The landscaping industry, joined at the hip with the construction sector, has been battered by the big freeze on large-scale developments of recent years, yet Cherry’s landscaping company and wholesale nursery have survived while many of his competitors crashed.
In fact, Cherry’s prowess as a businessman is such that his struggles had always been more about how to grow than about how to survive.
Growing a business in such an industry is exponentially more difficult than merely surviving. Because landscaping is a combination of the two industries that banks are most allergic to – construction and agriculture – Cherry has never been able to get as much as an overdraft, let alone a business-expansion loan from the banks that could take his business to the next level.
Using only the cash flow generated by the business he started in 2003 with 15 workers, he painstakingly grew to about 150 workers over the next ten years, despite the financial crash that decimated the industry.
So when Business Partners Limited (BUSINESS/PARTNERS) granted him a business-expansion loan in 2012, they did not feel the need to suggest a business mentor as part of the deal, as they often do for clients who need business guidance. What they saw was a solid businessman with a keen sense of business and financial management.
But Cherry was thinking deep into the future. When BUSINESS/PARTNERS sent in senior business consultant John Whitcombe to do a due diligence investigation into the suitability of Urban Landscape Solutions for a loan, Cherry hired him as business mentor.
“I felt I needed financial mentorship,” says Cherry. “I know horticulture and I know how to market, I know how to find work, but I needed a financial mentor (to show me) how to borrow money, how to go about financing things, and understand the ratios that banks look at. That part was where I needed help.”
It probably helped that Whitcombe, during the due diligence exercise, found out among other things that Cherry’s auditors had mistakenly signed off on a weak balance sheet for the business by failing to account properly for the stock in the wholesale nursery.
Ironically, the thing that struck Whitcombe when he first looked into Urban Landscape Solutions was how skilled Cherry was at financial management. “The thing with Eric, quite honestly, is he keeps his hand right on the money. He runs the organisation based on cash management. He knows what money is going out, he signs the cheques, he knows what’s coming in.”
Whitcombe, who has years of experience first as financial manager and then MD of several businesses in manufacturing and retail, stepped out of the corporate world about ten years ago and has been consulting small and mid-sized companies ever since. Over the years, his clients have differed enormously when it comes to style and culture. In all of them the single most important success factor is the ability to manage cash flows, he says.
Whitcombe’s involvement in Urban Landscape Solutions clearly illustrates that mentorship does not only have to be about basic business skills, but about higher-order thinking.
He started mentoring Cherry at the end of 2013 with the brief to look carefully at the financial modeling that would propel the company to the next level. He looked at customer contracts, profit margins, the financial controls and management, and helped Cherry to formulate his strategic plan.
In just two years, turnover increased by 234%, gross profit by 227%, and resulted in an operating profit healthy enough to fund future growth.
Today, Cherry has more than 300 employees, all employed full time, and his order book indicates another doubling of his business in the foreseeable future.
Meanwhile, the relationship between Cherry and Whitcombe has deepened to something more than mere consulting work.
“As a business owner you’re almost on your own,” says Cherry. “There’s nobody to sound things off. You need somebody like that to ask things like ‘Is this a good way to go?’, ‘Is that a good idea?’.
At the end of the day I make the decision, but now I have somebody I can talk to. For me it’s made a huge difference.”
From Whitcombe’s perspective, seeing the spectacular growth of Urban Landscape Solution is the reason why he stepped out of the corporate world ten years ago. “My driver is not how much money I can earn. My driver is seeing others succeed, and here is an example of a business owner who really gets it, who makes a go of the advice I’m able to give.”