Blue Collar Culture

Business Results the Old Fashioned Way

Jim Huston | Perseverance and Creativity — Your Keys to Entrepreneurial Success

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On this week’s episode of the Blue Collar Culture Podcast, we speak with special guest Jim Huston. Jim has over four decades of experience in the landscaping industry and has written seven books that deal specifically with landscape irrigation and tree care. He is also a member of the American Society of Professional Estimators and one of only two Certified Professional Landscape Estimators in the world.

“Perseverance is critical. The thing is, I think it’s critical for entrepreneurs to realize the difference between perseverance and stubbornness. And I say that basically, perseverance and stubbornness, but it’s’ really creative stubbornness. Like you’re stubborn, you persevere, but you’re not creative. You have to have both and this is where so many contractors just do not think outside the box. They just keep doing the same old thing over and over again without being creative and breaking the mold,” says Jim.

We chat about the biggest myths around the landscape industry, as well as:

  • Determining appropriate hourly rates to ensure an appropriate profit margin
  • Jim’s best mistake
  • The difference between perseverance and stubbornness
  • What often holds a business back
  • And more

Listen now…

Mentioned in this episode:

Transcript

Ryan Englin: Welcome back to another episode of the Blue Collar Culture Podcast. I'm your co-host Ryan Englin, and I'm here with Jeremy Macliver today. 

Jeremy: Welcome back, everyone. 

Ryan: Today's guest is no stranger to the landscaping industry. In fact, he has been part of the landscaping industry for almost four decades now. He's written seven books that deal specifically with landscape irrigation and tree care. He's got multiple degrees. He's a member of the American Society of Professional Estimators and a certified professional landscape estimator. Only one of only two of them in the entire world. Jim Huston, welcome to the episode. 

James Huston: Hey, guys, thanks for having me. I really appreciate it.

Ryan: So what is the biggest myth about your industry?

Landscaping Myth Busted

Jim: You know, it's really a good question. I think probably the biggest thing I see is that a lot of people think that because the entry, the barrier is so low, I mean, you buy a lawnmower, you're a landscaper, you know, got a pickup truck, you're qualified to be an expert. And because of that, they think that because it's easy to get into it, it's easy to understand and they don't necessarily treat it like the real business is this. And so I think it's a question of ignorance and just unrealistic expectations.

Jeremy: Definitely. You know, and I don't know that's, that's quite just the landscaping. Ignorance of expectations and business. I know I probably, not probably, I have been guilty of that myself in starting my first business. Sure looks a lot easier from the outside than it is when you jump into it, doesn't it?

Jim:  You know, it really does. And, you know, and the thing is, is that a lot of people, you know, they don't know what they don't know. And that's probably the biggest problem they face. And they don't know these things and they, therefore, don't go about trying to learn what they don't know. And as a result, it stifles their growth, their profitability and just their understanding of the business in total, and it also lessens your ability to enjoy the industry. And that's a big issue.

Jeremy: Yeah, and, you know, you use the word enjoy. That's, it's interesting because we all started out in whatever industry we started our business because we're passionate about it. And sometimes that business overwhelms us and you become less passionate about it and frustrated.  I was just on a call this morning with a company, a business owner who's passionate about his trade, and right, just hanging in the towel totally frustrated because business can be overwhelming. So I know that you've worked with business owners in the landscape industry for like, almost 40 years now. What are a couple things that you've been able to show them, teach them that have just really created some amazing results?

Pricing Correctly

Jim: You know, the best thing that I do is, well it really impacts the bottom line, but I show them how to come up with a price or what they need to charge, let's say for a crew for the day. So these day rates I found that probably be the most impactful thing out there as far as what I do. And what it does, it gives these entrepreneurs daily benchmarks that they need to shoot for in their business. I hear guys every once in a while, in fact, a number of years ago, I had a guy that I asked him well, how did last year go, it was like January of 2017. I said how did 2016 go? And he says, I don't know.  He says, my CPA hasn't told me yet. I think, wait a minute, we're talking about last year, if you needed to correct something, you got a problem. You can't go back and just ask your clients to send you more money for invoices you submitted that six months ago. And so what I want to do is to show contractors the amount of revenue every crew needs to generate, every technician needs to generate on a daily basis so they know at the end of the day to make money or not. And I think that's probably one of the best things that I do for contractors out there.

Jeremy: So really digging into what does it really cost to run a crew.

Jim: Exactly, yeah, we get pretty detailed in creating budgets, you know, using benchmarks and helping companies establish benchmarks so that they know, like I said, on a daily basis that they're, say, again, an irrigation technician out there was that individual, you know, paying for himself or herself? And, or are they, you know, upside down? So we want to have those very simple, measurable goals that we can look at on a daily basis.

Jeremy: So, you know, and I've talked to a lot of owners and I'm sure you've ran across, the one paying the guy 17 bucks an hour and I'm charging 65. Like, why do I need to do any math? Isn't it pretty obvious? 65 minus 17? I'm good?

Jim: Well, you would think so. You know what's interesting, I've had a lot of individuals who have great rates, hourly rates, and so one individual in your area, you know, his hourly landscape maintenance rate $45 an hour was right on. However, if he was working an eight hour day, if you take the $45 times eight hours, it needs to generate $260 a day per person and the crew. Well, was only generating about 250 a day, but he had a great hourly rate. He just wasn't making sure that every day was billable and that every crew was meeting his daily billable revenue goal. And so even though he had a great rate, he wasn't paying attention to the daily revenue goal. As a result, he was losing a lot of money.

Jeremy: Love it. I definitely have seen it. I knew that that was almost a softball for you there because seeing it too many times, they're not filling the day. They're not maximizing the schedule. Yes, the rate's there, but we're not actually doing that. Maybe we're not using the right amount of hours to bid that thing, all kinds of stuff. So

Jim: It's just, it's amazing how often that I've been to a contractor, I just worked with a big contractor in Texas doing about $6 million in sales annually. And some things he had in this company were priced right. It was going great. He was doing pest control, he was doing lawn care, landscape maintenance, installation. Some things were priced right, but there were some things that were seriously underpriced. And so it amazes me how often somebody has an area in their business where the margins are great, they're making plenty of money, but then they're got to another area where they're upside down and all the money they made in one particular service is being eaten up by another. It's surprising how prevalent that is.

Jeremy: Absolutely. So understanding the different areas that we're making that, you know, I have a client that I work with that's in the landscape maintenance arena. And, you know, you picked on irrigation, that's always a troubling section for, a lot of them seem to be the irrigation. And, you know, they were actually able to increase their profitability. In one quarter, they were able to increase it by 85%.  And they weren't even measuring profitability. It wasn't a number like that. What they ended up measuring was windshield time, because they realized that their scheduling was messed up. They had lots of just little kinks in the way they were organizing it, getting people out to the right jobs at the right time. And quite honestly, they've learned also, through the process of measuring that number, they learned that they, the employees weren't always turning the paperwork in. And so it's hard to bill when you don't turn the paperwork in, you know?

Jim: Well, you know, a lot of times, what we like to do is we want to give those technicians at the end of the year, maybe a 5% bonus on the retail cost of all the materials they sell. And so, hey, listen, if you don't turn in the paperwork, you're not going to get your 5% on this. And so we want to add some checks and balances to reinforce these things.  But it's amazing how many people get wrapped up in the minutiae of how many entrepreneurs and they don't ask the basic question, did that technician or did that particular crew generate the revenue they need to generate per day? And it's such an obvious question and it makes a huge impact when people understand that and they implement it.

Jeremy: That's great. And this is always a fun question to ask. So what is the best mistake that you've ever made?

Creative Stubbornness

Jim: Not quitting. And what I mean is that, you know, there's a lot of times when you think you should have quit, you should have given up and maybe gone someplace else or tried something different. But I think for myself, it's just, you know, I got a pretty junkyard dog mentality. And I go after something and I don't give up on it. And I think that's probably the biggest mistake I've ever made is that, you know, I didn't realize I couldn't do something and they go ahead and end up doing it.

Jeremy: I love that. Sometimes, you know, Gino Wickman has his new book out, Entrepreneurial Leap, and he has the six traits of an entrepreneur. And the way you said that made me think of it because they're driven risk-takers. He just talks about like, there's something in every entrepreneur out there that they just don't have that backup button. There's not the turn it off button. Like, something was broken in the system right there and they just, they plow through. And quite honestly, if you don't have it, we might not, we might need to talk about a job, not an entrepreneur, not being a leader of an organization. So It's great hearing that.

Jim: I think you're absolutely right. And, you know, that perseverance is critical. And this never say die mentality is so critical for an entrepreneur to, you know, just think that way. And it's so easy to get frustrated and give up. The thing is, I think it's critical for entrepreneurs to realize the difference between perseverance and stubbornness. And I say that basically, perseverance is stubbornness but creative stubbornness.  Like, you're stubborn, you know, you persevere, but you're not creative. And you have to have both. And this is where that so many contractors just do not think outside the box and they just keep doing the same old thing over and over again without being creative and, you know, you're breaking the mold so to speak.

Jeremy: Yeah. I like that. There's a quote out there the pessimist complains about the wind, the optimist expects it to change, the leader adjusts sales. 

Jim:  Yeah. Exactly, exactly.

Jeremy: There's still the wind, you still gonna push into it, but just gonna have to be flexible of it. You can't just be totally ignorant about it. So, cool.

Jim: What We're talking about is we're talking about how you think and why thinking correctly is so critical. And we need to focus on, like I said, just how we think, our ability to think and what we think about.

Jeremy: Absolutely. And, you know, I encourage my teams, I don't know about you, but actually encourage them to stop every week. And I was just recently on a podcast where they asked what's the one thing that I really should do? And I said, they should take an hour a week to just stop. There's so much chaos going on. There's so much pressure, there's so many things coming. Stop for one hour a week. Get away from it all and just think about where you're going because it's gonna help you reset. It's going to help you think about all of this and where we're going. So,

Jim: You know, that's why I think taking vacations are extremely important. Or even daydreaming. You may be sitting at your desk and just kicking back for five minutes and letting your mind wander. And sort of detaching from everything because we get so wrapped up in the minutiae, we miss the big picture.

Jeremy: Exactly right. And it, for us, drivers, entrepreneurs, people that built this, it feels useless. It feels like almost a waste of time. I tell people, you know, it's no secret. My clients know that I go to Jamba Juice on Friday afternoons with a blank piece of paper. Like, that happens, and you sit down and it's amazing. I will guarantee you that I've made hundreds of thousands of dollars in that blank piece of paper.  Because you sit down, you're like, what's frustrating me? What's going on? What's not working? What do I need to do? What do I need to grow, change, and you, it clears your head and you come up with some stuff that's gonna really help you move forward. So one more question and I want to turn this over to you to teach us a couple of gold nuggets.

So this question here is, what's one thing that holds a business back? Like, what's that big thing that they could just get through that, break free that you'd like to leave with our listeners?

Jim: You know, it's bad thinking. And we should have mentioned it earlier. And it's really, an entrepreneur needs to think about how he or she thinks and approaches life and just reality. And so it's a question of how you think, how you approach problems, how you approach people and so forth. That may seem overly simplistic but everything else trickles down from that as far as how you think on there. And there's a number of things that are involved in that, but that's basically the key to this thing is thinking correctly.

Jeremy: That's great. So let's turn this over. Let's give you some time here to just teach us maybe how to, if you want to go into the thinking, you got something else prepared for us. That's great. But give us some words of wisdom. And just, I'm gonna turn this over to you and let you teach us for a little bit here.

Accept That You Don’t Know Everything… and Act On It

Jim: Yeah, the when I say that, it just seems overly simplistic that, you know, it's about how you think. But what I'm talking about, for instance, one thing you have to do is you got to be willing to look out for coaching and for coaches. For instance. I mean, you know, young guys, the problem that they have is that they're stubborn, and being, having been a young man once myself, you know, when you're in your early, in your teens or early 20s, you think you know everything. And so one thing is to realize that you need to be in the business of getting good ideas and pursuing good ideas and find, discovering good ideas. 

And this is what being in business is really all about. And this is the fun creative aspect of it. So one of the things well, I was going to say, also, I've met young men, especially, that I can relate to, but their attitude is that you can't teach me nothing. And I would agree with him. I can't. And so this is where the, if you're humble, and if you're asking good questions and you're seeking information and knowledge, you know, you can really go far. 

But so this is where that I think one thing is that it's critical for entrepreneurs to be thinking about How can I get a good coach? You know, where can I find somebody that's had this experience before that can help me, you know, sort of navigate through all of this? You know, they'll the saying is, is that experience is the best teacher, but they forget to tell you, preferably, somebody else's experience. And so there's so many good resources out there. And that is critical for us to be pursuing those. 

Give me a couple of numbers to think about. I don't know exactly how many landscapers there are in the country but I've heard 150,000, 500,000 I'm not sure but it's interesting that about 10%, about 12% make it to a million dollars in sales. About 2% make it to $5 million in sales, about 75% are doing 500,000 or less in sales and so many of these contractors get stuck at a certain level, whether it's $300,000 of revenue a year, 2 million, 3 million, 5 million. I talked to one arrogation contractor in New York and his company was stuck at 15 million.  Now, that sounds like a good place to be stuck at but they were stuck. And so now, wherever you are, you need to be constantly looking at, you know, thinking outside the box, thinking for new ideas, and trying to get out of the self-imposed straitjacket that we create for ourselves.

And this is where, again, a lot of it is where a lot of contractors don't understand the entrepreneurship. And what I mean is that entrepreneurs are constantly thinking about two primary things. And one is opportunities to pursue, the other things are threats. So threats and opportunities are really the two things that entrepreneurs are constantly looking at.  And so they're measuring risk as they look at these things. And so it's critical that as an entrepreneur, whether you're doing 300,000 or 300 million, that you're sitting in the top of an organization. But those are the two key things you need to think about. You know, what can I pursue with my team? And then the other thing is, is that what's going to jeopardize what I have in place on here as well? And so again, that gets back to thinking.

And I constantly reinforce the thing of so many people and all of us, it's a constant battle for us all, is that we don't know what we don't know.  And if you think about the recent COVID-19 pandemic that we've been experiencing, what's interesting about three, four months ago, going into 2020, I thought, you know, 2020 is going to be another fantastic year. I mean, what's out there that could possibly derail this thing? And I said, you know, hey, we've gone through the dot com bubble burst of 2000, we get through 2001, you know, 911 we get through, you know, the mortgage crisis of 2008, 2009. I mean, what else could be out there that we haven't already experienced? And by gosh, here comes this COVID-19 pandemic, almost upset the entire apple cart. 

Jeremy: Wow. It's been a humdinger, hasn't it?

Jim: It has been, but, you know, the good thing about it is that I think, is that just, you know, it needs to teach us that there's always something out there that we don't know about that totally upset the are applecart and sink whole boat. And so we have to have this constant inquisitiveness about, you know, What don't we know and what are the possibilities? We got to be a vacuum cleaner of ideas, you know, new concepts, that type of stuff. 

And that's what successful entrepreneurs do. It's a constant creative process, that really people, you know, we get so set in our ways that we miss something really, really big. You know, the mortgage crisis back in 2008, 2009, was very similar. There were a couple people that were on to the problem. Most people were oblivious to it.

Jeremy: I want to jump into something right here because I think, you know, and I know you outside of this, I know some of your expertise, your history. You know, you were actually recommended by one of my clients. We have some, you know, stuff where I know this, you know, I know how good you are at some of this stuff.  So I know you've done some great financial stuff. And we're talking a lot about mindset, mind shift. So what are some things that maybe help us dig into, we're looking at these, we never know that a COVID is going to come or a meltdown or what have you. We don't know what the next thing is. What are some money mind shifts that we need to have as business owners or some money best practices?

Money Best Practices

Jim: You know, this is where the, now we need to quantify things. We need to measure and quantify our business and the things that are going on in the business. So what I'll do with a new client is we will establish a budget, let's say for 2020. And from that budget, we're going to get goals. And I tell clients all the time, there are three things you got to do in your business primarily to make money. Number one is You got to price it right. You've got to price your services and products correctly.  Number two, you're going to produce it right. You gotta produce it the way you price it or price it the way you produce it.

And number three, you got to produce enough of it. That make sense? And so what I'm getting at, so now we're starting to quantify and measure what's going on in business. The budget gives us a goal for sales for each division. Then we can learn, we start measuring things, and I'll look at a budget for a new company, and I'll benchmark it. I'll go in and I'll say, Hey, listen, you know, your landscape construction division looks great. You're making tons of money.  Your landscape maintenance division is just a dog. You're losing money there and we got to address that. And so we're going to start measuring things with this budget, and I'm going to get four things from the budget. I'm going to get the sales, goals reaching into each subdivision, I'm going to get billable labor hours for each division, then I'm going to come up with the overhead, the general administrative overhead that we need to recover for the year.

And then also the labor burden, you know, the payroll taxes and all that stuff.  So we're gonna start measuring things with this budget, set these annual goals, then we go in and we price the individual services on here. And so we want to identify what the costs are to put a, let's say, a two-person maintenance, lawn maintenance crew out in the field. We want to cost out the labor, the labor burden, the equipment cost, overhead, everything. So we have benchmarks that say maybe the rate is 45 bucks an hour, that's fantastic. But if we have, we're working a 10-hour day, at the end of the day, that individual needs to bill $450. So if you got two people out there, they better be billing $900 a day.

Otherwise, you know, we've got a problem.  And so those are, those, that process of identifying and quantifying these goals for each individual crew, each individual technician, whatever it is out there, allows the contractor to wrap his or her head around what that crew needs to generate per day on here. And so those things are really, really important on there that you, whether you're doing 300,000 or 300 million in sales, that you are making sure that every day is a winner and that you know what's going on with every crew, every technician out there and if you're making money or not. Does that make sense? 

Jeremy: It does and I love that. So what I want to do here is we've challenged you, we've asked a lot, you've brought some great content, some great stuff here. I'm gonna ask you to turn the tables and challenge our audience. What is something they should go do after listening to this week in their business?

Jim: I think what they ought to do is number one, they need to ask themselves who are my coaches? Who are the people that are coaching me that can really help me get to the next level? And so many times, entrepreneurs want to be loners. And that's a big mistake on there. So I would say the key thing is to ask yourself is who's coaching me? You know, to make sure that my pricing is right.  You know, I'm in compliance with HR and all these things, but who are my coaches out there? And I call this the external team on here.

So I would say, I would start there. The next thing I would do is say okay, By Gosh, what categories, what services that I'm producing and providing are making me money? And then what services do I need to work on that aren't making me money? And then the question is, do I even know the answer to those questions? So that's where I would start. I would ask a couple key questions about coaches and then profitability. 

Jeremy: Very good. So if they get stuck, where can they go to talk to you about getting unstuck? Can probably recommend them to a great coach, right?

Jim: Sure. And the other thing, you know, and this is where that I think, you know, check out our website at jrhuston.biz on there. I've got a lot of good information there. I got a number of books out that cover these topics. But the thing is, I think you want to start master planning yourself, your life and your business. And, you know, there's so many great events out there. The GIE Expo thing, these type of things, but you want to start reaching out to somebody who can help you.

Jeremy: That's great. So if you missed that, it's jrhuston and Huston is HUSTON, correct? Jim: Yeah, they spell the city wrong in Texas. And we're trying to get those Texans to change it but they're pretty stubborn. So it's JRHUSTON.BIZ.

Jeremy: Alright, so go there if you'd like to dive deeper. One last thing. I understand that you have a special gift for our audience. You want to share that with them?

Jim: Absolutely. I do my seminars back at the GIE Expo in Louisville every year. And last year we did one on pricing and estimating and so forth. And we had about 10 Microsoft Excel worksheets that I use for budgeting, for pricing and so forth. We're going to offer those to your listeners. And all they got to do is email me, email me at [email protected] and we'll send those out to you. I think you'll enjoy that and get a lot out of them. 

Jeremy: Perfect. Well hey Jim, I appreciate it. I've enjoyed it. I love hearing your expertise. Thank you so much for being on our podcast. 

Jim: Thank you. Really enjoyed it and best of luck.

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