Budget Your Business

Owner Insight: How Eric Ellington Keeps a Pulse on Leadership, Scaling, and Finances in His Grounds Management Business

• Scott Geller • Season 1 • Episode 37

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E#37: In this episode, Eric Ellington shares how discipline in financial management, strategic planning, and team training shape his company’s success. He emphasizes the importance of cash flow over vanity revenue, setting clear EOS-driven targets, and investing in marketing, branding, and customer experience to fuel long-term growth. Eric also highlights the value of trusting your gut, recognizing red flags, and making decisions that align with the company’s mission—even when turning down lucrative projects. At the core, his message is clear: profitability, transparency, and consistency will position a business for sustainable success.


Book Recommendation: Traction by Gino Wickman and Who, Not How by Dan Sullivan

Find out more about Eric Ellington at: 

eric@glenallengrounds.com get a reply within 48 hours

https://www.linkedin.com/in/eric-ellington-4658b63b/ 

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Eric Ellington:

I have found, too, that it's very challenging for me to motivate my leadership team when it comes to financial data if they don't know what the data is.

Scott Geller:

Right.

Eric Ellington:

So you could be talking all these numbers and they may not have a clue of what you're talking about.

Scott Geller:

Welcome to Budget your Business, the podcast for small business owners who want to learn how to financially plan for every aspect of their business. Today I have Eric Ellington of Glenn Allen Management. How are you doing, glenn? I'm good.

Eric Ellington:

Scott, how are you Good? Thanks for coming in. Yeah, I appreciate it. This is the first time I've been asked to be on a podcast, so I'm very excited.

Scott Geller:

Well, maybe it's just first to me. Right, that's right, you're viral.

Eric Ellington:

Yeah, I hope so. That would be nice, absolutely.

Scott Geller:

Yeah, so Eric and I you and I met maybe almost a year ago as part of a CFO council where I came in and just kind of sat in on some discussions with some CEOs in the Richmond Virginia area, which is where we're both located, and it was mainly around financial discussions with their business and as part of those discussions I was personally. I really enjoyed your perspective and the fact of you know. I was really impressed with your knowledge of the business, of your own business, where everything was how you financially ran it and really you've owned that yourself right.

Eric Ellington:

Yeah, so that's one of the things that I've kind of taken really significant control over. And I didn't start out that way, which is kind of funny. You know I didn't. I wasn't an economics major in college, I was a business major. I had a concentration in entrepreneurship. So I'd always wanted to do my own thing, and the more that I got into it and the more that I kind of was figuring out how, as a business owner, how am I supposed to manage my company? And we own a landscape company, so kind of take the green industry out of it.

Eric Ellington:

There are a lot of very similar things that somebody like you and I might face when it comes to businesses and how to look at financials, and, and some key things for me were like making sure my books, whether it's a P and L or whether it's a balance sheet or anything like that, is organized in a manner that I could understand it and you know if we kind of have four different divisions, you know if there's construction-related stuff, that that is in its own bucket and if it's snow-related stuff, the time, the expenses, they're all accounted in the snow category. So making sure that the things that I was looking at were in their respective buckets was very important, very important.

Scott Geller:

And, Eric, how long did it take you to get to that point?

Eric Ellington:

Yeah. So I would say that our books were all over the place for the first three or four years. I had a general understanding of it, but not the understanding that I have with it now. We had a consultant come in probably three years after we got started three or four years and he really helped us lay out our P&L and expense categories and he understood that we had different classifications or buckets of work or scopes that we were doing. So that sort of recommendation and then some assistance from my accountant. So that sort of recommendation and then some assistance from my accountant, we really got our expense categories cleaned up, reclassed everything and kept it in a nice neat format to where we could see it really on a day-to-day basis but understand it more. That was a big turning point for us.

Scott Geller:

And just I guess, before I kind of go much further. Eric, why don't you tell?

Eric Ellington:

us a little bit about Glen Allen, so we have some perspective, I know you've been in business for over 10 years, but give us a little one Hit our 12th year this past April, which is great.

Eric Ellington:

We're a landscape and hardscape construction and maintenance firm here in Richmond Virginia. We're probably 75% on the residential side and then 25% commercial. A lot of our commercial portfolio stems from we do a gentleman who may own a house, we do his property and he owns a business and has a building. That's how a lot of that got started. We do some smaller HOAs and then we have some good relationships with some property managers here locally. Not a lot of the big ones, a lot of them are local to the area so they appreciate that kind of communication and that level of service and we're doing anything from pool construction, outdoor kitchens places, significant patio work, from pool construction, outdoor kitchens, places, significant patio work.

Eric Ellington:

We do a lot of landscape installation work, whether residentially or commercially, and then we have a full maintenance division as well. So we're about as turnkey as we can get where we'd like to be in the Richmond area On a given day. On a good day I probably have 45 employees, on a bad day I got 40. So we kind of hover in that area. On a given day, on a good day I probably have 45 employees, on a bad day I got 40.

Eric Ellington:

So we kind of hover in that area. A lot of what we have to deal with and from a financial perspective is we're a heavy, heavy asset-based business. We probably have somewhere around $1.5 million when it comes to trucks and trailers and equipment and all that stuff. So that is a big part in managing sort of the financial side of what we do and those repairs can be costly.

Scott Geller:

And I imagine the other side of it is mainly people. Obviously you have some operating expenses just to keep the lights on and a little bit of rent somewhere. You have to have that equipment somewhere, but is that?

Eric Ellington:

kind of the general structure. Yeah, labor is our biggest expense, and then managing that fleet is probably up there in a close second. I mean, everyone has insurance and our workman's comp is pretty substantial, but when I think about what it takes for us to operate on a day-in and day-out basis, it's the people and it's the equipment.

Scott Geller:

So how do you financially? How do you think about those separately, or maybe you kind of think about them together a little bit, but how do you manage those two big buckets of expenses?

Eric Ellington:

Yeah, so you know, we're all everything that we do is kind of based off of a man hour, right, and if you can drill it down to that one sort of piece, and if you can figure it out and, by the way, if you do figure it out, please let me know.

Eric Ellington:

But if you can figure that out, that's the key. All of our stuff is estimated based off of how long we think it's going to take to do something. If I show up to Scott Geller's house, how long is it going to take me to cut his grass? And managing that time from travel, making sure that the crew is operating efficiently, making sure that the equipment that they have is operating efficiently all factors into that one sort of man hour. And again, there's so many variables that we deal with on a day in and day out basis weather, traffic, I mean economic environment, right, at one point, our labor force and I would say this for any blue collar industry is becoming more and more expensive to keep Right and at the end of the day, the consumer is going to have to pay for that. So there are all these talks on social media and private equity groups are big into these blue-collar industries.

Scott Geller:

now it has been. I've seen a lot of that lately.

Eric Ellington:

Whether it's HVAC, whether it's landscaping, plumbing, electrical, these things are and if it's a good business and it's run correctly, I mean for whoever owns it. I mean, even if they do dump it down the road, it ends up being a pretty significant you know influx of cash and good for the owner. So managing that one hour no matter if you've got five guys or 50, is the most challenging part and is one of the most important.

Scott Geller:

So that man hour then, I imagine, is kind of the key metric for you.

Eric Ellington:

Yeah.

Scott Geller:

Right, okay.

Eric Ellington:

Yeah. So when we look at you know we might have. If we have 200 properties that we manage on a weekly basis, let's say it's 5,000 hours a week worth of work Well, we better be coming in at or below that number and if we're not, you know we're going to see that in our gross margin fluctuation and stuff like that. So it's very critical to make sure we're getting that right.

Scott Geller:

Well, I'm really glad you threw the gross margin out there, because that's always one of the metrics I'm always looking at when I talk to companies or asking companies about. If we talk about metrics a little bit. You had the man hour, you had the gross margin Are there any others? That you key in on.

Eric Ellington:

Another thing that we kind of face, too, is we have a lot of subcontractor work in our business where, whether it's a carpenter, whether it's a pool contractor, whether it's an electrician, how those numbers work into our P&L and how hundred grand and use a gross margin to calculate what that charge to our customer is going to be.

Eric Ellington:

I personally feel the markup percentage is going to be lower if you use that than if you use a gross margin. But you don't want to price yourself out of the job. So that line that you're kind of flirting with when it comes to that stuff, you really got to hone in on who's the type of customer that you're dealing with and are they going to appreciate? You know, glenn Allen, managing that scope and there is a price for that and a lot of customers understand it. It's just where that line is drawn is always the hard part it.

Scott Geller:

It's just where that line is drawn is always the hard part. Okay, so I'm sure our listeners can already tell you've got a really good handle on your financials and your profitability. Is there anybody else as the owner and the founder? Is there anyone else within the organization that you also pull in or kind of works with you on how you financially manage the business?

Eric Ellington:

Yeah, so I would say on a week-in and week-out basis, right, we have a leadership team that we talk a lot about financials and where we need to be, whether it's, you know, the construction division, maintenance division, enhancement division. I look at and manage a lot of that myself. If I'm thinking of something that's a little bit outside of the box or maybe unique in how we want to do things, I will pull in my accountant and bounce stuff off of him and then you know, there's I kind of call it my like business group, right the people that I would go to for advice or just to make sure that what I'm thinking isn't sounding asinine and just kind of work ideas off of. But if I had to pin, it would be my accountant, because he's in the books more of a routine basis and him and I have been really good friends since kind of day one and he's been with me since day one, so he's got to talk a lot of sense into me sometimes.

Scott Geller:

That's good to have the rock there, right.

Eric Ellington:

That's right, that kind of deal, that's right.

Scott Geller:

So I am curious and this is always something that really varies across owners, industries, you name it how much do you share, like the financial? How much do you choose to share with your leadership team?

Eric Ellington:

Yeah, I think number one how long that that leadership team has been intact is very important. If you, you know, we've had situations where we've had a couple people that have kind of moved in and out of that sort of room, right Right, once you get your team to where you trust everyone and everyone's aligned on the thought process and you feel that the financial data is very important for them to understand so that they can do their jobs more successfully, is I think that's the time right. I think it's you know when whether it's two people, one person or five, when you have those discussions, that you know that that information that you're giving them is not going to leave that room is when you've kind of hit it and when you can talk about it. And I have found, too, that it's very challenging for me to motivate my leadership team when it comes to financial data if they don't know what the data is.

Scott Geller:

Right.

Eric Ellington:

Yeah, so you could be talking all these numbers and they may not have a clue of what you're talking about. I do a lot of year-over-year comparisons, month-to-month comparisons and stuff like that, and we'll look at that as a leadership team and say you know, hey, this is where we kind of were last July, this is where we are this July.

Eric Ellington:

Do you all notice anything different? And then that sort of tees up conversations on okay, well, what did we do differently last July? To where it was better than this July, and we kind of look at stuff like that. You know some of the notes that I have kind of written down here. Right is, your revenue could be increasing. If your revenue is increasing by 10% but your labor and materials are up 20% to 25%, you've got a problem. You have a problem, that's right. You better hone in on that quickly and figure it out.

Scott Geller:

That's called bad.

Eric Ellington:

That's right. That's right, and that is you know, knowing your numbers and watching them. People might say that I'm a little bit more obsessive over them than I probably should be. My accountant tries to get me out of them every now and then. I'm like man this is how I keep a pulse.

Scott Geller:

Let me keep my pulse, but knowing your numbers is is very, very critical yeah, yeah, and I like how you it sounds like you're kind of educating your team not just throwing something out there and expecting them to understand it. You're helping them, helping educate them so they do understand, and I imagine they I'm sure they probably bring something back to you to help institute changes or a different way of doing things.

Eric Ellington:

And it's you know. These guys have been in the industry for longer than I have right. So it's always a very interesting dynamic and a back and forth, because I'm trying to introduce new ways to think about stuff and specific to our industry and they're not used to that. But the challenges that business owners I would say as a whole, but specifically in my industry have had to deal with in the last kind of five to six years have really changed what guys like us are having to do to keep customers and to get new customers and trying to get some of those guys that have been doing it for 25 to 30 years right.

Eric Ellington:

It's hard, slowly, but surely, as long as I can kind of chip away at some thoughts, that's all I'm trying to do. Yeah, it is, it is, but the things that are broken and the things that I've kind of watched and have seen from a financial side. You know, I may not have the best solution, but we're going to talk about it, we're going to identify this problem and we're going to figure out a way to fix it as a group. And that's where the leadership team, I think, is very important. That way, it's not just me making that decision.

Scott Geller:

Right, right. So what are some of the things I mean? You talked about some of these. Some of the other individuals in the team has been in this business for a long time. You've been running this business for a little over 10 years. What are some things that you would have done differently five years ago, or maybe?

Eric Ellington:

even 10 years ago that you're doing now.

Eric Ellington:

Yeah, I think probably one of the main things is, if you can afford it, to hire salespeople and to hire people that are really good at hunting and not so much gathering. You got to have someone who's hungry. Right, without sales and I listened to a lot of Mark Cuban and kind of what he's done and how successful he's been but, like you know, without sales you have no business, right, yes, and you can't be complacent in that process. Right, it has to be pretty regimented, it has to be quick. We're seeing that a lot, especially in our industry.

Eric Ellington:

When people during COVID this was huge and when people are ready to spend money, especially if it's a want and not a need, you have to be able to capitalize on that as quickly as possible. At Glen Allen, we have a 24-hour rule to where, if somebody calls in our teams whether it's myself on the construction side or our account managers they have 24 hours to make contact with the person and determine what exactly they're looking for and to set expectations. You know, okay, well, we're going to meet next week. This seems like a pretty simple project. After we meet, it should be three to four days, or I can get you a number and we better hit that mark.

Scott Geller:

And do you? Sorry to interrupt. Do you track that as well to see if you do, or can you?

Eric Ellington:

It's hard to do because without those respective people kind of going in and filling out some type of, you know, time tracker, right, I do it to where, if I will input the inbound call into a customer database, it has a date on it and I kind of look at that. You know, okay, when was the meeting set? And then when we go in and we start working on the proposal, I actually have a time tracker sort of tab to where I expect whether it's myself or whether it's my sales team how long did you spend working on this proposal? What did you get done, you know, and so it's unofficial but it's something.

Eric Ellington:

And that's probably the second thing that I would have started a lot sooner is creating SOPs and processes for how we operate. You know, there should be no reason why, as long as somebody has industry experience, we should have some type of manual for them to sort of come in and we can be, like, you know, in downtime. Here's a 50-page binder. It's got everything that you're going to do in this organization. Read through it, and these are pretty standardized expectations. You will be expected to kind of adhere by these once you get up and rolling. So hire salespeople and creating those standard operating procedures. I wish I would have started five years ago.

Scott Geller:

And how do you think that impacts you financially today, specifically those two pieces.

Eric Ellington:

Yeah. So I think for me, number one, it's going to take out a lot of gray area and a lot of questions. If I can tell someone well, okay, refer to this sales process. Right, Are you following the sales process? Are you following it to 100%? Are you following it to 80%? Are you following it to 40%?

Eric Ellington:

If you're following it to 40%, we probably have a problem, right? So I think it helps you identify who's going to be successful within your organization and who isn't. And if you have issues or situations to where they're just constantly not following those procedures, okay, then you know you might have a people problem and that you might need to move on from that person. So, having these in place and being able to have someone that follows them well, if they can't, then you probably have saved yourself a little bit of money by moving on to somebody else. So, and I think it, it sort of standardizes that whole sales process. So if you have good salespeople and you have identifiers or just a one-sheeter of what they're expected to do, depending on what they're selling, there should be no gray area. The numbers should sort of speak for themselves if they're soliciting 10 clients a month or something like that A lot of times in our organization and the niche that we're in we might have to bid 10 jobs to get two, maybe even four.

Scott Geller:

I guess the quicker you get through that process, the quicker you know Exactly.

Eric Ellington:

Which you know, you're a big proponent of cash flow. That's right, that helps cash flow Absolutely. So the speed in which we get things done is very important.

Scott Geller:

And how do you think about the future of the business and whether strategically or financially, but how do you kind of go about? What is my business going to look like?

Eric Ellington:

I don't know, maybe you fill in the blank there yeah um, you know, what we do is not rocket science. It's not necessarily pretty. There are some situations to where it is a necessity, kind of on the commercial side, right. So I think identifying areas that you want to target that may be over and beyond what you're currently doing. You know, getting outside of our comfort zone a little bit is very important. I think a successful marketing campaign, right, is going to bring in clients that you may not have thought you would have had an opportunity to get if you didn't have a successful marketing campaign. I spent a lot of money on high-end images when it comes to these big projects, and so that attracts the next big one, right. You know, having a good social media presence, all the and those, these are big investments, right.

Eric Ellington:

All that thing all those things are going to continue to kind of help you position yourself to be able to get those bigger projects down the road. Bigger maintenance, customers and properties you know how clean your, your fleet is in our instance is is very important to me, and the uniformity and making sure all of our stuff matches All those play a big part and I think if we can do those things right and we can communicate effectively and be transparent in how we operate, we're going to continue to have opportunities. Again, I think over time and COVID has shifted this a little bit the customer expectation gets heightened every year and we have to be able to meet that you got to meet it right, Because if you don't, somebody else probably is that's right, that's right, and if we can do that, we will be just fine.

Scott Geller:

And do you give yourself future targets, like financial targets?

Eric Ellington:

oh, yeah, we're. We're a big proponent of EOS. Shout out to a white for helping us implement that, and EOS helps us set those targets as little as 90 days, right, so we'll go. We'll do a 90 day. We'll do go. We'll do a 90 day, we'll do a year, we'll do a five year and we'll do a 10 year. And as a part of the leadership meetings that we have, we look at those frequently to make sure that we're on track, to make sure that we're aligned with what those goals are. And if we're not on track, okay, what do we need to do to get back to it? And revenue is one thing, but profitability is another one.

Eric Ellington:

Revenue is kind of the vanity, whereas profitability is what helps you sleep at night, that's right, that's right, and there are some times where I lose a lot of that if we aren't successful in that regard. Back in the day, it was always about how much revenue you were doing and what your line of credit was. I don't care.

Scott Geller:

Ideally you want to use yeah, all right. Well, do you have any other? You know, wrapping up here with any other do's or don'ts that you recommend business owners think about when they're financially managing or financially thinking about the future of their business.

Eric Ellington:

Yeah, this could be an entire podcast in itself, right. So training your team is very important. Your team is very important Spending that time to making sure that, whether it's your mid-level office personnel or your guys in the field, or your mid-level office personnel is responsible for training the guys in the field, making sure that they know how we as an organization do things. Okay, it depends. You know, even if it takes a while, you want to work on that. The best decision for the business may not always be the right one and your team may not align with it. There's a lot of work that we've turned away because we felt like it just wasn't right for what we're trying to accomplish within our organization.

Scott Geller:

That's hard to do.

Eric Ellington:

It is very hard to do, especially if it's a significantly decent-sized project. Trust your gut. There are red flags that you should stick to, and don't let the dollar signs cloud your judgment. Right.

Scott Geller:

Don't let it blind you. Right, because it's going back to the revenue is vanity, but the profitability is. It'll kill you. It'll kill you, it'll kill you.

Eric Ellington:

So don't let others sway you. Whether it's a customer, whether it's an employee, Stick to what you feel is right and what you feel is going to be best for your organization.

Scott Geller:

Any other do's or don'ts that you? Want to share. You've thrown out a lot of them, I know.

Eric Ellington:

That's kind of all I had written down. It's just pay attention to those red flags, Don't be afraid to talk to people that help you make these business decisions, and whether it's your leadership team, whether it's, you know, your best friend, whatever.

Scott Geller:

So yeah, okay, great. Well, this is kind of a good time, I feel like, before we continue getting into a lot of details around or which I think we could continue on that. Oh yeah, uh. So we always eric, we always like to wrap up the show with one to three takeaways that business owners could put in place in their business as they're financially managing or financially budgeting or financially planning their business. You've thrown out a lot, so it's okay if it's something you've already mentioned but what?

Scott Geller:

are maybe one to three that you'd share with us?

Eric Ellington:

Yeah, so you know numbers don't lie. An incredibly organized and again mine might be a little bit more organized than it needs to be but an organized P&L and balance sheet, something that you can look at on a month-to-month basis, I think is critical. You don't want to make it so that it's very overwhelming. You want to be able to capture whatever you're trying to look for quickly. Sometimes you may need it to make a quick decision right. Again, I look at that stuff year-over-year comparisons and month-to-month comparisons. So have it so that it's organized so that you can easily understand. It Helps you look at the bigger picture and then it helps you articulate those numbers to your leadership team if it's pretty easy. That's my biggest thing. I talk to so many business owners that think they're making money and they just, and they might be right.

Eric Ellington:

They don't know, they don't know, they don't know they don't understand their pnl or their balance sheet, you'll tell me.

Scott Geller:

Any accountant will tell me you know it is it's critical it really is absolutely well, eric the other ask we always have our favorite podcaster book so, to be honest, I'm not a big podcast guy or reader for that matter and just just to be clear this doesn't have to be business. Sometimes we get some good business in here, I know.

Eric Ellington:

I know I have this master's book. It's pictures. That's my favorite book that I have in my house.

Scott Geller:

I would like I'd actually come over.

Eric Ellington:

Yeah, yeah yeah, it's really, it's really good. So, yeah, we implemented EOS about three years ago, so traction is probably one of the five books that I've read cover to cover. I always recommend that Traction may not be right for everybody and the EOS system may not be right for everybody. I was pleasantly surprised, so I would highly encourage people to check that out. And then, who Not how? By Dan Sullivan, so who Not how? Talks about the importance of who you hire and the type of person that they are and the effect that they can have on your organization. Now, that could be a positive effect or a negative effect, and there are things in that book that talk about, you know, again, red flags, those individuals playing like a key role in your business, where you want to go in the decision making process. It was very eye opening for me. Kind of takes. You know people are so concerned about what. Can I afford this person? Well, can you afford not to have them? Right, yeah.

Scott Geller:

That's a really big question yeah.

Eric Ellington:

Can you afford not to have them? So, if you've got big objectives with your business right and you have someone that you feel can really get you there, you need to figure out how to make it happen. You really do so, do not, who not?

Scott Geller:

Well, I like both of those. I've read them both. Both of them are excellent. So, thanks for sharing those. So, as we wrap up here, Eric, in case we have some, I know we have some people in Richmond listeners. How are they get in touch with you or reach out?

Eric Ellington:

Yeah, so email is probably be best. Eric, at glenallengroundscom as of about 48 hours ago and I did this in preparation for this podcast I actually got onto LinkedIn and cleaned my LinkedIn page up, you know, for a couple of reasons.

Eric Ellington:

Right, I wanted people to be able to contact me and build connections that way. But I think, you know, we're getting more into the commercial space on the maintenance side and looking around on LinkedIn, like there's a lot of activity in our industry on the commercial front, so I'm hoping that maybe that opens some more doors as well. But yeah, uh, social media, I'm on all of it. We're we're a heavy, heavy instagram focused group. So direct message if they message me or us, we'll get it you'll get back within 24 hours 24 hours, that's right, there we go, that's right well er?

Scott Geller:

I really enjoyed this and thanks for joining me on the show.

Eric Ellington:

Thank you, Scott. This was a good first one to knock off the list. Hopefully I can do it again. That's right. All right, man.

Scott Geller:

Well, thank you, listeners, and if you like the show, please share it with another business owner or somebody else that could benefit from our conversations and