TOUCH POINTES – SUPPORTING OUR DESIRE TO ENRICH LIVES This Spring, we started a client newsletter called Touch Pointes. We have no grand marketing strategy around it…it’s not intended to increase sales or benefit the company from a Profit and Loss perspective. Rather, we’re just trying to live our culture. Our Core Purpose…the Why behind the What and How…is to Beautify the World, and that extends beyond creating beautiful landscapes. We believe Focal Pointe, at its best, impacts clients, employees, vendors, and communities beyond the specs of a contract, job description, or purchase order. We exist to enrich lives, and that’s the simple motivation behind the newsletter. Topics relevant to you, fun seasonal recipes, employee success stories, seasonal playlists…all put together to help you better enjoy life. Our Fall issue is in the works and will be going out in September. Give it a look and let us know what you think. We would love your feedback.
GRASS THAT MAKES US CRABBY I realize that most normal people don’t critique landscaping and turf conditions wherever they go, but if you’re overly observant about that stuff like I am; you’ve probably noticed a lot of Crabgrass in turf areas this year, and there’s a reason for that. Crabgrass is best controlled with a pre-emergent herbicide, applied in the early spring prior to soil temperatures warming up to 55-degrees for five days, at a two-inch depth, preventing Crabgrass (and other annual weeds) from germinating. The products and technique are tried and true…unless the soil warms up unusually fast as it did this Spring. According to our Plant Health Care Service Line Director, here are the dates each market hits that 55-degree threshold during an average year, and when we hit it this year: |
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As you can see, the 55-degree soil temperatures arrived three to four weeks early this year, depending on market. Combine the early warm-up with steady rain in KC and STL throughout the Spring and Summer – you have ideal conditions for Crabgrass to thrive, particularly along curbs and walks. And once you get behind, the game tilts heavily in the favor of the Crabgrass. Although this clearly was an outlier of a year, we are making contingency plans for next year in the event we have another early season warmup.
THE INFLATION NO ONE IS TALKING ABOUT It’s my humble opinion that organizations are best ran when rules are followed consistently, particularly publicly traded companies, or publicly owned entities, such as the United States government. The absence of consistency creates chaos, and for reasons outside of my view, the United States has had a hard time following the concept of consistency when it comes to immigration – the Biden Administration and the Trump Administration representing the two extremes…with adjacent terms. According to Claude AI, here’s the year-by-year picture for U.S.–Mexico border encounters (fiscal years, Oct–Sept), which is the standard way this is tracked: Fiscal Year Border Patrol Encounters (Southwest border) FY2021 ~1.7 million FY2022 ~2.2–2.8 million (record at the time) FY2023 ~3.2 million (nationwide high) FY2024 ~1.5 million FY2025 237,538 — lowest in over 50 years And…2026 is trending even lower, with about 8,600 apprehensions per month. I’m not an economist, but I can tell you what I believe this means: The influx of available labor after Covid masked the incredibly high inflation of manufactured goods (like Isuzu mow trucks costing almost 50% more now than they did in 2019) by keeping labor costs down. Now, take the continued cost pressure of manufactured goods, and add to that a decline in the supply of efficient manual labor, driving up wages…the only thing that’s keeping this from turning into a runaway inflation train is the efficiency gains we’re seeing through the investment in AI. So…we live in odd times, but at least for the short-term, we’re advising our customers to continue figuring a five percent increase for budget purposes. Between the high fuel costs and new pressure on labor/wages, any labor-heavy vendor you have, that can keep you in that range, is likely working hard to maintain a high level of service while still running a responsible business. And…as an owner of a company who employs immigrant workers, and who spends nearly $1M per year trying to follow ever-changing rules; I’m less concerned about what the right answer is, and more concerned whether or not the supposed right answer will remain the same after an election cycle. If you want to help me out, either put me in charge of immigration, or convince our politicians to pick a path, and enforce it for decades at a time; because what we’re doing now is incredibly difficult and expensive for the companies who try to follow the changing rules.
PRIVATE EQUITY’S IMPACT ON OUR MARKETS Over the past 10 years or so, the Landscaping Industry, along with many other recurring revenue trades, has become a target for private equity (PE) to invest in. They are attracted to the necessity of the service, the annual recurring revenue, and the fragmented nature of the industries. The model is to buy a platform company with a reasonably good leadership team, buy smaller companies in other markets, grow profits, and sell at a higher multiple five years later, making 300% on their money…provided the multiple on profits continues to remain strong without proving you can really run a good landscape company at scale. We haven’t seen PE investors enter Southwest MO yet, but OKC, KC, and STL have seen a lot of acquisitions of long-trusted, local brands. Interestingly, the PE firms allow the companies to run as they were for the first year or two…until the pressure to drive profits higher and faster becomes the number one focus. To achieve that, shortcuts to service and staffing are enacted, usually against the original owner’s wishes, and the sales teams within these organizations are under tremendous pressure to grow revenue…even if that means under bidding contracts, further driving down resources and service levels. On the balance, this has been a tremendous benefit for Focal Pointe. We’ve lost some accounts to significantly lower priced competitors, but most have returned. At the same time, we’re capturing a remarkable number of new accounts from competitors who previously had those prospects secured. As I’ve noted above, I believe inflation is a bigger problem than what’s being discussed, and if you find yourself under pressure to lower costs, please contact us before you switch to a vendor that’s promising a Focal Pointe service experience for 20% less. We are founder owned and founder led, we’re under no investment performance pressure, we’re not for sale, and we will help you navigate in the only way we know how – honestly and authentically.
WHAT MORE CAN WE DO TO BEAUTIFY YOUR WORLD? As I stated when discussing our Newsletter, our Core Purpose is to Beautify the World, and enrich the lives of those who come in contact with Focal Pointe. That sounds great, but who has time to work on those aspirational aspects of running a business, when the noise of our day jobs keeps us busy? The answer is, you don’t elevate from good to great, unless you make it enough of priority to invest in it. Therefore, this Spring we hired a former manager of Trader Joe’s, as our Director of Purpose, to help me scale the soul of Focal Pointe, with the hopes of enriching the lives and Beautifying the World of those we serve…internally, externally, and within our communities. As our Director of Purpose, Julie Culberston, gets settled in; her and I will likely be looking for client volunteers to serve on a steering committee for us to better understand how we can be more impactful for our clients. As the world, and our Operations teams, runs to the shiny and numerous benefits that all things technology will have to offer in the years to come; we also have a team that is running to the authenticity and durability of the human experience. A real person on the other end of the phone, rejecting the out-of-control tipping culture, and great service because it feels good to serve others. Landscaping, and other thoughtful, intimate spaces, may soon be the tonic that cuts down on all things artificial, and we believe we have a unique opportunity to provide that for the world, and beautify it in ways that go beyond what we can see.
OVERWHELMING GRATITUDE On June 8th of this year, Molly and I celebrated our 30th wedding anniversary with our four children. Molly and I started dating in college, and sometimes on the weekend, we would drive in nice subdivisions and shape our dreams together. “Maybe someday, we’ll be able to afford to live in a house like this…or drive a car that doesn’t need oil in between oil changes… or…or…or.” And here I sit, wrapping up a Summer Update to people who feel more like friends than clients, leading a company that has surpassed anything I ever imagined.
And the list can go on…but can also be summarized with one word…gratitude. I get to lead 675 of the best people the world has to offer, serving clients who have given us chances before I thought we deserved them. Loving a wife who, during the company’s hardest times, never waivered in her belief in me or the purpose of Focal Pointe. Raising humble kids who viewed Focal Pointe employees in the same light as superheroes, literally dressing up as Focal Pointe crew members for Halloween. And now, after 28 years, all I want is the impossible. I want to create a company that provides more meaning and purpose to you, the Focal Pointe team, and the communities we serve, than it has given me. Through the difficulties and accomplishments of leading Focal Pointe, I have come to learn that true success has nothing to do with the house you live in, or the car you drive. True success comes down to our ability to recognize all we have to be grateful for, including the opportunity to further Beautify the World. That is the gift and responsibility you and the Focal Pointe team have blessed me with, and I couldn’t be more grateful. Sincerely, John E. Munie President |