At just 14, Joel Northrup and his brother kickstarted their entrepreneurial journey by pushing a lawnmower down the street and offering to mow yards. It started as a way to earn some extra money during high school, but as Joel grew older, so did his ambitions. Joel was beginning to see what was possible for someone with a can-do attitude. He was ready to figure out how to scale a service business.
"I think I got my entrepreneurship from my dad and my business skills and efficiency from my mom," he shares.
By 16, he and his brother had saved enough to buy out a competing company, taking on additional routes. With a hiring push, they expanded their operation. This business move opened up opportunities for them to begin offering higher-revenue projects in hardscaping and outdoor living.
The business flourished over the next few years as they began focusing on high-value customers and weeding out ones that were unprofitable. During this time of growth, Joel admits he had to let potential clients think he was older. Fortunately, his time outdoors helped the 18-year-old easily pass for early twenties. Any time someone found out he was only 18, they couldn't believe he had the skills for the demanding projects he was leading. But as revenues rose, the profits they expected didn't materialize. Their revenues had skyrocketed, but after they had accounted for labor, overhead, drive time, materials and the time and effort to find new clients, they had only a 5 percent profit margin.
“You know, we were one ‘black swan event’ from being out of the game,” Joel says. Despite all they had accomplished, they were cutting it too close to breaking even. A strategic pivot was needed.
The Unanticipated Downside of Success
Moving out of lawn care and into hardscapes seemed smart at the time. It was a sign that they were staking their claim in the world of landscaping and proving their skills. But that shift brought a big challenge.
"There's no recurring revenue with a lot of hardscape projects; they're one-off,” Joel says. “You have to continue to go out and sell new projects. What's great about lawn care, even lawn maintenance, is that revenues are very predictable."
Slim margins left them feeling like they were doing a lot of hard work with very little to show for it.
By 2017, Joel boldly decided to identify their highest margin service and lean into it. That would mean scaling back their hardscaping business to focus on an area of landscaping where their financial statements told them they could make the highest profits. And those key areas were fertilization, weed control and tree care. This meant repeat clients, steady revenues and low overhead.
"So, we transitioned into that new model, and it initially really hurt our top-line revenue,” Joel recalls. “But within a year or two, our profits were considerably higher."
With this move, profit margins tripled. It allowed them to stabilize the company and focus on growth again.
Joel's story underscores the importance of adaptability for landscaping businesses. It is critical to look at financial statements and identify what isn’t working and why. Joel and his team may have entertained thoughts of becoming hardscape juggernauts, but financial numbers forced them to calibrate their thoughts when the numbers did not align with their entrepreneurial ambitions.
How to Scale a Service Business: The Critical Importance of Route Density
Joel would face yet another hurdle and valuable lesson about scaling.
"In our pursuit of aggressive growth, one of the mistakes we made was opening up satellite branches in other markets,” he explains. “We spread ourselves a little too thin. So, rather than focus on building route density in the markets we started in, we were trying to over-expand."
Through this mistake, Joel learned the importance of maximizing efficiency within a geographic area before trying to scale that efficiency into a new market.
Part of that efficiency came in the form of leveraging the latest technology.
"We got into robotic mowing as well. We were one of the first robotic mowing installers in the Midwest, I think second behind Joe Langton," Joel says.
According to his website, Joe Langton is an industry leader and CEO of Automated Outdoor Solutions.
"What's crazy is, we were never able to purchase enough mowers for our customers because Joe Langton would buy them all up,” Joel adds. “He was snatching up all the robotic mowers in the Midwest."
Despite the competition, Joel's move into automated lawn care would catalyze a new business venture.
Launching A Tech-Driven Revolution
In 2020, Joel sold his successful lawn care business and shifted his energy into solving a key problem in the industry: lawn care quotes. Lawn care service quoting was a very time-consuming and expensive process. The labor intensive activity previously required sending someone out to look at the yard, measure the lawn with a measuring wheel, calculate the yard area and provide quotes for services. The entire process was fraught with the potential drops and delays, miscalculations, back and forth haggling with customers and no guarantee of a new paying customer.
Deep Lawn™ was born to tackle this challenge head-on, offering AI-powered tools that allow companies to generate instant quotes based on up-to-date satellite imagery. This ensures accurate measurements, drastic reduction in quote time from days to seconds, and ensures companies using Deep Lawn™ can be the first to quote—a huge advantage in securing clients.
The Deep Lawn™ platform has revolutionized the way lawn care companies operate with 24/7 instant quotes based on geospatial data. This technology has already spread across every U.S. state (except Hawaii) plus all of the Canadian provinces. Joel's next goal is to take this technology to the European and Australasian markets.
Joel's visionary approach doesn't stop with Deep Lawn™. He's already testing Density Blaster™, a new tool that helps lawn care companies overcome a major hurdle that Joel is all too familiar with.
"One of the biggest issues service companies face is that their customers are spread out,” he says. “Geographic distribution creates a lot of drive time. Density Blaster™ helps companies acquire a greater density of customers in specific neighborhoods."
His solution combines the power of the humble postcard with AI data to attract new clients in neighborhoods where companies already have recurring landscaping maintenance projects.
As Joel looks at what's next, he sees continued advances in electric lawn care and automated lawn care as well as the use of augmented reality to improve the hardscape design process and numerous uses for AI. His journey reflects the incredible potential for growth in this industry.
How to Scale Up your Business: Key Takeaways
- Profitability Over Flash - High-ticket projects may seem appealing, but recurring revenue streams (like lawn care) often provide more financial stability.
- Adaptability - Knowing when to pivot is crucial. Transitioning to services with higher margins can save a business.
- Route Density Matters - Focusing on serving more clients in a smaller geographic area boosts efficiency and profits.
- Tech is Your Friend - Embrace AI tools to streamline operations and provide faster customer service.
Learn more about Joel Northrup, founder and CEO of Deep Lawn, an innovative company that brings efficiency and great profitability to landscaping.
Follow him on LinkedIn and learn more about Deep Lawn on their website.
Press Release : Mar 20, 2024 10:00:21 AM
