When you become self-employed in an industry such as landscaping, you’re probably doing it without having the ultimate size of your business in mind. Most of the owners I meet get into this line of work because they love it. There are some, of course, who see it as a road to riches, but they aren’t the norm.
Do you know how to classify the size of your landscape business? Do you know why this even matters to your growth?
The Small Business Administration (SBA) encourages new business owners to choose a business structure when they are opening up their business. Your accountant would encourage the same. But how do you know? You can pop onto the SBA and learn about all the business structure types to choose from – Sole Proprietorship, Corporation, S Corporation, Limited Liability Company, and the list goes on. But even this doesn’t help you understand your ultimate size.
In the late 80’s I received a degree in Entrepreneurship from Northeastern University in one of the first graduating classes with this business designation. All we talked about in the program was business plans, venture capital, and revenue. Sure, we had one class in organizational behavior, but that was a long time ago and I walked away with a B+. However, this did not prepare me for what it meant to grow a business or to articulate the SIZE I thought I was or wanted to be when I “grew” up.
It took me years to figure this out, and when I did, it was like a light bulb went on in my brain and all of a sudden I could finally SEE after I had been bumping around in the dark for so long!
I found my shining light in a somewhat obscure business book published in 2011. I’ll spare you all the details and just give you the highlight that changed my thinking.
Doug and Polly White are a business couple who worked for years in the business world and decided they needed to put their expertise in a book called “Let Go To Grow” – why some businesses thrive and others fail to reach their potential.
This was enticing to me because while I was growing with some consistency, I also felt stuck. AND I knew I wasn’t reaching my potential and it was making me MAD! I wanted to achieve more and was actively engaged in coaching relationships, classes (live and on-line), and industry trainings -- and still I struggled. What the heck was I missing?
In my on-line Landscaper’s Freedom Formula training I teach how mindset is the key to an owner’s experience. When I read chapter two of this book, called A New Way to Classify, this point was driven home! It was exactly what I needed to make some critical shifts in my own mindset, unlocking a floodgate of ideas and strategies that helped me fix areas of my business seemingly overnight.
Business size in the SBA is classified by revenue per industry. It’s all over the map -- some businesses are classified as small at just three quarters of a million dollars and anything over that they move up to mid-size. Others are classified as small up to 4 million dollars. There is nothing instructive about revenue levels when trying to understand what size you are and how to get from one size to the next.
So this new classification focuses squarely on the experience of the owner to illustrate business size. How the owner operates within the business and how she or he organizes and manages employees is what determines the size a business is and can become.
This book focused on the first three sizes in this list:
- Micro Business
- Small Business
- Mid-Sized Business
- Large Businesses
There could just as easily be a micro business operation making millions of dollars of revenue, as there could be a micro business with $250,000 in revenue. The critical factor was how the owner operated the business.
The owner is a DOER.
The owner does all the work. You go out each day with your mower or shovel or excavator or design tools and DO the work with your own two hands, your brain, and your energy, each and every day.
The owner is a MANAGER.
The owner manages employees who do the primary work. You may plan, sell, and invoice the work, but you have a team of landscape pros, gardeners, applicators and lawn mowers that actually does the work. You do NOT do the physical labor for which you’re invoicing.
The owner is a LEADER.
The owner leads and guides the managers who, in fact, oversee and manage the employees who, in turn, do the actual, physical labor. The owner may engage in daily meetings with the managers who are reporting to and seeking guidance from the owner, but the owner is not engaged with the labor force responsible for the billable hours on a daily basis.
I wish it was as clean-cut as the list above, but it isn’t. There are fuzzy overlaps and sticky transitions. Getting from Micro to Small to Mid-Sized requires owners to learn new skills and adapt their daily behaviors to use them while leaving their old skills and tasks to others.
Simply put, a seasoned mason would have to stop building walls and start letting his workers build them in order to move from a micro-business to a small business. The next step would be to hire a manager to oversee wall building while the owner goes off to sell the work or grow the company.
When was the last time you met a mason who wanted to let go of building HIS walls? That’s just one example -- pick anything. The arborist, the lawn care pro, the designer. It’s all the same. It is super hard to move from DOING to MANAGING to LEADING. It takes a whole new set of skills, but more than that, it takes letting go of the skills you used in the past and letting others take them on.
THAT was my big “aha!” moment. I was learning those new skills – actively and aggressively going after them. And I was becoming a better manager and a good leader, but I wasn’t moving ahead with any appreciable speed. Why was that? It was so frustrating to me.Well the answer was simple – I was doing all the skill building so I could grow. But I missed the critical part of the owner’s journey – learning to let go. I was still holding fast and strong to my ownership of being the one who knew best, who knew the most, and that mindset was keeping me embedded in the DOING of my business, even though I was physically not doing the work. Philosophically, I was still entrenched as a small business as I eagerly pushed toward becoming a mid-sized business.
That was when I started letting go and almost immediately, the company started to grow. There were hurdles; it’s scary to let go of what you know and what is comfortable. I still get a little freaked out by it. The difference is now I trust it. And I talk to my team about it. I ask for their help as I transition, and, man, are we having fun with the changes.
Tweetable Tip: How the owner operates, organizes and manages employees is what determines business growth capacity! https://ctt.ec/06w51+
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