strategic growth and acquisition in the green industry

with Jonathan Wolfson

On this episode of The Tree Care Business Show, Tree Care Marketing Solutions founder Monica Hemingway sits down for a chat with Jonathan Wolfson of Nature’s Experts to discuss “Strategic Growth and Acquisition.”

Hear about Jonathan’s journey to creating the Nature’s Experts collection of businesses, starting with a few flower shops, then strategically acquiring other businesses in the green industry.

This episode is loaded with information on:
-Strategic growth
-Branding and rebranding
-Creating synergy among businesses

Jonathan also provides helpful tips such as considerations for buying an existing company, managing people, expanding services, and much more!

Listen now and learn the tricks and strategies Jonathan has used to grow and acquire all the businesses under the Nature’s Experts umbrella!

Don't want to watch the episode? Keep scrolling for the transcript!

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On this episode of The Tree Care Business Show, Tree Care Marketing Solutions founder Monica Hemingway sits down for a chat with Jonathan Wolfson of Nature’s Experts to discuss “Strategic Growth and Acquisition.”

Hear about Jonathan’s journey to creating the Nature’s Experts collection of businesses, starting with a few flower shops, then strategically acquiring other businesses in the green industry.

This episode is loaded with information on:
-Strategic growth
-Branding and rebranding
-Creating synergy among businesses

Jonathan also provides helpful tips such as considerations for buying an existing company, managing people, expanding services, and much more!

Listen now and learn the tricks and strategies Jonathan has used to grow and acquire all the businesses under the Nature’s Experts umbrella!

[00:00:00] Monica: When you're looking to grow your tree care business, you've got several options. You can grow organically, which means maybe increasing your service area, expanding into other niches within the tree care industry. It also means you're probably going to have to bring on more employees, more equipment, and definitely have to do more selling to bring in more customers.

Growing organically usually means that you're going to be growing a little more slowly at a more measured pace. The other option is to grow through acquisitions or mergers. That's typically going to be a little bit faster, but there are definitely some pros and cons there, and it's not always as simple as it might look.

The question then is: Which is the right option for you, growing quickly through acquisitions or growing organically? If you do decide to grow through acquisitions, what are the keys to success and what are some of the pitfalls to avoid? Those are the questions that we are diving into on this episode of the Tree Care Business Show.

I'm Monica Hemingway, your host, and I bring you interviews with tree care industry experts to get you the facts that you need to know to grow your tree service business.

Joining me today is Jonathan Wolfson. He is the owner of Sherlock Tree Company in South Florida. At least that's how I met him, but he is much more than that, and I'm going to let him explain to you exactly what it is he does and what his job title is, if there is such a thing.

But we're going to be talking today about growing your business and doing it quickly through acquiring other companies. And if anybody can walk us through that, that would be Jonathan. He is a master at doing this.

So, welcome to the show, Jonathan.

[00:02:00] Jonathan: Thanks, Monica. I appreciate you having me on here, and I really appreciate the relationship we've had for the last couple of years, and it's been a really important role as far Sherlock Tree Company's growth, my growth of understanding marketing, and just how it's related to all of our different companies.

And I really appreciate all the hard work that you've done so far.

[00:02:21] Monica: Well, thank you. It's been fun working with you and your family of companies - because it's not just Sherlock anymore.

So, why don't you tell us about what the larger company is? It's called Nature's Experts.

[00:02:33] Jonathan: So, Sherlock Tree Company is part of a consortium of companies. Nature's Experts is the overarching brand that they're all connected by.

So, Sherlock Tree Company is one of the largest divisions within our company, but we actually own Sherlock Tree Company, Maximum Pest and Fertilization, Threlkel Botanicals, Coastal Gardens, Garden Couture, and Dias Brothers. So we have three landscape companies, a tree company, pest control, and interior plant maintenance and fertilization.

And our group of nature’s experts that work for us, really, we treat it like one big family, but we all are experts in our own respective field. So, no one really acts as a jack of all trades. We all work together as we are all professionals in what we do best. We don't try to act like we're somebody that we're not, and we don't try to be something to the customer that we're not.

When we do tree services, we are tree professionals. When we are given an opportunity to do an installation, we leave that to our professionals at Dias Brothers, Coastal Gardens, or Garden Couture to execute to the level that we know that we can achieve. So, Jeff and I - I own the company with my brother Jeff.

Jeff is 52, I'm 35, and we have an interesting story as far as how we met. We met when I was 21, so about 14 years ago, and we met through Facebook. And when we met through Facebook, we just instantly connected on a really a personal level. And I at the time didn't really - I haven't really started my career yet. So, not having started my career and meeting somebody like my brother, it just really - he captivated me, and trying to understand like what this crazy world is all about and how do you make a name for yourself and a life for yourself.

And at the time he owned seven flower shops. So, you own seven flower shops, and that was the big deal back then. And from seven flower shops at the time I started working for him. I was a flower cutter, I was processing flowers, I was throwing out the trash, I was helping in any way possible just to be a part of what he was about.

And at the end of the summer when I came to be with him, he was like, “Maybe you should just stay and you can start your career now.” So, then I was like, why not? I'm like, I love being down here and I just love my brother so much. And I just instantly connected with him, and I was like, you know, this is the life for me.

And through the years we've been learning more about each other and using our strengths and weaknesses to help grow the companies. So, the seven flower shops went down to one, and through the years we had to figure out new ways of doing business. So, we slowly started increasing our own internal services where it was interior plant maintenance and holiday decorating and lighting.

And then we started to look outside of our company to be like, you know, what else can we do? We were subbing out a lot of tree work and landscaping, so we were looking at both different avenues at the time to figure out, you know, what is going to be our secret sauce? Like what can we do to kind of get out of this situation where you're like beholden to subcontractors. It's not a great situation to be in.

So our solution was looking for a new company, and we actually got the lead for our first tree company, Sherlock Tree Company, because we had a bucket truck that we purchased for holiday decorating and lighting, and we subbed it out to our subcontractor, and he was using it for tree trimming across the street from this tree company, Sherlock Tree Company.

It happened to be someone who was one of the first couple hundred arborists in the state of Florida. So, he was one of the first people, so he had a very good reputation, but he saw our truck and he sent us a letter along with other people in the industry saying, you know, “My name is Jim Sherlock, and I'm looking to sell my business.”

So me and my brother, it was really like the right timing. So we went there and we met with him, and at the time it was the owner, he had one trimmer, he had one driver and one ground person. So it was like four people that worked there. So we ended up making a deal. We bought - it was one bucket truck, two dump trucks, a Bandit 1890, and a whisper chipper, and that's what we bought.

We bought a company. It did $450,000 in sales, and it had one trimmer, one driver, I was another one of the drivers, and a great reputation. And, you know, myself and my brother are really business builders and developers, but we are also happy to get in the field and do whatever is necessary at any point in time.

So, for the first year of the business, I was answering the phone, I was doing the estimates, I was learning how to trim trees, I was driving the truck, I was dumping the truck, I was figuring all of this out of how do you manage a business and try to grow a business and start adding - he didn't have a website at the time, he wasn't doing any marketing at the time, and he really wasn't utilizing his name how he could.

I really remember it clearly that it was very hard lessons. Like I remember the first year we bought the business we almost didn't have any work in December, and feeling that nature of just desperation I don't think is ever going to leave me, that we literally didn't have any other work.

And me and my brother had to figure out how we were going to get more business in the door. I was entirely responsible for the tree division, and my brother was responsible for doing the fresh flowers and interior plants, and I was still ordering flowers while I was running the tree division and figuring it all out. And, you know, one day at a time I was just like, you know, “I want to become a professional.”

So, within the first year or two, I became an arborist, and now, since 2013 to now, I'm an arborist, I'm a CTSP, I'm Tree Risk Assessment qualified, and Sherlock Tree Company is TCIA accredited. So I think I've definitely done my job since 2013 in becoming a professional in the industry.

[00:09:05] Monica: You've certainly taken the company a long way from those early days when you just saw something and it was the right time and there it was.

So, that that first acquisition that was part of growing Nature's Experts - and that was before it was called Nature's Experts - was almost luck. It just was happenstance. You weren't necessarily planning on it being a tree care company?

[00:09:30] Jonathan: Well, we knew we wanted to - we were subbing out services that we knew that were businesses that we needed to be in control of, so our direction was to grow the company. How we've developed it into this different consortium of companies where they're all independent but they're part of a brand is something that we've figured out that works really well on our particular area.

So, you know, the plan of buying Sherlock Tree Company was part of the plan. We wanted to find - you know, the tree care industry is so great. It has such great margins, and there's really no one doing it that well. You know, in our area there's the big utility contractors, but there wasn't any tree care professionals. There were small companies like Jim Sherlock that had a bucket truck and a dump truck, and they had professional owners but they didn't know how to break out of being the owner-operators.

And it was important to me being so young in the industry that I want to figure that out. But it was definitely important that I had to learn it from the very bottom to hauling trash, figuring out how to fix equipment, 5:00 on a Friday you blow out a flat tire and you’ve got to change the tire on the side of the road. You know, all of these were valuable lessons that I really wouldn't want to replace. And I think that actually is the reason why we took Sherlock from $450,000 to over $6 million last year.

And it also helped in just me understanding more about people and the process and the work and us figuring out our direction that we want to take the company in the future. But with advancing and making it a career, it's a lot of pressure to keep growing the company.

[00:11:10] Monica: It is. So, Sherlock was your first acquisition, and then since then there have been several others.

So, what are you looking for? Like, why are you buying specific companies? Are there any indicators that this is the right choice for you? Any warning signs that you would say, “well, maybe not”? How do you -

[00:11:30] Jonathan: Well, one thing was is our, our second company that we purchased actually was another tree care company. It was called Frames Tree Service, and Frames Tree Service was a company that - in our area, Sherlock did only commercial and residential, like single-family homes, and Frames Tree Service did only HOAs. So they only had about 20 or 30 customers, but they were only large HOAs. So they had like one customer that did $120,000, another one that was $50,000 and $60,000 and so on and so forth, and that business, did around $800,000 in sales.

So, we were like, you know, that really is a market that's hard to get into. Being a residential small tree care company and then being able to manage a project that is $60,000 is a big step. You can't do that with four guys and a truck. So, Sherlock had already grown significantly and we were doing around $3 million in sales by the time this opportunity came up to buy Frames Tree Service, so we found it as a strategic plan of getting into the HOA market.

So there really is a lot of strategy in it. It happened to be that the owner of the business was someone that my brother Jeff had known when he was much younger that his dad knew and that Jeff knew. His name was Dennis. Dennis Forgione actually is the owner of Frames Tree Service, and he actually still works for us to this day actually.

So, five-plus years later he still works for us, and he's just - it's really worked out great that we were able to find a role for the previous owner who's an arborist and be able to help him also see the business to what it can be.

Because it actually has been equally as rewarding for him to see how the business has grown to the potential that it has. Because a lot of business owners are stuck and they're like, “How am I going to be like this guy?” or “There's no way I'm going to be able to do that.”

And a lot of times you can really get people together to create amazing things, and that's really what happened with Dennis is that he was the rocket fuel to trusting, like he was like the first real manager that we trusted, and he ran that whole division for a long time until we've continued to grow the company to today.

And, you know, that was a big leap of faith. When you have a company, relinquishing responsibilities is tough, and you can't just do it in a day, you know?

[00:14:03] Monica: For sure. Now, that's something interesting, because you mentioned you bought Sherlock and it kept the Sherlock name. You bought Frames, the name's no longer there.

Why the difference? How did you make that decision as to whether to keep a name of a company you're buying versus not?

[00:14:18] Jonathan: So when we purchased Frames, the invoicing went out to Sherlock Tree Company, but on the logo it said Sherlock-Frames for the invoices that went to that customer. And we felt like the Frames name was good, but it was for a small group of people. So, Frames, the person who owned it before Dennis did, it wasn't as big of a reputation, but they had a great reputation with their customers. Dennis held that reputation. So, since he held the reputation, we were like, for six months or a year it'll be Frames-Sherlock, and then we're going to phase it out and it'll just be Sherlock Tree Company.

Sherlock Tree Company has been around since 1974, so Jim Sherlock was one of the first 200 or 300 people to become arborists in the state. That really means something. Frames Tree Service really didn't. And the fact that we had grown Sherlock to a few million when we bought Frames, it made sense that we didn't need two tree care professional names in the same industry.

Because the tree industry is kind of the same in different fields. There are different reasons I think why you keep the names, which we can go into for some of the other companies that we purchased, but the tree service it is the same, you know, if you're working in a specific area, you know, you don't want to confuse your customer also too.

But the goal is to directly communicate to the customer what you are doing. So in tree service, tree trimming is tree trimming and being capable is capable. So having three names is just confusing.

[00:15:56] Monica: Right. So consolidate into one name. The one that had the stronger reputation, the been around the longest.

[00:16:04] Jonathan: Correct. You can tell since we kept all these names there are no egos here. We just wanted to do a really good job and take care of our people and our customers.

[00:16:12] Monica: Right. So you didn't name it rename it Jonathan's Tree Service or anything like that.

[00:16:17] Jonathan: No. Doesn't quite have the ring to it, though, does it?

[00:16:20] Monica: I don’t know. Could be, but no one would know who you were. Probably early, at least in the early days.

[00:16:27] Jonathan: No, not when I was a little younger. No, I don't think I would've gotten the respect that Sherlock Tree Company has.

[00:16:32] Monica: No. So, you grew Sherlock partially through acquisition and partially through organic growth by your own marketing, sales, all the rest of that. And now you are the largest family-owned independent tree service in South Florida.

[00:16:50] Jonathan: That's right. And possibly, I would say we do some vegetation management for like right-of-ways and everything like that also too. And it's amazing how, you know, as we continue to grow there's different opportunities that come your way based upon your willingness to do anything.

You know, some people kind of make a line and they're like, “I only do these kinds of jobs,” instead of really creatively thinking, you know, “How can I add more value to my customer? They have a problem, I'm a professional, why don't I just figure out a solution for them?”

[00:17:22] Monica: And sometimes that solution is buying what you need to serve your clients.

[00:17:27] Jonathan: Well, one of them that actually got us into doing work for FPL was we did work for the All Aboard Florida Railroad Project, which is the - it's called the Bright Line now, and it's a railroad from Miami all the way to Orlando, and the project started from Miami to West Palm Beach, and we had gotten the contract to do right of way clearing for the railroad.

Never have worked for the railroad, never did right-of-way clearing, but I knew we could do it. You know, it's tree work ultimately at the end of the day, right? And we figured it out. We went through all of the training. The project took over two years to complete. But that situation connected us with Florida Power and Light, which is another one of our customers.

Which, we're not doing mass quantity line clearing work, we're doing specialty removals and right-of-way work, which is great because we're professionals. We're not looking to work that mass market category in the middle where it's extremely competitive and it's high volume with low margins. We want to be paid what we deserve to be paid for the work that we do and charge a fair price for fair work.

[00:18:35] Monica: Okay, and so you took that model and moved into buying more companies. At what point did you decide to buy something else, and why that? Was there a plan? I'm assuming there was.

[00:18:50] Jonathan: So the plan was - after we purchased Sherlock Tree Company, we had grown that. We bought Frames Tree Service, we had grown that. Now we had this other problem. We were still subbing out landscape maintenance and we weren't entirely in control. And what if that guy doesn't want to do the work? Or what if he wants to raise his prices and, you know, what are we going to do? It's not a long-term stable model to be able to be associated with.

So we started looking at different landscaping companies that were for sale, and it happened to be that one of the landscaping companies that was for sale was one that subbed out Sherlock Tree Company to do some of their tree work. So it was the perfect scenario that I knew the account managers, I knew the office managers, I knew the quality of their work, and the business had a great name.

So that business was Dias Brothers, and Dias Brothers had been around since the ‘70s also, it had an unbelievable reputation, it only serviced super high-end residential customers, and it had about 120 accounts. And me and my brother were thinking, you know, we only do some of their tree work. That's 120 new customers we can get just for our tree company. That's amazing.

So we felt the synergy was there for that, and we ended up pursuing - going after that business because it was in an interesting situation. Dias Brothers used to do $6 million in sales, and then when we purchased it, it was doing $2.5 million in sales, and the business was just on the downward trend.

But it still had really good people that worked there. The quality of work was amazing. They still had great management. They just lost two key employees that had taken a lot of the business. So, with that being said, we were able to buy the business at a very reasonable rate, and we still solved our problem.

So their problem wasn't our problem. Our problem was our problem. Our problem was we needed to be in control of the work that we were representing, that we were doing, that we were subbing out. So it solved that problem. So moving forward, it was definitely extremely difficult to get everything going in the right direction.

Everyone was very guarded because these two people had taken so much business from them. They're like, who are these two guys coming in here? What's going to happen? So on and so forth. And, you know, really just by being honest with people and expressing the level of commitment that you're willing to take and work with people -

You know, me and Jeff have different values that we both bring to the company, and everyone sees that we're very aligned together, but we operate very separately, and how we operate separately are really great in bringing out different strengths and weaknesses with other people. Most times they say family businesses don't work. For us, it really wouldn't have worked out as good if it was me by myself and Jeff by himself.

So we've really been able to use each other's strengths and weaknesses where my brother is a unbelievable salesperson and he can sell anything to anybody. Me, I can sell anything to anybody, but I like to sell with knowledge. He likes to sell with salesmanship and he likes to meet people and he likes to network and go to these different events, and it's amazing.

So we really have the full ball of wax as far as when we're trying to, you know, further the business is, we both have two different customers we're going after, so we're never going after the same customer because we're both going in different paths as far as trying to connect with people.

[00:22:44] Monica: Right. Excellent. So, you brought up a couple of things with this Dias issue. So the business itself wasn't in necessarily the best shape because of some of the things that had happened, so you were able to get it for a reasonable price, which brings up the question of how do you determine what is a fair price, or what is the maximum price you're willing to pay for a business?

[00:23:13] Jonathan: So while we've gone through this business buying process, it's really a lot of different components, and I would say when we were first looking at businesses to buy there's one way to look at it, and then as we've acquired more there's multiple benefits that you don't even realize that we're starting to understand.

So when we first look at a business, you know, it's ultimately a multiple of the net profit of the business. The thing is, with every business you buy there's always weird stuff that's going on. There's things that don't make sense and numbers don't add up, so you really have to trust your gut with what you know you're capable of doing and where you can take the business and where the tools of the business are going to give you what you want.

So, for example, at Sherlock Tree Company, we bought it for $450,000, and it came with a bucket truck, two dump trucks, and two chippers. They were all 1999 and 2000 trucks and chippers, so it was no shiny pennies here. So, you know, maybe it was $100,000 of equipment maybe at the time, possibly, but it was a great steppingstone.

But people don't realize when you buy a business you get certain things for depreciation, which is an intangible value. So me and Jeff had our other business that was creating profits, so we were able to take that $100,000 equipment value and use that towards our taxes to help reduce our taxes, actually, for that first initial year.

So, you know, we only bought the business for I think it was $180,000, which we were like, this is a steal. He was saying that he made approximately that much money also too, so we felt like this is a bargain. You know, he just was somebody who was in his seventies. He was wanting to retire, and it was just a great opportunity for us to get it at a very good price.

It didn't work out that way for Dias. At Dias, the business was doing around $2.5 million, and we bought it for $850,000. The business was representing that it made around $250,000. So, unfortunately, when we opened the hood, that's not what we found. It was possibly losing money or breaking even when we looked into it further.

[00:25:44] Monica: So don't you look into it before you buy it? Isn't that part of the due diligence getting the, the P&L, the balance sheet, all of that stuff?

[00:25:53] Jonathan: So if every business we looked at, we looked at the P&L and the balance sheet, I don't think we would've purchased any of the businesses because it's a lot of something's wrong. But the opportunity is there and you have to know what the industry can yield.

So, you know, at Dias they had 120 customers. They had 50 people they were able to take on the management of all of the work that we had without increasing any of the labor. But the owners were very rigid with what they wanted for the business, so it was up to Jeff and I to be like, is this name, is this opportunity worth it? Can it really be worth the purchase price that we're going to pay? You know what I mean?

And through looking at it, you know, it was a four-time multiple or more. But a lot of times you can look at it at a way of what's the equipment worth? So they had like 10 or 12 trucks, 10 or 12 trailers and loaders and skid steers and all of that stuff, so it probably made up around $250,000 or $300,000 of equipment. So we really bought the business itself maybe for $500,000.

So, you know, the thing is what are your options? You know, your options are you can start a business. Your options are you can keep looking for a business. A lot of times there aren't that many businesses that you actually would be interested in purchasing is the problem.

So when you find something that actually fits your build, you have to see if you're really willing to take the risk to actually make that work for you, because just because it worked for somebody else doesn't mean it's going to work for you. It's just supposed to be a track record of what you're buying and give you a little bit of an insight of what it's going to do the next year.

But you don't know what the next year is going to yield. Could be a pandemic, it could be a recession, it could be they had the customers all for 10 years and the customers are now sick of them, hey've had them for too long. You know, sometimes that happens as well. And with this particular situation, it fixed it. It fixed the solution.

So since it fixed the solution that we had, we were like, you know what? It's the right business. It's the right people. We had looked at other businesses before that. Like, this is definitely the one. We need to take the risk. And we did, and it definitely was really painful in the beginning.

Not getting information to where there was accounts that were losing money, there were accounts that were breaking even, there were employees that were ready to leave. There was management that was apprehensive if they should even stay or not. The whole thing was about to implode the time that we bought it, actually.

So we're lucky that we did because when we did, we really restored all of that to its greater glory. So where we bought it, it was doing $2.5 million, and then last year we did $6 million at Dias, and we've only owned it for two and a half to three years now. So in a pretty short time, we've completely turned it around.

And the irony is that I would say 75 percent of the people that work there are still the people that worked there when we bought the company.

[00:29:01] Monica: All right. So that's making a big difference.

So you're not just basing it on the numbers, the financials, when you're making these decisions as to which companies you're going to buy. You're looking more long-term, broader, strategic fit, all the intangibles that come with it.

[00:29:18] Jonathan: So it's about knowing the numbers. Once you have the numbers, you can do with it what you want. So you have to be smart enough to be able to digest the P&L, do some accounting to figure out where the problems are, search for the problems, find the solutions.

You know, we personally - when we do this, we use a business broker, and when we find businesses we use them as a consultant. When they find them for us, they're obviously still our consultant. But we utilize them as a tool to help educate us more in the industry, educate us more about the customer.

We have a CPA over an accountant, and our CPA goes through all the financials, they go through and they highlight all the different things that don't make sense in the business that we need to find solutions for and that just because you find problems doesn't mean that you don't buy the business. It means that you need to understand the risk in buying the business.

And I think people don't understand the two things can happen at the same time. The numbers can be less than what they represent. It can be not as profitable and you can be paying more for the business, and it still can be a good business to buy because once you own that business, the opportunity is yours to take and to do whatever you want with.

[00:30:32] Monica: And you have a good track record of turning companies around, so that makes a difference as well.

[00:30:38] Jonathan: It's a little, it's a little easier now. I have to say it's a little bit easier. We have a little bit of a track record now that I think the buy-in period is a little bit shorter where you don't know if you can trust people.

And now we have 225 or more employees. We're going to do $25 million this year. And, you know, literally people meet us and they make their opinions, but you can gladly call someone, one of our other experts, and ask them what they think and what they think of Jeff and I and what we've done. And how long everyone has stayed and worked for us is representative to the kind of business that we run.

Also, too, most people are worried about themselves, and we're worried about taking care of the business, and when the business takes care of everybody, everybody wins. You know, we're not out just for ourselves. We're out for the company to do well.

And when the company doing well, people need to make more money. And it's not a plateau, it's not a formula where you get to keep all of it and you keep everybody down. You have to sacrifice in the beginning to pay people what they're worth, not what you want to pay them.

[00:31:52] Monica: Right. You pay them what you want to pay them, you'll probably lose them.

[00:31:58] Jonathan: That's right. And the thing is, I don't think we've ever - we've never made that mistake, because for the first five years of the company me and Jeff didn't really take any money at all out of the business.

We kept rolling it into the business to buy different companies, and by doing so the intention was on growing the business. And it was great to show that we were netting a lot of money, but we were spending a lot of it on buying new trucks, on hiring new management on risking for the next year.

[00:32:30] Monica: So that's a question I'm sure a lot of people have is how do you pay for buying a new company?

So you're obviously funding it out of your existing businesses. Do you have to look elsewhere as well for external funding or anything like that?

[00:32:44] Jonathan: So the first business that we bought, Sherlock Tree Company, we paid for in cash because the purchase price was relatively lower. We could have gotten financing for it, but it wasn't necessary.

The second business, Frames Tree Service, we didn't need actually to pay for the business, and I told my brother that I didn't want us to take any money out of the business as we were building the business. We just kept all of the money in the business, and we had a very good year.

And the year was so good that I said to my brother, “I would rather not make any money this year and for us to buy this business.” Because at the end of the day, you're risking it on yourself, right? And I'll risk anything on myself. So we literally took all of the profits of one of the years and paid for one of the businesses.

We took no profits, and this happened - it was multiple years to get to have that much money in the bank. So it wasn't like one great year and we're like, oh, what's the big deal? This was multiple years of not making any money. And we did the same thing with the pest control company that we had.

We bought a pest control company for $400,000, and we negotiated to put $200,000 down, and then the next year we're going to put another $200,000 down. And you know where that money came from? Sherlock Tree Company paid for it on both occasions.

And, you know, still leveraging all of our hard work into smart new acquisition that we knew the industries weren't utilized to its fullest potential. And even ones that are, they're not. The markets are way bigger than even people realize.

[00:34:21] Monica: Right. So I know you've got the Maximum Pest now. You also have Coastal Gardens on Palm Beach Island, and another one out there that you've just acquired.

[00:34:32] Jonathan: So after we purchased Dias Brothers we looked at what did we want our strategy to be?

You know, the goal originally was we want our tree company to be in all of the major cities in Florida because we feel like the markets are so large in each one that we started pursuing and looking at that. And we're like, well there was one in Orlando, there was another one in Tampa we looked at, and they were smaller businesses, and we're like, is that really the right direction? Are we ready to move out of our local area?

So ironically, you know, we're talking about this in our weekly meetings to all of our managers, what we're trying to do, what we're wanting to look for, so on and so forth. And one of our managers, his name was Brian Moore, he was at a nursery, and he heard that there was a landscaping company called Coastal Gardens that was for sale.

It was being sold with 2.5 acres of land, and it had about 50 people and did about $3 million in sales. So we're like, this seems great. It's not very far. It's a few miles from another office, and it's a market in South Florida you can't really get into. So Palm Beach Island is an exclusive island where a lot of the millionaire, billionaire people of the world live.

So, they had about 50 people that work there and about 50 customers, and going through it we were like, this is a way to get into a market similar to Frames Tree Service that we couldn't normally get into. And we really wanted to buy a tree company. That was really what we were looking for.

We're like, we've got it down. We have all the professionals. We have the arborists, you know, Sherlock Tree Company. We have six licensed arborists, we're TCIA accredited, we're certified pest control operators, and everyone's safety trained. We got it dialed in pretty good. And then this opportunity came up.

We do a couple customers on the island for tree trimming. They are really large tree customers, and we do them multiple times a year. So we figured, you know, this is another situation kind of like Dias. Then maybe we can move in with the landscaping company and then work our tree company to be a prestigious tree company on the island.

So we ended up making a deal for this business. We bought it at three times its net, which is pretty standard, and we bought the land also too, and by doing so we've actually doubled that business in a year and a half. And I'm really proud to say that it was definitely the right decision to buy the company because it added some excitement within our company also too.

So, as difficult as it was to get everyone to kind of work together, it was also really exciting for everyone to see new opportunities and new ways of looking at things where the business isn't getting stale, the business is moving forward. Everyone is a part of it.

You know, we have Nature's Experts meetings where we all get together every quarter, we have other meetings where the managers just get together, and it is a big family and we're all experts. So it's exciting that we all do different things every day because it just creates more variety and ideas and situations that come up where you can utilize everyone's talents.

So that's Coastal Gardens, and then three months ago we just bought another company on Palm Beach Island called Garden Couture, and now we probably have the largest landscaping company on Palm Beach Island. So, as glamorous as that might sound, it's actually really difficult because there are bigger companies that are known more than us that we have to fight through the street cred that we don't quite have yet with these two companies working together.

But to me it's exciting. Get out of the way because we're coming.

[00:38:32] Monica: Fair warning.

[00:38:33] Jonathan: That's right.

[00:38:34] Monica: So, you've mentioned several times sort of the things that you do to when you acquire a company. There is going to be understandably concerns, maybe resistance on the part of the people who were there.

And you've mentioned several things that you do or ways you look at it to sort of bring them into the family and make them feel like they're part of something larger and better and that there's a future. Can you talk a little bit more about that? Because I know the people aspect of an acquisition is often the most difficult.

[00:39:07] Jonathan: So it's actually the most nerve-wracking, but it's the easiest because the thing is that everyone really knows how to connect with people. And you know how you do that?

You literally just start by saying hi. And I think people get intimidated by the not knowing how to handle people because you're not supposed to know - I don't know you, you're not supposed to know me.

I would like to get to know you. And if you just have that mentality that you respect the person that you're sitting across and you want to get to know them and how you can both mutually benefit each other, it's really an easy conversation.

But you do have to say what you mean and mean what you say.

[00:39:46] Monica: And followed through on it, I guess. Yeah.

[00:39:49] Jonathan: And you know, when we bought Dias, that was our first acquisition with multiple management. There was nothing so glamorous. We had told them at a small restaurant.

We met them there with the old owners and we told everybody, and we sat with them and we just told them, “Listen, we are so excited for this opportunity to work with you guys. We have done this, this, this, and we are really looking to - excited to have you guys join our team because we are really want to make a difference in this landscaping. No pun intended. And we want to really kind of carve out our own name, and we want to bring this company back to where it used to be.”

And you know, it's nothing so crazy. It's just getting to know people, and we got to know them, and then the next morning, guess what? We were there ready to get to work. And you don't get to work by putting off stuff on people. You start it by taking on responsibilities. If you look for problems to solve and you solve them, you get buy-in.

You don't get buy-in from riding the gravy train and just sitting back and watching everyone do their job. You get it by getting to work. And it's typically really easy when you buy a business to see what needs to happen. Trucks are not serviced, customers are not taken care of, the facilities in disarray, the uniforms are bad, etc.

Find things that are obvious problems. Start creating solutions. Start creating value.

[00:41:19] Monica: One of the things you just mentioned, the uniforms are in disarray. So one of the things I noticed is that with each of the companies you've acquired, you rebranded them in a way so there's a consistent look and feel across all of these different brands, but they're still separate companies.

Why did you choose to do that?

[00:41:41] Jonathan: So, you know, me and my brother are brothers, right? We're family, and we want this to be a family-run kind of business. But we also understand the uniqueness of people in your family.

And Sherlock Tree Company, when we bought it, the logo was old. It was literally a logo from like, whenever, so it's completely old and tired. So we're like, we definitely need to update it and really bring it to where it's up to the standards of now, for a company that's been around since the ‘70s that's supposed to be one of the most well-known arborists in the area.

It doesn't fit what it should be. How the trucks looked didn't fit what it should be. The logo didn't fit what it should be. It wasn't advancing with the industry. So we ended up coming up with the idea of branding them all the same but different by wanting to figure out how to elevate the existing brands and how to – like at Dias and Sherlock, we were like, you don't want to tell the customer, but you want to tell the customer.

So, for example, at Dias they were able to say to the homeowner, “Monica, our tree division is going to be taking care of your trees this year.” And when they see the trucks pull up and it's the same logo-ish – it says Sherlock Tree Company, but it looks the same - and you see the maintenance truck there and it looks the same, you get more of a buy-in and acceptance that it really is a family and it's not like a line of whatever that you're being sold that's not true.

And that was our initial reasoning behind it is we wanted to figure out how people can look at our company and when they see all the trucks on the road they start thinking in their head that “I see Sherlock” or that “I see Dias.” Whatever one resonates in their head, that's what they saw.

So if they know Dias but they see a similar logo and it's a tree company, they think, “Oh, Dias does tree work?” And then vice versa. With Sherlock and Dias, it was the same kind of mentality, and it really just grew from there to kind of being like, it really makes sense. You know, Dias has a certain group of customers, Sherlock has a group of customers, they had their expertise, and their respective fields were different. Their customers were different.

And you know, it's a way of marketing also too. You know, with marketing it's difficult. Actually, if you have one name it's actually more difficult. So if you're one name and it's Nature's Experts, and Nature's Experts has now five different offices, it's difficult to market actually. You would know that from a marketing standpoint.

[00:44:18] Monica: It is.

And it's also people worry that you're, as you said earlier, a jack of all trades. When you've got that consistency or continuity across the different divisions - however you want to refer to it - of your company, each one is positioned as an expert in their niche within the larger green industry, there's more credibility and it is easier to market.

[00:44:43] Jonathan: Yeah. Who knows what will happen in the future, but I think that as far as how we've done it now and creating the overarching Nature's Experts brand, I think that it ties it together as far as our management team. So on the trucks it says Sherlock Tree Company, A Trusted Florida Organization, Nature's Experts.

So, you know what, that's where we're at right now. And you know, our Nature's Experts is our whole management team. We are the experts of nature and nature's experts. So it really actually worked out in twofold to where it's been like a management tool to connect us and bond us all together as a team, but it also has made sense to a lot of customers where you can direct them to They can educate themselves about the company and they can see how it all works together.

And we're not just a bunch of random companies; we're a bunch of companies that are vertically integrated within the market that Sherlock can sub out work to Dias to do landscape installations, Coastal can call Sherlock to do specialty removals. Our pest control division does work for all of our companies, because I think everyone would know in the tree care company you get a lot of leads that you can't convert on.

So I think that somebody in the industry, depending on their tree care experience and the customers that they're getting, if you're getting a lot of pest control type leads, you should figure out how to convert those leads into dollars. And if you're getting a lot of landscaping leads, you should figure out how to connect those into dollars. You know, it doesn't mean you get one means that you do it, but if you're starting to get something that has traction, figure out how you can start doing it yourself.

You know, I got my certified pest control operator’s license, and then same thing, from becoming an arborist and tree risk assessment qualified and going through tree appraisals and educating myself on landscape installation processes by each city. You know, these are all different skills.

[00:46:41] Monica: Right. Truly an expert. So if somebody is thinking, “Okay, I want to give this a try. This makes a lot of sense,” what advice would you give them? How would they start thinking about and pursuing an acquisition?

[00:46:57] Jonathan: I would say the best thing to do is to find a business broker. And it doesn't mean you have to use one, but you should use somebody who has more knowledge about buying a business than yourself.

And you might know the exact target business that you want to buy, but you shouldn't do it alone given whatever fee that they get. It doesn't really matter if you're buying a business. You're buying it for the long term, you're not buying it for the short term, so there's no reason for anyone to think, “I can do it myself. I can find a business. I can call people. I can negotiate a deal.”

You can. You might one day. But why not surround yourself with people that you trust and to find - like we've found a business broker that we really trust, and there's been different ways that he's really earned his money, and it's been by finding business. It's by being a consultant on different businesses.

And, you know, when you have somebody like this and you have a relationship with, you can go find businesses yourself and ask them questions and then bring them in on the deal. It's not like you have to just sit back and wait for them to find the right business at the right price. You can be an active role and an active participant in trying to figure out your solution or your problem.

[00:48:08] Monica: Where do you find a business broker?

[00:48:10] Jonathan: So we use Transworld Business Advisors, and they actually have a lot of offices in a lot of different states.

So I would literally just search your city and look for business brokers, and you'll find somebody. In South Florida, there's ones that specialize exclusively in landscaping. There's ones that - like Transworld, they sell all different types of businesses, and it's amazing. You'll understand that a lot of people that sell businesses, there's a lot of similarities in other businesses not in our industry, but just in business in general, that you can really understand and see how great of a market that we have, and the landscape and tree field is a great business to be in.

[00:48:50] Monica: Okay, so you've got a broker. You're looking at a business. What should somebody think about next?

[00:48:56] Jonathan: The next thing I would do is you need to understand financials. And it doesn't mean that you need to understand them. It means that you need to have someone who can help you understand them. So it's better if you know what you're looking for, but if you don't, you need to get someone who can speak your language to help you understand the financials so you understand what you're buying, and what kind of problems that you're going to have, and what the upsides are.

There are upsides that you might not understand that are on the table. You know, there's depreciation. There's the synergy of the two companies. There's insurance benefit that you can maybe save on different insurance policies. There's management savings.

You know, if your business is undermanaged but you're making a lot of money, and this business is a lot of management but it makes a little bit of money, you can kind of think, “Well, you know, I'm working too hard managing my business. They actually have a manager that can help take the load off of my shoulders and I can go out and sell more, creating more revenue for the business.” You have to pay for that, you know?

[00:49:58] Monica: Right. Okay, so they'll help you think a little more broadly than just the hard numbers.

[00:50:06] Jonathan: There's opportunity that you don't realize that can be captured in understanding the business owner.

So some business owners are very niche where they only look for a certain type of customer, and you might want to change what that company is specifically doing. You know, some companies only want to do commercial. Some companies want to do HOA. Some companies only want to do residential, and that might be great for them, but there's a whole other market out there that they're not tapping into. Or they might only operate in a certain city, but they don't operate in the other city right next to it.

So you need to realize the untapped potential too, of their existing business model.

[00:50:48] Monica: One of the things one of these words that's always thrown around is due diligence. “You've got to do your due diligence.”

In simple English, what does that mean?

[00:50:56] Jonathan: Due diligence is understanding what you're buying, and to understand what you're buying you do need to have all of the facts, and there's a lot of facts to understand. There's the gross that the business makes and understanding and making sure that it's true and accurate, which an accountant or a CPA can verify through the deposits.

There's also understanding industry standards. So different business sections can have different profit margins. So a lot of times what we'll do is the very first thing you look at is business industry labor and where that falls to see if there's any red flags from there because that's kind of where you can do a quick check on a business and be like, well, how much are they spending in labor?

So just by knowing that labor should be less than 50% or whatever margin that you're looking for on your labor, you can use your own business as a model and say, well, my business only has a blank percent labor, so why do they have this percent labor? And you can ask those questions and get answers.

And it might be that they have more management than you. It might be that they're actually just underpricing jobs. So if they don't have a good explanation, it means that they're underpricing jobs. Do you feel like the opportunity of - if it's a tree care customer, well, you can do all the jobs this year and then next year you can raise them all.

So which ones are you going to raise? How many can you raise? If you raise all of them, how many would leave? Maybe 20 percent. But if you raise all of them by 20 percent, you'd be making a lot more, and you'd have a lot less aggravation, possibly. So it's really about analyzing what you know, what you're buying, so you can formulate your strategy.

[00:52:39] Monica: Okay. So a lot of this is where a business broker comes in handy, helping you understand that, and some of it's going to be I guess you learn as you go.

So you've, you've done a whole bunch of acquisitions at this point. What do you think is the major thing to watch out for? Any pitfalls people should be aware of?

[00:53:04] Jonathan: I would say the biggest thing to watch out for is making sure that you are ready for it. So it's kind of a catchy thing to understand because you're really never ready when you purchase a business, but you need to be ready for anything that's going to come in front of you. That's really the biggest pitfall and thing to be mindful of.

Because as great as the numbers could be - because we bought businesses that have really good numbers and we bought business that had really bad numbers - and the thing is that they're both the same. One did not make me sleep better at nighttime than the other did because they're both equally as difficult. And it's really about making sure that you are in the right mental space to really be able to handle the ups and the downs because each business, good or bad, is going to have ups and downs.

And with the ups and downs, you need to be able to make sure you're making the right business decisions on a daily basis. Because the business isn't created by five decisions, it's created by 500 decisions for 5,000 days in a row. So it's really - I think that's the biggest thing that you really need to be worried about because there is no magic key to buying a business. There's no magic thing to look out for in buying a business.

It's making sure that it has what you're specifically looking for, what you're potentially lacking if you're buying a business out of your area. You have to have strong management. If you're buying a business in your area, you don't have to have strong management because you can help manage it.

You know, there's different key components, but you have to understand the difficulties in doing all of them. So managing out of your area with the strong management crew that you haven't done before, that's a new problem. So just because they're great and they make a lot of money doesn't mean they're going to make you a lot of money.

[00:54:53] Monica: All right. So a lot of stuff to think about. So - I don't know if we can ask you this - what's next? Do you have some other things in mind? Where is Nature's Experts going next?

[00:55:07] Jonathan: So, Nature’s Experts now - so we have five offices. We have two 2 and a half acres properties, another half-acre property, and a 12,000 square foot warehouse.

And for all of our different companies we're in, we have five different locations I think for our local area. We want to keep growing. We've grown all of our businesses organically, significantly, and it's really exciting to see that growth potential. But I think that me and Jeff have figured what we want to do with our businesses, and we've taken definitely a lot of calculated risks to get here, but we know that we want to continue growing through acquisition.

So, for us, I think we bought a business in January. We're probably not going to buy anything else this year. We're going to keep working on our businesses on a daily basis and happy to, and we want to buy another business. Every other year is what our plan is now, and we want to expand into Naples and Tampa and Orlando and Jacksonville, and we want to eventually have - tree companies we feel like is the best way in, in all of those different areas.

We feel like that type of business is - you know, a lot of people are not doing it to the level that it can be done to in almost every single market. There's always people that are doing a really good job, but there's way more business that's out there than what that one really good company in that area can do. So you might know a really great tree company in the city that's near you, but trust me, they don't have all the business.

We don't have all the business. There's still plenty out there. 20 times, 30 times more business than Sherlock even does in South Florida. It's probably even more than that. So there's still opportunity here we're just waiting to find, but now we're starting to organically pick up one reoccurring customer a year, one at a time.

And it's going to be a slower process. But it's also too, you know, with tree companies it is a reoccurring service. It's once a year, typically. So we're lucky that we're in the field of reoccurring business and transactions. So we want to look out for other areas that we can get into where we feel like buying a tree company will be the stepping stone to get in there.

And then we'll be utilizing the Nature's Experts brand to help introducing other companies that can help more customers to feed other ways of giving each other business back and forth.

So it could possibly be buying a tree company and then buying a landscaping company and having them work together to have similar management, or have some overlapping responsibilities of the office to help reduce costs, but to be able to have two streams of customers coming in the door that we have more opportunities to help them with more.

[00:57:54] Monica: Okay. So slowly taking over all of Florida, by the sounds of it.

[00:57:58] Jonathan: I'm pretty, I'm pretty confident, too.

[00:58:01] Monica: So, thank you so much, Jonathan. This has been really interesting and I think informative for a lot of people.

I think you've probably gotten a bunch of people thinking about, Hmm, how can I start following the Nature’s Experts model of growth? So I wish you all the best.

[00:58:20] Jonathan: I think there's something there, too. Like at one point we looked into doing like a franchise or whatever, and we might end up doing something maybe with the franchise where we figure out with people where we actually help business owners versus people looking to buy the business, you know what I mean?

[00:58:41] Monica: Yeah. That would be interesting.

[00:58:44] Jonathan: So a model of somebody who already has business that we helped them grow their business.

[00:58:48] Monica: Well, you've proved you can do it so, people can learn a lot from that.

[00:58:52] Jonathan: It's a different model, though, because if you connect with somebody who is doing a million dollars a year and you can help them grow their business to do a lot more - starting from zero in the tree industry is pretty difficult.

[00:59:03] Monica: Definitely easier to come in with something already set up for you.

[00:59:08] Jonathan: Well, we only started with $450,000 in sales and we're doing $6 million, so it's not impossible.

[00:59:13] Monica: No, that's awesome. All right, well, thank you.

[00:59:18] Jonathan: Monica, you're welcome.

[00:59:19] Monica: This has been interesting. I mean, I had a really good idea of what you'd been doing, but not quite at this level of detail.

Okay. So any final words before we wrap up?

[00:59:32] Jonathan: The only final words I have is that I really - anybody who's ever interested in talking about growing their company or acquiring companies, I really am interested to learn more myself. So even though we've been through a lot of different experiences in buying companies and we might seem to know a lot, there's still a lot to learn.

And I definitely would extend to anybody who's interested that they can call me or email me to talk about it, because I'm looking to learn more about the industry and the opportunities and ways of doing things to keep making sure that we are ahead of everyone else in our industry.

And I don't think that we're specifically more ahead of anybody else. I think that we've learned how to keep people, I think that we've learned how to manage people, and I think we've learned how to take care of our customers, but we certainly haven't figured out how to do it all. We've just figured out a couple small things that really help round out our business.

So I think that if anyone's ever interested, they can call me on my cell phone, (561) 245-0933, or you can email me at

[01:00:36] Monica: Awesome. And I am sure some of our listeners are going to be reaching out to you. I hope they do.

[01:00:43] Jonathan: I look forward to it.

Thanks everyone for joining us on this episode of the Tree Care Business Show, where we learned about how Jonathan Wolfson has grown his business, and got some of his advice for how others with tree care businesses could do the same. You can watch more episodes at, and subscribe to our YouTube channel to watch more content created just for tree care business owners. Thanks again for joining us, and we look forward to seeing you again next time.

In This Episode

Here's what you'll find in this episode:

0:00 - Introduction

2:33 - Overview & history of Nature’s Experts brand

11:30 - The strategy behind acquiring companies

16:50 - “How can I add more value to my customer?”

18:50 - Acquiring the subcontractor

22:44 - How much is a business worth?

32:30 - How do you afford to buy a new company?

34:32 - Acquisition growth strategy

38:34 - Managing company culture through transition

41:19 - Branding & rebranding

46:41 - Advice for getting started with acquisition

50:48 - Due diligence

54:53 - What’s next for Nature’s Experts?

59:32 - Getting in touch with Jonathan Wolfson


Sherlock tree company

Jonathan Wolfson
697 SW 9th Terrace
Pompano Beach, FL 33069
Phone: 954-788-4000
Mobile: 561-245-0933
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