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State of the Golf Course Industry

Turf Management & Lawn Care Business Ownership

Podcast Transcript

Cindy: Welcome to Weed Man Business Insights. This is a new podcast series bringing you practical and actionable business practices that have resulted in business success throughout the Weed Man system. These podcasts will endeavor to bring the networking we all love so much to you on a frequent basis. I’m Cindy Code, and today it’s my pleasure to be here with Terry Kurth, a sub franchisor for Weed Man USA as well as a franchise owner  in Madison, Milwaukee and Fox Valley, Wisconsin; Rockford, Illinois; and Northwest Chicago. Before becoming a lawn care business owner, Terry was also a golf course superintendent. Welcome Terry!

Terry: Thanks, Cindy.

Cindy: We also have Pat Jones with us today. He is publisher of Golf Course Industry Magazine and a long time golf industry reporter, speaker, and proponent. Welcome Pat!

Pat: Thank you, Cindy. It’s great to be here.

Cindy: So today the three of us are going to discuss not only careers in turfgrass, including lawn care, but also specifically the natural fit or synergy between golf course superintendents and lawn care business owners. So, to get us started...the last few years have brought significant changes to the golf industry. Pat, why don’t you get us started. We’ll just have a brief conversation about the current state of the golf course industry.

Pat: Well, I wish it was better than it was, but I’m glad it’s not worse than it is. We’ve seen, I think, a real settling in the golf market. We’ve been hopelessly overbuilt for a number of years, and we’re gradually getting supply adjusted to demand. We have about 150 net courses per year that are closing. We’re still opening a few, but the growth that you saw – the crazy growth in the 90s and through the early 2000s – has obviously stopped. What we’re really seeing is the courses that are focused and business-like are doing pretty well, and they are the facilities that have really taken the bull by the horns in terms of marketing, membership development, expanding their offerings to include more leagues and evening play and family activities. So golf is really in the process of re-inventing itself, at least among the eight or nine thousand well-operated, well-maintained courses that are out there. And then you see about that many again – six or seven thousand – mom and pop courses that are really struggling, and, in many cases, they may not have much debt, but they’re really struggling to keep the cash flow going. Just like the business that Weed Man is in, this is all about generating revenue, it’s all about cash flow, maintaining some profitability, and being smarter than the rest of the guys. Overall, I would say that golf is beginning to tick upwards, and we’re seeing some development and growth, but we still have some challenges ahead of us.

Cindy: Thanks Pat. Terry, do you have anything you’d like to add to that?

Terry: Well, in terms of being an ex-superintendent and someone who knows quite a few superintendents (in fact, I’m still a member of the Golf Course Superintendents Association of America), there are a number of guys, especially middle-aged, who are constantly looking over their shoulders because of what Pat just mentioned with the financial difficulties on the golf courses. There are a number of older guys that can claim that, “Oh, the conditions weren’t right.” So they fire the guy making six figures, then hire the assistant or bring in someone else at fifty to sixty grand. And the course saves a quick forty to fifty thousand dollars. So it’s changed dramatically, I think, in terms of the stability vocationally for those either coming in or currently in the business of being a golf course superintendent.

Cindy: So it seems fairly obvious, but are there specifics that keep superintendents up at night? The weather is what it is, but what other specific items or issues keep superintendents up at night?

Terry: Obviously one of the biggest issues is the weather – specifically humidity, fungal problems, or diseases that can take greens out overnight, like pythium. But the other things, too, are just the politics involved in dealing with the greens committee. One of our current franchise owners, Brandon Burns…he was getting calls from his greens chairman on Sunday afternoons. It seemed like there was never an “off time” or family time. And after a while, that just grinds on you. In the past, there have always been some of those political implications – dealing with a greens committee and all that – but it’s gotten worse. There’s that constant stress level I guess.

Cindy: And Pat, your thoughts?

Pat: Terry hit it on the head. And we’re also coming out of a really awful winter. For a lawn care professional, that’s an opportunity. For a golf course superintendent, it’s nothing but a problem. We’re seeing massive winter kill, ice damage. A lot of people are going to be really challenged to get their courses where they want them to be and have a membership that’s willing to sort of forgive and forget. It’s going to be a stressful and challenging time for superintendents no matter what. Add to that…they just lost a lot of revenue because they haven’t been able to get rounds in and get the cash register ringing this spring yet. Every course, particularly northern courses, rely on good, sunny, warm weekends in the spring, and so far we haven’t had any. It’s a pretty stressful time to be a superintendent.

Cindy: So Pat, how are superintendents and assistant superintendents reacting and dealing with the current shift in courses and related openings or lack thereof?

Pat: Well, I think this is why I believe this is such an interesting conversation, because we’re seeing a couple of things happening. We’ve seen, as the economy has slowed, as the number of courses begins to be reduced, more and more superintendents are unemployed. When a job opens up for a good superintendent job, there may be 300-400 applications in some cases. It’s crazy! And the people who lose out are not just those 50-something superintendents that Terry referred to – they’re also the up-and-coming assistant superintendents who previously would have spent three to four years as an assistant, moved into a small course as a superintendent, and then moved up the ladder. Those opportunities existed but don’t exist anymore. The assistants are largely stuck. And these are highly qualified turf professionals who have a college degree, they’ve been in that position 7, 8, 10 years. They’re fully capable of being a superintendent, but the jobs just aren’t there for them.

So that’s happening. And another thing we’re seeing, which seems counterintuitive, is that turf schools have really been challenged. The enrollment is down, the funding is way down, the research grants are way down. There’s this perception among students – and I think it had been true – that there aren’t job opportunities for people wanting to come into the golf business. Now we’re hearing from some of the major metropolitan areas that they can’t hire young assistant superintendents. That pipeline being squeezed shut for turf students is now resulting in this gap, so that when they do have assistant golf course superintendent positions open, they can’t find good, young people who are willing to come in and work for that $35,000 a year at 70 hours per week, because they know there’s no payoff at the end. It seems odd, but we’ve got this dual situation where assistant superintendents are stuck and looking for other opportunities. I get a lot of phone calls from young people saying, “Hey, what are some of my career options?” Like lawn care, like sports field maintenance. And then you’ve got this other problem where the pipeline is empty for new people coming in. It’s a very weird time in terms of careers for superintendents.

Terry: Just to add to what Pat said, I can give you an example of an individual who was at Blackhawk Country Club in Madison. Just like Pat mentioned, I’ll bet he was there 6-7 years. Awesome guy; he’s got a master’s degree. He couldn’t move up!  So now he left the industry (that specific industry) and stayed in the green industry, but now he is working with the Bruce Company – a large regional landscape design-build-maintenance firm in the Madison area. There is a lot of that going around. We’ve got a guy now that started with us that has a PhD in Turf Management, and he’s heading up our operations end of things. I think what’s finally happened is…it used to be – and I think that Pat would agree – when you came through Turf Management, it was like having blinders on. The hosanna in the highest was to immediately become a golf course superintendent. And now, I think, individuals are seeing there’s a wider world out there. Profs, from a placement standpoint, are seeing that there are other options out there for those kids that still want to stay in the green industry in general and the turf-related field in particular. 

Cindy: Terry, you kind of alluded to it, but how can these folks that thought they might be a golf course superintendent…or they are a superintendent or assistant superintendent….how can they use their agronomic education and training to prepare them for turfgrass careers outside of the golf industry?

Terry: Well, I think there are many of us who have what we would call a Manager Trainee Program. So someone may have been an assistant superintendent, or someone may have come around right out of school. We had our manager now in the Chicago branch – he’s got a master’s from Madison – and when he got out, he came to us immediately out of college, and we put him through our Manager Trainee type of period. We then moved him along with another guy and opened up Chicago, and they’re doing extremely well. In fact, we’ve partnered with him. Our holding company has the majority interest of that particular branch, but Shane actually has some ownership. So he had to put skin in the game, but what a great opportunity for a guy that’s only in his early to mid-twenties to come and begin building a business. He’s not only going to create cash flow, but he’s creating a significant asset for himself over time.

Cindy: Pat, do you have other examples to share?

Pat: Yes. I really think this is a great time to be building relationships with some of these assistant superintendents who are kind of stuck, and to try to determine which ones have that entrepreneurial sense, that business skill. Customer service skills. Not all of them do! I think that historically a lot of people got into the golf superintendent business because they liked, well, not the isolation, but that ability to kind of just work on your own, and they weren’t particularly front office sort of people. Now I think you’re seeing a generation that has those sort of skills. Communication is emphasized very heavily now with social media. Just an understanding of the business side of clubs and how they work. I really think it’s a terrific time to get to know some of those young people and see if they’re a good fit. I was sitting here thinking that it’s too bad we don’t have more robust turf meetings out there these days, where, you know, superintendent chapters and local lawn professionals get together, because you could begin to meet some of those people. One point of commonality that I think is an opportunity for people listening here if they’re interested in reaching out to some of these young people, would be local distributors. Local turf sales people. To ask around and say, “Hey, which young and upcoming assistants do you think have that good business sense? That have those good communication skills and might be a fit for one of our operations as a manager or a manager-in-training.” I think there are some ways to look into the golf market to try and cherry pick some of those best and brightest young people who may be frustrated and kind of stuck as an assistant superintendent.

Cindy: Terry, beyond the agronomics, superintendents really have acquired business skills as well with the economic times we’ve experienced over the last 3-4 years. So knowing this, can a superintendent make the leap to business owner?

Terry: Absolutely. We’ve shown it. I mean, I did it a number of years ago. The fellow I mentioned, Brandon Burns, is starting his seventh year. He’s done an awesome job down there. Here are the reasons I think: 1) they’re used to putting in a number of long hours, especially in the spring of the year. The beauty of our industry is we’re not working on Sundays. As many hours as we put in, it’s not as many as so many of the superintendents do. 2) They’re used to working with budgets. They understand business plans and budgets. That’s important. 3) They’re used to working, generally, with a younger workforce. There’s a parallel there for them. 4) I think most of them are pretty motivated – they love the outdoors, so they’ve got that.
If I were a superintendent now and maybe a little afraid to make the leap…to quit my job and say, hypothetically, go into lawn care or something. What I’d be doing is looking at who’s been one of my good employees, is outgoing like Pat mentioned, has the communication skills and things like that. So I keep my current job for a while, but I’m hedging my bet. What I’m going to do is go and try and get one of these assistants or ex-assistants, have them come in and invest some money into lawn care, then I would invest some during the early spring before I get extremely busy. I can help in sales and on the weekends and keep my finger on the pulse. And I build it. Until it’s large enough that I can transfer, resign, and go into that business. Or, if it’s going well, and the guy’s running it well, I stay where I’m at. Then I’m building another asset for myself and my family. Heaven forbid I’m downsized out – course goes belly up they fire me or something – now I’ve got an area that I can slide into and take over in the business. In today’s world I think it’s all about “Plan B.” I think superintendents are absolutely positioned well to hedge their bets by maybe looking into the lawn care end of things.

Pat: Yeah, I couldn’t agree more Terry. You know, it’s not for all of them, but some of them have that right mindset. I agree about those business schools, and I’ve said that for years. That if I ever won the lottery, I’d hire a golf course superintendent to take care of my money, because they’re very good at taking care of other people’s money. They’re conscientious; they’re careful in their approach to things.

There’s a marketing opportunity here as well. To put them out there as kind of the stars of the team, whether they’re the owner or part of a Weed Man franchise. There are a lot of opportunities here I think to reach out to the right people and bring them in as either owners or partners or part of your agronomic team.

Cindy: And from a recurring revenue perspective, time and time again the lawn care industry has shown that this service is something that is needed by homeowners and commercial property managers. So before we go, Terry or Pat, do you have any last minute or final pieces of advice for golf course superintendents or assistants who might be looking for career opportunities?

Terry: I would just chime in to touch base on what you just mentioned with the recurring revenues. I guess my business philosophy is pretty simple: you never get into a business without an exit strategy. The beauty of the exit strategy within lawn care is that it’s kind of a numbers game. It takes you a while to hit critical mass – to get enough customers where the cash flow is coming in. But even while you’re going through that period of basic growth, every customer you bring in is an asset. Another company would be willing to pay you for that customer because of that recurring revenue. They know, in a good company, that 70-80% of those customers are going to stay with you year after year. So you’ve got that. In the meantime, it’s not just the cash flow again, it’s that asset building. If you’ve got a million-dollar lawn care company and a good history of retention, cash flow, etc., then that’s probably worth $800,000 to a million dollars. There are not very many companies or industries that can make that claim. There’s just a chance for the right person to have phenomenal growth, and, again, get cash flow – plus have a great exit strategy as you sell it, either to the next generation or somebody else. It beats the heck out of waiting for a matching 401k working for somebody else.

Pat: If they have one at all, Terry. You’re exactly right. It’s a great opportunity, and I think you’ve got a real pool of committed, experienced people – you know, that the agronomics and the turf part of it they really understand – but they’re also business people. The challenge and the opportunity is finding them, reaching out to them with a story, and helping them understand how this can be the next chapter of their lives beyond the golf course. I think you really have a chance to open their eyes to what a cool thing this could be, both financially and in terms of accomplishment – of building that business and seeing it grow and potentially one day selling it, and having that kind of stability in your golden years or whatever you want to call them. I’m starting to look at my golden years now and sitting here thinking, “Well, maybe I should get a Weed Man franchise!” Because I don’t have much of an exit strategy…Terry’s got me a little worried here. I’m thinking about it, and I think we at Golf Course Industry will continue to make superintendents aware that there is more out there than just retiring with your gold watch and watching somebody else maintain your old golf course.

Cindy: Ok thank you Terry and Pat! Wonderful conversation and terrific insight; we appreciate that.  Thanks for joining us today for our Weed Man Business Insights, and have a great day.

To listen to the original podcast recording, visit Weed Man’s SoundCloud page HERE.

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