General manager who can grow a company from 1.5m to 5m

TPendagast

LawnSite Fanatic
Just the opposite of what Brendon mentioned. Some individuals want to manage but not own. In Landscaping we’ve been slow and steady with growth maintaining good margins to ensure profitability. To spin something up to between 5 and 10 million will take lots of capital. Probably more than what Ted mentioned or at least that amount year over year. You’d need to increase capacity by adding staff (recurring costs), equipment and facilities. A manager might want a piece or profit share but may not have the desire or means to finance that type of investment. Maybe no appetite for the risk. Not sure what it’s worth for a true GM. I would agree with Green Mentorship’s numbers on The operations guys. Operations and General Managers are two different animals though.

I helped found a company in a different industry (IT consulting and cyber security). We accelerated the growth and rapidly got up to some substantial revenue with decent profitability. Multiples of what you asked about. Agreed that the overall scope is different, but we have technicians for network maintenance and engineers for network build outs and infrastructure projects, salespeople for making deals. Very parallel type of setup to Landscape Contracting with some maintenance and some installation. At the higher revenue numbers with multiple divisions at work you end up needing mid level managers at pretty high cost, especially if you want productivity and accountability. That’s no different in our industry. If you can find the GM, they would have to be able to build this out. In my experience, it took all of the things you mentioned depending on the person and the skill set. Multiple $150k employees, some equity splits for those interested folks, great benefits, competitive commissions for the salespeople. There was no magic bullet, it took teamwork, and in our case time. Sometimes you find guys who can build out the operations but maybe not the sales team. Rare to find folks who can do it all well, even for bug money. You’d need to find a GM candidate who knew his or her strengths and weaknesses. And, like Ted said, could help keep decent margins the whole time. Otherwise, why do it.
the numbers I mentioned was only for the lead talent (the manager/consultant)
Not the investment or scaling or other payroll for scaled up employees (like division managers or field supers)

1-1.5 million is a GM (or consultant) over a 7–10 year period of time.
Which is what it would take , coming from 1-1.5 million
IF the goal is growth plus increased margin.

A GM like that is going to bring the blueprint with him.
It’s borrowed or learned from somewhere else and incorporated into your setting.
This is done in the restaurant and bar industry all the time.
The GM has the recipe for the training, hiring, firing, implementation and execution of the whole thing.

that’s what the OP is looking for.
If you just wanted to hire a manager to run the systems and/or operator you build (ie a baby sitter) that’s completely different and can be had for much less (50-75k)
But that person doesn’t come with “everything” we are talking about or the OP is looking for.

business development, systems structuring, HR blueprints, etc that’s all expensive.

no one with that is coming to the table for 55k

55k gets you maybe a 28 year old kid with a degree in hort that hopefully can identify a couple dozen plant species and can pass a pest applicators class.

if anyone thinks they’re turning over their revenue generation and the responsibility of protecting the company net to someone who is going to accept 55k for 5 mil in revenue... that’s literally financial suicide.

just an HR Manager would run you about that (maybe a bit more)
 
OP
BrendonTW

BrendonTW

LawnSite Bronze Member
Location
Oklahoma City
however, remember, you don’t need (or necessarily want) more revenue
You want more margin.
They’re related but CAN be mutually exclusive too.

would you rather have 1 million in sales with 10% margin or $500k in sales with 20% ?

I have seen people grow their way straight out of having any margin.
So be careful with your goals and don’t get too hungry.
Ted you are on the same page as what I am inquiring about for the most part.

I did mean to comment on this comment you wrote from the other day and forgot to. I think you left out an option.

1 million and 10%
.5 million and 20%
10 million and 8%

For my personal preference, I'd rather be at 10/8, or 50/5 if we wanted to get crazy.

On the contrary, I know that this type of growth will take capital and I don't want to sell any controlling interest in the company - so we MUST be profitable enough to grow at the rate we want to grow without losing any substantial equity.

I am currently in a consulting relationship with a guy who grew to 17 million and sold, said he sold largely because 1) he was too focused on growth over profitability during his career and 2) sold controlling interest in effort to grow.

He was profitable all the while, but had he been more profitable, may have grown slower but retained control and then essentially was forced to sell when the private equity wanted to exit.

Owners make financial decisions
Like when to invest in major expenses like a new front end loader or how much the Advertising budget is
What services to offer
Target customer?
Branding

I mean there is so much to do when working on your business there’s no real need to work in it
That’s what the manager is for
Handles day to day ops, training, sales
You set the benchmark
The manager meets or exceeds those expectations.

you can’t do 5 million on your own
So if you’ve got companies in your area in the revenue range
They have additional talent involved
They may not be called “general manager” but titles are just titles
The owner isn’t doing it all alone, that’s for sure.
I think what I would be looking for as my view of being the "owner" is to NOT be making those decisions, but to offer advice to the GM or CEO when they need input. I think what you described as the "owners" job to me is the GM or CEO (very similar title in my opinion) job. I also think some of those decisions (when to buy front loader, target customer, branding) are also likely things that fall under those who are reporting to the GM or CEO and not the CEO's direct decisions.

Of course, the picture I am painting is one of a $10-$15m + company.

But thats the person I'm curious about. The one who understands where we are going. Is there someone like that out there who is willing to come into this small of a company but has been at the helm or close to the helm of a 10-15m operation?
 

snomaha

LawnSite Bronze Member
Location
midwest
I gave up 10% equity in two separate tranches in order to retain my GM a number of years back. Freed me up to be the visionary, while he focused on the integrator/operations role.
 
OP
BrendonTW

BrendonTW

LawnSite Bronze Member
Location
Oklahoma City
I gave up 10% equity in two separate tranches in order to retain my GM a number of years back. Freed me up to be the visionary, while he focused on the integrator/operations role.
That poses a good question. Is it possible to hire a visionary CEO to build a company for you? If you think about large companies, the CEO isn't usually the "owner" ... yet there are those out there who produce amazing results. Of course, many times stock is awarded as compensation in part which is in effect giving them ownership.
 

Green Mentorship

LawnSite Senior Member
Location
Heaven
All this talk if growth and equity makes me think of this story I saw on the walls of Jimmy John's a few years back
The Mexican Fisherman and the Investment Banker (Author Unknown)


An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “only a little while.”

The American then asked why didn’t he stay out longer and catch more fish?

The Mexican said he had enough to support his family’s immediate needs.

The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, and stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.”

The American scoffed. “I have an MBA from Harvard, and can help you,” he said. “You should spend more time fishing, and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, and eventually you would have a fleet of fishing boats. Instead of selling your catch to a middle-man, you could sell directly to the processor, eventually opening up your own cannery. You could control the product, processing, and distribution,” he said. “Of course, you would need to leave this small coastal fishing village and move to Mexico City, then Los Angeles, and eventually to New York City, where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “Oh, 15 to 20 years or so.”

“But what then?” asked the Mexican.

The American laughed and said, “That’s the best part. When the time was right, you would announce an IPO, and sell your company stock to the public and become very rich. You would make millions!”

“Millions – then what?”

The American said, “Then you could retire. Move to a small coastal fishing village where you could sleep late, fish a little, play with your kids, take siestas with your wife, and stroll to the village in the evenings where you could sip wine and play guitar with your amigos.”
 
OP
BrendonTW

BrendonTW

LawnSite Bronze Member
Location
Oklahoma City
Good and ironic story, definitely some food for thought.

I don’t think it’s a sin to do things differently than what some would say is “enough.” Everyone has their own reasons for taking the route they choose. And I don’t mean to be in defense of the American in the story; reminds me of a video I saw the other day of a guy who had a big time career and was now homeless and played guitar in a band and had enough to get by. Getting by for him was merely living. While that doesn’t sound fun to me, the guy in the video had subscribed to the idea “why work so hard for all of that fancy life when I can do what I love and be homeless”.

Everyone is driven for different reasons.

Actually making me think about how just becoming an “owner” could potentially void out the purpose we’re in business in the first place.
 

TPendagast

LawnSite Fanatic
Ted you are on the same page as what I am inquiring about for the most part.

I did mean to comment on this comment you wrote from the other day and forgot to. I think you left out an option.

1 million and 10%
.5 million and 20%
10 million and 8%

For my personal preference, I'd rather be at 10/8, or 50/5 if we wanted to get crazy.

On the contrary, I know that this type of growth will take capital and I don't want to sell any controlling interest in the company - so we MUST be profitable enough to grow at the rate we want to grow without losing any substantial equity.

I am currently in a consulting relationship with a guy who grew to 17 million and sold, said he sold largely because 1) he was too focused on growth over profitability during his career and 2) sold controlling interest in effort to grow.

He was profitable all the while, but had he been more profitable, may have grown slower but retained control and then essentially was forced to sell when the private equity wanted to exit.



I think what I would be looking for as my view of being the "owner" is to NOT be making those decisions, but to offer advice to the GM or CEO when they need input. I think what you described as the "owners" job to me is the GM or CEO (very similar title in my opinion) job. I also think some of those decisions (when to buy front loader, target customer, branding) are also likely things that fall under those who are reporting to the GM or CEO and not the CEO's direct decisions.

Of course, the picture I am painting is one of a $10-$15m + company.

But thats the person I'm curious about. The one who understands where we are going. Is there someone like that out there who is willing to come into this small of a company but has been at the helm or close to the helm of a 10-15m operation?
Sure

what do you want to do as the owner then? I send you the p and l to your yacht?
Send your owners salary to your off shore account?
Scott brickman was the owner I talked to at one time
I’m not sure exactly what he did
I ate dinner at his house a few times
He came by the branch once that I remember
When I left I ended up bidding against him, which was odd, estimators day off?
Owners can do whatever they want
As long they keep signing the checks
 

TPendagast

LawnSite Fanatic
I gave up 10% equity in two separate tranches in order to retain my GM a number of years back. Freed me up to be the visionary, while he focused on the integrator/operations role.
I dislike marketing
I like to tell someone “I want more focus on aerating and lawn apps”
I don’t mind giving my input on a commercial , I just don’t want to be the prime mover or think tank.
I dislike accounts receivable
I don’t want to be the person handling everyone who doesn’t want to pay.
I dislike accounts payable
I don’t want the stress of what bills are due.

I like giving input to the budget
Being given the goals and then crushing those goals.

I like saying
I need new equipment and someone saying
You can spend 250 grand and then squeezing as much as I can out of that.

I think it’s the military in me
I like reporting up
I like it when there’s some things that are above my pay grade
Let’s me focus on what’s going on in front of me.

in the military, I really had no interest above company level operations/command.
Never wanted to be a major or colonel or general, never envied the job.

yes there’s more people like that out there.
 

TPendagast

LawnSite Fanatic
That poses a good question. Is it possible to hire a visionary CEO to build a company for you? If you think about large companies, the CEO isn't usually the "owner" ... yet there are those out there who produce amazing results. Of course, many times stock is awarded as compensation in part which is in effect giving them ownership.
In that case , the owner is a body of people , not a single person
 
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