Our Level Up series shares the strategies that help landscape and lawn care companies get to the next level.
When Deva S. Khalsa acquired a lawn company, Nanak’s Landscaping, in Miami in 1977, in true entrepreneurial spirit, he threw caution into the wind and moved to South Florida.
He soon discovered the previous owner was only bringing in $800 a month while operating costs for the company were $1,200 a month. Over time, Khalsa was able to turn the residential lawn company into one of the largest landscape contracting companies in the state of Florida.
Nanak’s earned $17 million in 2020 and has grown from one employee to 180 employees during the peak season. CEO Kevin Hunt says their next goal is to reach $50 to $60 million in revenue in the next five years.
Expanding Services
Nanak’s current main customer base is commercial real estate, industrial spaces, retail and some condos and HOAs.
The company first sought landscape maintenance and new plant installation work with high-end residential homes. Yet after being presented an opportunity to take on a small commercial retail property in the early 80s, Khalsa found commercial customers easier to deal with so by 2000 the company transitioned completely away from caring for single-family homes.
In 1998, Nanak’s brought on several key people, adding on fertilization, insect and disease control and arbor care divisions. Hunt joined the team in 1999 and when the company’s certified arborist left rather abruptly, he stepped up and became a certified arborist to lead their tree trimming division.
After subcontracting irrigation work over the years, Hunt eventually found a person with an irrigation license in Broward County and brought the service in-house. Hunt says by 2005 they were a full-service landscaping company. In 2000, they had added a nursery under the belief that they could save money on their plant material by cutting out the middleman.
“Turns out, nursery managing is a whole other thing and that’s something we were not good at,” Hunt says. “We had a seven-acre nursery and a 10-acre nursery, and we eventually sold the seven-acre nursery. We still have the 10-acre tree farm. We’ve got some decent royal palms and some other stuff out on that property. It’s mostly become the staging ground for our Baldwin County operations, but we still have some stuff growing out there.”
Hunt says they’re dabbling in it right now, but one of their 2021 goals is to bring in a nursery manager.
“If that happened, that would be very much a game-changer,” Hunt says. “Not quite there yet, but we’re thinking about it.”
Keys to Growth
Hunt says being well-positioned in the market and having competitive pricing has helped their company grow over the years. He notes that Southeast Florida is different from other markets in America and Florida and their ability to navigate that and still provide quality service has been a linchpin.
Hunt explains this region doesn’t do 40 services annually. Sometimes it’s 38 services, but usually, it’s 30 to 32.
“You’ve got these very wild service swings,” he says. “It’s not consistent from week to week. It presents a real challenge with scheduling. When you’re on 10-day cycles, as opposed to 7- or 14-day cycles. This is a really strange place in that regard.”
Nanak’s consistency has allowed them to work with the same customers and develop 10-, 15- and 20-year relationships.
“I think our competition has been inconsistent, especially at the national level,” Hunt says. “Because we’ve been well connected and well-positioned, we’ve been able to pick up the slack when they’ve dropped the ball.”
Hunt says when he came to the company in 1999, they doubled in revenue a few years. They went from $1 million to $2.5 million in revenue very quickly.
He says the drivers of the growth then included him coming to the company along with the hiring of a real sales rep. After that, Nanak’s continued to grow at a 30 to 25 percent rate for another few years. They’ve leveled out to around 10 percent growth a year currently.
The company brought on another sales rep five years ago and Hunt says they really started growing then. They are talking about bringing on another rep in 2021.
“I think it’s one thing to grow 10 percent when you’re a $5 million a year company, it’s another thing to grow 10 percent, when you’re at $10 million a year company,” Hunt says. “Those numbers get bigger and bigger and if you’re still doing 10 percent that becomes more and more impressive.”
Challenges Over the Years
There have been several hard times for Nanak’s years of business where they almost had to close. In the 1990s, the consolidation of landscaping companies and economic troubles in the real estate market caused price to become the only deciding factor for clients. However, a loyal customer base and the economy’s rebound kept the company alive.
After 9/11, it was a flat year for the company. Hunt says Nanak’s was heavily entrenched in the office, industrial and retail markets. They weren’t doing a lot of HOAs at the time. The commercial customers were very fearful and would not add or subtract any services.
“It was six to eight months of holding your breath,” Hunt says.
Nanak’s came close to having to close their doors again in 2008 due to the economic downturn.
“That downturn was scary,” Hunt says. “We had to drop our prices significantly. Thankfully, we were positioned well enough with our client base to where we were able to have conversations about those things.”
Hunt says they reworked their agreements with people and were able to make it through that time without too much collateral damage. He says while 2008 to 2011 were bad years, they were able to maintain moderate growth.
Currently, Hunt is also unsure what will happen with the office market as people are realizing due to COVID not as many people need to work from an office space. He says they’re being mindful of how the office market will be affected.
Labor has also been a consistent challenge with recruiting and retaining workers over the years.
Leading up to 2008, Hunt says construction was out of control where if you could swing a hammer you could demand $25 an hour and Nanak’s just couldn’t pay unskilled workers $25 an hour.
“We just can’t pass that cost through to the commercial clients, or to anybody really, that’s not even counting profit, overhead and everything else that goes into it,” Hunt says.
The company is taking a more diligent approach to employee retention and they’re looking at some benefit changes. Nanak’s is currently going through a culture reboot.
“I think at all times you want to maintain a positive, supportive environment for your team members,” Hunt says. “But I don’t know that it was really happening in a lot of ways. And in some ways, I think that that attempt to keep team members, to be almost overly understanding with certain team members allowed certain team members to stay on maybe a lot longer than they should have been to the point of which those team members became toxic, and then it has the obviously the opposite effect.”
In the last six or seven months, they’ve taken a harder stance with team members’ behaviors.
“We’ve had some turnover, but I think for the better,” Hunt says. “We’re back to establishing acceptable conduct.”
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