Photos by Michael Ciaglio
Matt Edmundson may be the third-generation owner of Arbor Valley Nursery, but he is determined to lead the business his own way.
Matt’s father, Dave, had created a culture of micromanagement, one Matt sees often in the nursery industry. It can be effective to a certain level, but when a business grows past a certain size, it becomes debilitating.
“What I saw first-hand in my life was my dad essentially creating a system where he became so integral to the business that his identity merged with it,” Matt says. “He became a slave to his business and it damaged his health and it damaged his marriage, his relationships with his kids, and he ultimately passed away from liver disease when he was 60.”At the time, Matt was 35 with three small kids and one more on the way.
“It was an apocalypse personally and professionally,” he says.
Reinvention of the business was a necessity. Arbor Valley Nursery needed to change because the way it used to do business wasn’t working anymore.
Matt’s grandfather Roy and his father Dave founded Arbor Valley Nursery in 1980. The first and second-generation of Edmundsons saw a need for Colorado-grown trees that would thrive in the challenging climate of the Rocky Mountains. The business started with trees, but branched out into shrub and perennial production. Next, the company evolved into a distribution hub for other growers and out-of-state partners.
Today, Arbor Valley Nursery provides landscape supplies for Colorado, Wyoming and New Mexico.
Over the last 12 years, Arbor Valley has reimagined every aspect of its business. This includes how they grow a higher-quality plant to remaking how they tag, schedule and deliver to help their customers do their jobs more quickly, easily and profitably. The business has grown 400% since the lows of the Great Recession, expanding to six distribution centers in three states and training a talented team of young leaders.
Fixing the mess
Matt says that in its early days, his father’s strategy to grow the business was good service, really good prices and not-so-great quality. Once the Great Recession hit, nurseries were oversupplied and that business model no longer worked.
“B-grade trees weren’t worth anything anymore,” he says.
In 2006, his father leveraged the business and bought another nursery to prepare for additional growth. The Great Recession slowed construction, and demand for plant material tumbled dramatically. These pressures brought Arbor Valley to the brink of failure—and during the crisis, Dave’s health waned. He passed in 2010.“When he died, we were in a tough spot,” Matt says. “I was going into that spring of 2010 turning in a $1 million net operating loss to our bank. Owing my vendors $1 million that I couldn’t pay them that spring and having $1 million of bad debt that I would to this day never collect.”
Matt had financial advisors telling him to declare bankruptcy, but he didn’t want to take that route.
The first step was getting solvent. It took three years, and Matt says it was a painful process, but Arbor Valley paid all of its vendors.
The next goal was establishing a new culture.
“I didn’t want to end up like my dad did,” Matt says.
Matt was doing a lot of soul searching. He asked himself questions like what did he want from this business? Part of the reason he got involved in the first place was that he would own it someday. He was looking for freedom.
“A lot of entrepreneurs get into business thinking it’s going to give them freedom,” he says. “But it didn’t give my dad freedom because he didn’t know how to create freedom within the business.”
So he went on a journey to build a team. Hiring great people to lead quality teams would be the start, and building systems and processes within the business that would allow them to succeed.
It didn’t happen overnight. But the company’s growth has been undeniable. Arbor Valley now has six locations from Cheyenne, Wyoming in the north to Albuquerque in the south.
Some of Arbor Valley’s new locations became part of the business through traditional acquisition. Others were brought into the fold via liquidations where the acquired business was failing. Others were greenfields Arbor Valley invested in to increase its landscape distribution reach.
The strategy was to expand production and distribution centers so their customers would have a simpler time purchasing plants and getting them delivered. Arbor Valley has 27 vehicles handling delivery from its six locations. It also offers pre-tagging and will call at the nursery itself.
Growing your people
One major issue Matt sees in horticulture and has worked to fix in his company is that the industry is great at growing plants but not so great at growing managers.
He doesn’t believe most companies do a great job of marketing themselves to management candidates. Generally, nurserymen and women are humble and don’t promote what they do as cool or interesting. Growers need to create a compelling message that shows how great working in the green industry can be. Arbor Valley created a management training program that infuses new recruits with the company culture and an idea of how they want to establish the business.
Arbor Valley also has been heavily recruiting college students. Matt has found that recent college graduates are typically very open to learning. The tradeoff of hiring someone with more experience is that they may not be as open to change.
“We’ve shifted to the idea that our true competitive advantage will be in creating a leadership engine, which is how we will manufacture and create the workforce that we want in the future,” he says. “We’ve been so dependent on cheap labor for so long that didn’t require a lot of management because you could just give them a bunch of tasks and unlimited hours, and they wanted that. But that’s not the reality.”
In the future, Matt sees horticulturalists being treated more like engineers. Arbor Valley hires engineers that work for their businesses, computer specialists and managers who (gasp) aren’t subject matter experts on plants.
Of course, Arbor Valley still needs people who are plant experts, but Matt sees their role being more like a consultant within the business. Growers who try to scale their business while limiting themselves to only plant experts will have a tough time finding enough people, Matt says. Also, they may miss out on great candidates that could help their business in other ways. Sure, they know plants, but do they know anything about management?
Depending on where your business is in its life-cycle, you may have another advantage to offer: growth opportunities. Arbor Valley has been growing steadily, which Matt says makes it easier for him to find great hires. He has a career path to offer and a culture that focuses on developing its people.
“If your business is a family business where every member of senior management has the same last name, it’s really hard to bring someone with talent into that situation and retain that person,” Matt says. “They see the writing on the wall; they don’t see an opportunity for a future.”
Businesses that can offer a career with growth to candidates will have an advantage in bringing in the necessary talent to be able to succeed in today’s market.
“They need to get out of the mindset like my dad had, that the only benefits my employees need is a paycheck that doesn’t bounce every two weeks and all the overtime they can get,” Matt says. “That’s not reality anymore.”
One reason many businesses resist professional development for their employees is the fear that investing in their training will make them more likely to leave for another job. As much as Matt aims to provide avenues for promotion and advancement, he’s accepted the premise that a lot of his talented employees won’t be with Arbor Valley forever. The value they offer to you is worth a lot, and you may lose them. But he would rather have people work for the company for five years and make a tremendous contribution to each other’s growth and leave for another opportunity than retain a worker that never grows.
You can plan for this, though, by creating a backfill system. Try to always be ready by having a “next man up” list. That way, you know who can fill that same niche for the same period of time. Those employees may develop along different career paths within the business or even if they leave for other opportunities, you won’t be left hanging.
Digging into changes
Arbor Valley built a new facility in 2008 because the one cobbled together for the first 25 years of the business’ existence was very inefficient.
“We didn’t really know what we were going to be when we grew up,” Matt says.
Some of the changes included going to a two-wire system to improve irrigation automation, reducing labor costs. Newly designed roads improved traffic flow so that receiving and shipping could happen at the same time without congestion. The cumulative effect of several small changes can equal transformational change.
You need an engineer’s eye to look at the workflow, how to maximize automation opportunities. Most pre-existing nurseries weren’t built that way. And more research and development focuses on plants than facilities and processes, or labor reduction strategies.
“There’s not a nursery I know of that was designed by an engineer,” Matt says. “If you consider a $15 million manufacturing business, I guarantee you that facility was designed by an engineer.”
He understands it’s a big ask for growers to re-engineer their nurseries to be laid out more efficiently. But with today’s labor reality, it may prove crucial to survival.
Most growers are trying to maximize lean flow on a nursery that was not originally designed to accommodate it.
Matt had the opportunity to design a nursery from scratch for his hybrid production/distribution model. When he looked at the design, he considered how production would work from an automation standpoint. That doesn’t necessarily mean robots spacing plants, but irrigation technology, like sensors that make it possible to not have a worker at the facility 24 hours a day to manage water.Changing the exit strategy
Back before the Great Recession, when Arbor Valley was a smaller business, Matt had a conversation with his father. Matt had dreams of growing the company, and he asked his father why they didn’t have more than one location. Dave said “If I can’t see it, I can’t manage it.”
“That was revealing to me,” Matt says. “What he meant was ‘If I can’t see it, I can’t micromanage it.’ I’ve figured out through associations I’ve been involved in, workshops I’ve attended, the only way to scale a business is by creating a culture of trust where people are empowered to make decisions. We train them, we coach them, we help them understand where they want to go.”
Matt’s journey over the last 12 years has been to figure out how to do things differently, not just from his grandparents and parents but from the industry as a whole. There is a huge demographic shift on the horizon. It’s coming, no way around it. It will shake the industry up, but it represents a massive opportunity. There is a large number of owners who have no succession plan or very little in the way of an exit strategy.
By the time they’re ready to think about retirement, their options are limited. Some are reluctant to reinvest in their business because they know they won’t be the one to see a return on that investment. Either they sell it to employees, which comes with risk, or chop it up for parts. Many owners want the business to continue as a legacy, but they’re set up like Matt’s father — indispensable to the day-to-day operations. Not only does the reluctance to let go limit their ability to grow the business, but it limits the value of the business without them. Why would a buyer want to acquire a business that grinds to a halt the minute the owner is not around? Without a plan to build the business into something an investor can acquire with a minimal amount of risk, they’re sunk.Matt says he sees this a lot in the nursery and greenhouse industry. Owners worry about the future of their business. They may not have children or their children are uninterested. Their employees aren’t able to handle it at their current level. The owner may feel upset that no one has stepped up to lead, but in Matt’s view, the truth is that they’ve enabled this situation. Their reluctance to let go has trapped them. Without them at the core, the business falls apart.
That’s one reason Matt started working as a professional growth coach. He wanted to help other business owners do what he did: Transform their business to make it much more marketable.
From that point, the owner has a choice. First, they could step away but retain ownership of the business. In this scenario, the owner earns what Matt calls “lifestyle money” from the business, but it operates without their active involvement. Choice no. 2, as Matt sees it, is selling it and walking away completely. The owner gets a higher immediate payout. But the third option is where it gets interesting.
Matt’s working to create a management company that could come in and take over the operations of businesses like this. The owners would retain their interest in real estate, for example, so they would still have residual income they could pass to future generations, but not have the same type of business risk.
The first one opens as an incubator project this spring. Arbor Valley has a partner that owns the real estate and the equipment. Arbor Valley hires the employees and operates it as a management company. Their revenue comes as a percentage of sales of every plant that gets sold.
Evolve yourself and your business
Before Dave got into the nursery business, he was a landscaper always hustling for the next job. As a kid, Matt grew up in an environment of struggle, and now as an adult working with landscape contractors through his distribution centers, he tries to help them be successful. He remembers how tough it was, and so he tries to not only grow himself but help others grow and establish a life of abundance.
Matt’s father encouraged his son to invest in himself through personal development. While he was growing up in the business, his father sent him to events like the (now AmericanHort) ANLA Management Clinics. As much as Dave was set in his ways, he had the foresight to know the business would need new ideas in the future.
Later on, Matt joined Vistage, a CEO advisory board group. That helped him get perspective from outside the industry, challenging the framework of his decision-making. Three years ago he joined a men’s group called Wake Up Warrior, which helped further shape his personal outlook and leadership style.
After reinventing his family business, Matt started his Growing Quality Life consulting business to help others like him learn how to transform their business and their lives.
The program is separated into two frameworks, a business operating system and a personal operating system. The business side focuses on just that, business, from a management, communications and planning perspective. The personal side is adapted from what he learned with Wake Up Warrior.
The personal side is crucial, Matt says, because like many business owners, he’d made the business his no. 1 priority to the detriment of other areas of his life.
“I didn’t have an operating system to be elite in business and as a father and a husband and elite in my physical fitness and energy, and with my spiritual connection to God,” he says. “I didn’t know how to do all four of those things at once. Most people don’t. Most people are good at one or two of those things at any given time.”
Once he discovered how to direct his personal power toward what he wants in his life, Matt says he developed into the type of leader (and person) he wants to be. Now he has the tools and the system to help others do the same.
Matt came up with the name “lifetime cash machine” for the system he developed because of the idea that an owner could just check into their business like an ATM, pull out some cash and live the life they want. He’s eager to help fellow green industry business owners make changes to their business and liberate themselves from day-to-day management. Matt expounds upon these issues and more in the Growing Quality Life podcast, available on Apple Podcasts and Spotify. He’s produced 18 episodes, which aim to help listeners improve all aspects of their leadership and turn their business into that “lifetime cash machine.”
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