Passing the business on to the next generation is a common hope and exit strategy for landscape company owners.
Photo: Frederico Outdoor Living
Russ Frederico started his company, Frederico Landscape Management, based in Lehi, Utah, over 40 years ago. As an elementary school teacher, he was looking to supplement his income over the summers by mowing lawns. After a few seasons, he started doing landscape construction projects as well and ended up switching to running his business full-time.
His son, Adam Frederico, had worked one summer for the company but went on to do technology and accounting consulting. After earning a master’s degree in business, he decided he wanted to try his hand at running a small business in Chicago.
“As I talked to my dad, he was like, ‘Well, I’m trying to retire,’ so it just kind of worked out,” Frederico says. “I said, ‘Well, hey, why don’t I buy the family landscaping business and continue the legacy.’”
They spent a year planning while he still lived in Chicago and Frederico officially bought the business in January 2021 after shadowing his father for two months. He has just completed his third season running the business as general manager.
Rebranding
Frederico admits there was some pressure taking over the business as his father is well-known in the area. However, Frederico says he hasn’t been afraid to forge his own path.
“I’ve definitely put my own flavor on things,” Frederico says. “We’ve changed quite a bit. In the beginning, I ran a lot of things by my dad. I said, ‘Hey, I’m going to change the logo a little bit. I’m going to change the name of the company a little bit. We’re going to chase these jobs.’ So, he was definitely open to it and trusted my judgment. He was very involved in the beginning in teaching me how to price things and work with customers and do things at least the way that he would want them to be done. And then, as we’ve added to the team and additional leadership team members, we’ve tried to just expand upon that foundation.”
As Frederico realized his team’s passion is creating outdoor living spaces, he decided their company name should match that. Now known as Frederico Outdoor Living, the company is focused on the design-build side of the business.
After crunching the numbers, Frederico says they determined that if they could do one to two more big landscaping jobs a year, it would cover the maintenance division’s revenue, so they decided to eliminate the service.
“At the time, we just didn’t have a good handle on maintenance,” Frederico says. “I personally just think it’s a different type of business. It has different economics. It has different ways to build relationships. We felt like we could invest more time and energy into the design-build side. I think in the future it could help us round out our business a little bit more. I don’t know when we would get back into maintenance, but it’s not off the table.”
Frederico says they are not looking to build the company up to sell it or merge it with another maintenance company, so that is another reason he was okay with removing the service for the time being.
Starting Fresh
Another major change the company experienced was staff turnover. After acquiring the business, Frederico ended up letting go of everyone on staff except the office manager over two to three months.
“I was just very focused on building the right team,” Frederico says. “It became apparent that many of the team members didn’t want to see the rules change. There were a lot of toxic individuals that didn’t have the company’s best interest.”
As they implemented new technology like GPS tracking and time clock software, Frederico unearthed bad behaviors, including egregious usage of equipment and vehicles, as well as two- to three-hour-long paid breaks. He said as they implemented new rules, he either let problematic employees go or they left on their own.
Starting fresh, Frederico decided to rebuild his team by going through their old employee records. He found team members who wanted to come back because they were changing things. They also recruit new employees through local job boards, digital billboards and employee referrals.
Frederico says they retain their team members by listening to them. They have monthly check-ins where each employee sits down with a member of the leadership team. He says they will discuss what is going on with them personally, how they feel about their job, and if there’s anything they can clarify.
“I think that has been really helpful just to stay on the same page,” Frederico says. “We tend to just be so busy in this industry, and because we’re out and about, we’re not all stuck in an office. It’s hard to check-in. So we at least sit down once a month to get a little deeper look into how somebody’s feeling.”
He says his team also feels their ideas can be shared and heard.
“We want the whole team to feel like they are a part of the future,” Frederico says. “Our leadership team doesn’t have all the answers. We need everybody’s input in order to make this a great place to work.”
As the company grows, Frederico acknowledges that some policies that may have worked two years ago don’t work now, so he’s always listening to what culture-building activities the team likes. Frederico says while they have been recognized as a great workplace, there are always things they can improve upon.
The company also practices open-book management and recognizes team members weekly for displaying their core values.
Growing the Business
Frederico says their keys to growth have been finding talented individuals, refreshing their branding and marketing for their target market, and seeking bigger jobs.
“If we continue to do jobs that are, for lack of a better term, easy or table stakes, then the team’s not learning and growing,” Frederico says.
He says they will do some projects at cost so they can test out a new product or process on a project. He says it’s helped them offer more variety to their customers.
They’ve also developed relationships with different custom homebuilders and that has helped them expand their skill sets and improve the target market they’re after.
“A key part of our strategy is to, instead of primarily working with homeowners, get involved earlier in the process by working with custom home builders,” Frederico says. “They’re actually our primary clients or at least our lead generation source.”
He says there are few benefits to getting involved earlier in the home-building process. One is that they can work with the general contractor or architect to ensure the landscape is cohesive with the overall theme of the custom home. Frederico says it also helps them build a relationship with the homeowner. They’ve gotten additional jobs by working in new neighborhoods early on.
Utah is still growing, with more people moving to the state. Frederico says that while there has been concern about an eventual pullback, they haven’t seen any yet.
“I’m very bullish on the Utah market and the growth that’s happening,” Frederico says. “We even see that with more contractors joining the industry all the time. There usually is not a day that goes by that I don’t see a new general contractor or landscape contractor driving around.”
The company is currently at $3.5 million in annual revenue. Frederico doesn’t expect them to grow beyond $10 million, but he admits he could be surprised by great opportunities.
“If there’s more work and we can find the talented craftsmen needed to get the work done, then I think we would grow,” Frederico says.
As they’ve scaled up from two landscaping crews to five, Frederico has found efficient operations challenging as it calls for more trucks, equipment and project management.
“The market is growing well enough that there’s a lot of work out there to be done,” Frederico says. “It’s just down to operational efficiencies and procurement, buying things on time and training the team to be able to execute it in an active and quality manner.”
Frederico says being an NALP member has allowed them to provide resources to the team and participate in different types of training.
“We’ve gotten lucky in a lot of instances, but the hard work and diligence of the team has gotten us to where we are and so I hope that we’ve got many more years to come with keeping this business going,” Frederico says.
