,” said Joey Dobbs, CEO of Landscape Workshop.

“When we approached Landscape Workshop, it was vital that we shared the same commitment to customers, employees, and culture,” says Sam Eskildsen, Managing Director of McKinney Capital.  “We plan to support the team as Landscape Workshop grows its industry-leading position throughout the Southeast.”

This is the second investment that McKinney Capital has made in the landscape industry in the last year.  In September they acquired Environmental Landscape Services, based in Memphis.

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This is important for a whole host of reasons.

From a business point of view, it helps us to understand how serious they are about selling.  It also helps us position the business for sale. Prospective buyers usually want to have a very good understanding of why a business owner is selling, too.  Are they selling because they see some unavoidable business downturn on the horizon?  Are they selling because business is just becoming too hard, such as  its becoming  too difficult to adequately staff the business?  Those are red flags to a potential buyer.

On the other hand, there are all sorts of reasons to sell a business that make sense to everyone.  One of the obvious ones is that the seller is planning for  retirement.  Another common one is that the seller wants to “take some chips off the table” and reduce risk by diversifying his or her portfolio.  Other reasons that make a lot of sense are health issues or family issues. There are many others.

Recently, I sat down with a new client to better understand his business and objectives.  I asked him the question, “Why are you selling your business?”  His answer was very thought provoking.

He told me that he had a brother who had also been a business owner.  His brother’s business involved manufacturing for the building industry.  At its peak, his

brother’s business had been almost wildly successful, generating substantial cash flows –far higher than those being generated by my new client’s company.  He also had some desirable intellectual property – some important patents.  He had been approached several times about selling his company, but it just didn’t make sense to him.  The cash flow he was generating was too good to even seriously consider selling.

Then the recession hit, and the impact on this man’s business was pretty dramatic.  Since his business was construction-related, the drop off in revenues was even more acute than in companies in general.  Eventually, the decision to close was inevitable.  The auction of the equipment of a business that only recently had generated over $1 million in annual cash flow produced less than $200,000.

My client looked at me and said, “You ask me why I am thinking about selling now.  It’s simple.  I don’t want that to happen to me.”

His comment sank in for a moment and then I thought, “Wow, he’s really thought this through, and that makes a  lot of sense.”  He didn’t want to wait too long to address selling his business.  He wanted to be able to sell his business on his terms.

You really can wait too long.  His brother did.  Many business owners want to wait until business conditions improve.  Others are too focused on the day-to-day challenges of running a business alongside life’s other challenges to even think about it.

A smart business owner contemplating the possible sale of his business takes into account several questions:

• What is my business worth now?
• What can I do to improve the value of my business?
• What risks are there that might diminish the value of my business between now and the time I might sell my business?

The answers to those questions should be pretty thought-provoking.  Thinking about these and others should help a business owner to answer the question as to when the time is right to start thinking about selling his or her business.

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Well, another Super Bowl has passed and being a life-long Broncos fan all I can say is “yay.” My lack of enthusiasm for the Super Bowl is really just a case of extreme jealousy. The Patriots and Giants are both great teams deserving of their elite status. Inevitably, I can’t help but look at those two teams and wonder what it would take to get the Broncos to that level. Yes, I can hear a number of you now (probably Raiders fans) saying something along the lines of ‘The Broncos are only missing an offense, a defense, special teams play and possibly a franchise quarterback’. All I can say is just keep laughing, I’ll still be rooting for the Broncos next fall.

Thinking about the difference between good and great made me wonder about what might be an appropriate analogy in the business world and the Giants seem to fit the analogy nicely. They have a great quarterback but didn’t really play like a team for much of the season. In fact, after week ten, numbers of Giants fans were openly calling for Tom Coughlin’s dismissal. Now they are having a ticker-tape parade for him. So what changed? The team started working together and playing for each other knowing that they could achieve more together than they ever could separately.

Football is one of those great sports that’s analogous to the business world because the team is so important. Tom Coughlin rallied his players and told them to ignore the people that couldn’t help them win. Coughlin said that they were going to win together or not at all and he was proven right. He dismissed all the naysayers and people who said he was too old, or too stubborn, or too set in his ways and the very same fans that dismissed his last Super Bowl win as pure luck. He kept his head down and did what he knew how to do. He supported his players and they supported him.

My question is have you given clear directions about what you expect and in what direction you want the business headed? Have you supported your employees in even difficult circumstances? Have you made it clear that you are a team; a group of people headed to success by following one plan? Have you stayed the course, even when things were tough, and made it clear that you win or lose as a team? If you don’t think any of that makes a difference then you should take a look at Tom Brady sitting there giving his final interview of the season and then compare it to the picture of Eli Manning giving his. I know which side I want to be on.

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Doctors in the developing world measure their progress not by the aggregate number of children who die in childbirth but by the infant mortality rate, a ratio of the number of births to deaths.

Similarly, baseball’s leadoff batters measure their “on-base percentage” – the number of times they get on base as a percentage of the number of times they get the chance to try.

Acquirers also like tracking ratios and the more ratios you can provide a potential buyer, the more comfortable they will get with the idea of buying your business.

Better than the blunt measuring stick of an aggregate number, a ratio expresses the relationship between two numbers, which gives them their power.

If you’re planning to sell your company one day, here’s a list of seven ratios to start tracking in your business now:

1. Employees per square foot

By calculating the number of square feet of office space you rent and dividing it by the number of employees you have, you can judge how efficiently you have designed your space. Commercial real estate agents use a general rule of 175–250 square feet of usable office space per employee.

2. Ratio of promoters and detractors

Fred Reichheld and his colleagues at Bain & Company and Satmetrix, developed the Net Promoter Score® methodology, which is based around asking customers a single question that is predictive of both repurchase and referral. Here’s how it works: survey your customers and ask them the question “On a scale of 0 to 10, how likely are you to recommendto a friend or colleague?” Figure out what percentage of the people surveyed give you a 9 or 10 and label that your ratio of “promoters.” Calculate your ratio of detractors by figuring out the percentage of people surveyed who gave you a 0–6 score. Then calculate your Net Promoter Score by subtracting your percentage of detractors from your percentage of promoters.

The average company in the United States has a Net Promoter Score of between 10 and 15 percent. According to Satmetrix’s 2011 study, the U.S. companies with the highest Net Promoter Score are:

USAA Banking 87%
Trader Joe’s 82%
Wegmans 78%
USAA Homeowner’s Insurance 78%
Costco 77%
USAA Auto Insurance 73%
Apple 72%
Publix 72%
Amazon.com 70%
Kohl’s 70%

3. Sales per square foot

By measuring your annual sales per square foot, you can get a sense of how efficiently you are translating your real estate into sales. Most industry associations have a benchmark. For example, annual sales per square foot for a respectable retailer might be $300. With real estate usually ranking just behind payroll as a business’s largest expenses, the more sales you can generate per square foot of real estate, the more profitable you are likely to be.

Specialty food retailer Trader Joe’s ranks among companies with the highest sales per square foot; Business Week estimates it at $1,750 – more than double that of Whole Foods.

4. Revenue per employee

Payroll is the number-one expense of most businesses, which explains why maximizing your revenue per employee can translate quickly to the bottom line. In a 2010 report, Business Insider estimated that Craigslist enjoys one of the highest revenue-per-employee ratios, at $3,300,000 per employee, followed by Google at $1,190,000 per bum in a seat. Amazon was at $1,010,000, Facebook at $920,000, and eBay rounded out the top five at $530,000. More traditional people-dependent companies may struggle to surpass $100,000 per employee.

5. Customers per account manager

How many customers do you ask your account managers to manage? Finding a balance can be tricky. Some bankers are forced to juggle more than 400 accounts and therefore do not know each of their customers, whereas some high-end wealth managers may have just 50 clients to stay in contact with. It’s hard to say what the right ratio is because it is so highly dependent on your industry. Slowly increase your ratio of customers per account manager until you see the first signs of deterioration (slowing sales, drop in customer satisfaction). That’s when you know you have probably pushed it a little too far.

6. Prospects per visitor

What proportion of your website’s visitors “opt in” by giving you permission to e-mail them in the future? Dr. Karl Blanks and Ben Jesson are the cofounders of Conversion Rate Experts, which advises companies like Google, Apple and Sony how to convert more of their website traffic into customers. Dr. Blanks and Mr. Jesson state that there is no such thing as a typical opt-in rate, because so much depends on the source of traffic. They recommend that rather than benchmarking yourself against a competitor, you benchmark against yourself by carrying out tests to beat your site’s current opt-in rate.

Dr. Blanks and Mr. Jesson suggest the easiest way of increasing opt-in rate is to reward visitors for submitting their e-mail addresses by offering them a gift they’d find valuable. Information products – such as online white papers, videos and calculators – make ideal gifts, because their cost per unit can be almost zero. Using this technique and a few others, Conversion Rate Experts achieved a 66 percent increase in the prospects-per-visitor rate for SOS Worldwide, a broker of office space.

7. Prospects to customers

Similar to prospects per visitor, another metric to keep an eye on is the efficiency with which you convert prospects – people who have opted in or expressed an interest in what you sell – into customers.

Conversion Rate Experts’ Dr. Blanks and Mr. Jesson recommend you monitor the rate at which you are converting qualified prospects into customers, and then carry out tests to identify factors that improve that ratio. Conversion Rate Experts more than doubled the revenues of SEOBook.com, the leading community for search marketers, by converting many of SEOBook’s free subscribers into customers. Techniques that were found to be effective included (perhaps counter intuitively) restricting the number of places available; allowing easier comparison between SEOBook and the alternatives; communicating the company’s value proposition more effectively; and simplifying its sign-up process. The trick is to establish your benchmark and tinker until you can improve it.

Acquirers have a healthy appetite for data. The more data you can give them – in the ratio format they’re used to examining – the more attractive your business will be in their eyes.

Wondering if you have a sellable business? The Sellability Score is a quantitative tool designed to analyze how sellable your business is. After completing the questionnaire, you will immediately receive a Sellability Score out of 100 along with instructions for interpreting your results. Take the test here:
Sellability.PrincipiumGroup.com

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Lush Lawn Care Inc. is owned and operated by Mark Kelbacher of Plainville, CT. The existing operations will come under the name of Lawn Dawg later this month. A significant outcome of this deal is the addition of two seasoned veterans in the lawn care industry – Mark Kelbacher and Dan Cisz.

Mark, who will continue the branch operations in CT, had this to say about the deal, “This opportunity came at the perfect time for Lush Lawn. The partnership with Lawn Dawg provides the support and resources to expand our footprint throughout Connecticut. I’m excited, and Jim and Tom were professional and their enthusiasm really closed the deal! I look forward to being a part of the Lawn Dawg team and continuing to provide exceptional service and results to all of our customers for years to come.”

Dan who has relocated to headquarters in Nashua, NH, has accepted the position as Director of Sales states, “I’m very excited about my future with a growing company like Lawn Dawg as we collectively capture the fertilizing responsibilities of the northeast.”

“This marks the 4th acquisition we’ve made in the last 2 years, and it may very well be the most exciting due to the incredible potential of the market coupled with the addition of two industry veterans,” states Lawn Dawg President Jim Campanella. “Mark and Dan bring great knowledge and leadership to our team. They have built a great company in Connecticut and we are very enthusiastic about the prospect of building on that core business. We are proud to have made another significant step to achieving our goal of being the dominant provider of professional lawn care services in the northeast.”

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The purchase extends Go-Forth’s service area from Hillsborough in the east to Statesville and the Lake Norman area in the west. Go-Forth will maintain its headquarters in the Triad and operate a satellite branch in the Lake Norman area.

— Charlotte Business Journal

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