Not all businesses start with a fully formed plan. Sometimes they begin out of necessity or on a whim – or both. Three Men & A Shovel Landscaping in Logan, UT, falls into that category. In the late 1990s, Seth Bowen was working for a construction company while attending Utah State University and met two employees who were doing the same. "We were a bunch of students, but we were running crews, doing framing, roofing and landscaping," Bowen recalls. "The company was kind of a disaster and it eventually dissolved. We were left wondering ‘What are we going to do now?’"

The trio decided to work together, offering services like installing sprinkler systems and landscape plantings. That was about the extent of the business planning and strategy that went into the creation of Three Men & A Shovel, which was legally formed in 2001. "The truth is we were morons. We had no business starting a business," Bowen jokes.

While the company’s beginnings weren’t guided by detailed processes and procedures (to say nothing of longterm objectives), Bowen says that there was a commitment to doing right by customers from day one: "We did what we said we would do. And when we didn’t, we said we were sorry and we fixed it. People want to overcomplicate business; but in my personal experience, these are the keys."

From 3 to 1

Early on in the business, Bowen’s partners moved on to pursue different professions in other parts of the country; but the three remain close friends. Bowen decided to keep the company (and the name) as a solo operation, and he soon saw the wisdom in taking a more formalized approach to operating the business.

Somewhat ironically it was snow work, which Three Men & A Shovel didn’t even offer until around 2005, that has helped to transform the company’s overall approach to business.

Shifting focus

From the get-go, Three Men & A Shovel eschewed traditional advertising and marketing (it doesn’t even have a website), relying instead on its reputation and word of mouth to grow.

"We started with landscape construction, and then added maintenance. When you do good work for people, they tend to give you more work, so snow kind of just came," Bowen says. While there was demand, he was reticent to fully commit. "We hated it. But we did it because our clients wanted us to – they liked the service experience we provided."

In 2008, Bowen realized that "we needed to make snow something we loved, or we needed to let it go." He attended his first SIMA Snow & Ice Symposium to get a better understanding of the industry. Listening to speakers from other companies talk about their approach to snow and ice, Bowen says he realized that they just hadn’t been taking snow services seriously enough.

"We weren’t putting enough energy and attention into it. It was just a part of our business that we did because we had to – and that’s not a reason to do business."

Bowen left the show inspired. "We decided that snow was a viable potential part of our business and we were going to find out how to make it a truly serious part of our business. So we started to plan and strategize and scheme about how to make snow work for us."

Bringing flat rates to the market

Making snow work largely meant making it profitable. In part, that meant finding a new pricing model. Logan is an area with about 125,000 residents, somewhat isolated by mountain ranges. "It’s a pretty small, very conservative market," he says. "Our market had never heard of flat rate (or seasonal) pricing, which we kept hearing others in the industry and in Snow Business talk about. We decided that we were going to start pushing that."

Bowen says it has taken a lot of effort and education but today 98% of the company’s snow revenue comes from flat rate agreements.

"I think that is an anomaly, even compared to our peers who are in much larger markets doing much more revenue than we are; when they hear that we’ve gotten that heavily into the flat rate, they almost balk at it," says Bowen. "But we tested the flat rate model for eight years with a handful of clients before we really rolled it out across the board."

Bowen says he relied on his degree in finance and accounting to analyze the ramifications for his company and his clients of switching to flat rate pricing: "I’ve never met a spreadsheet I didn’t like – so we took a lot of data in those early years to help understand whether this pricing model was or wasn’t profitable."

He found that if the flat rate price was bid correctly, even in heavy snow years, the company did OK. "We figured out that, on average, we’d win one year, the client would win one year, and it would be a wash another year," he explains. "We actually appreciate the years where they win because the clients need to feel like they win sometimes – not like they’re always on the losing end."

To help balance the risk and reward, Three Men & A Shovel signs only three-year contracts. Everything is included except for snow hauling/relocation. With prices locked in, the steep labor, fuel, equipment and material cost increases in the last couple of years have eaten into profits on existing contracts, but Bowen says he has not gone back to ask clients for additional money; his hope is that honoring the contracts as negotiated will earn his company goodwill when it’s time to negotiate new agreements.

Selling service

In addition to changing its pricing model, Three Men & A Shovel found success by searching out specific clients. "We know our numbers and what the right price is for us," says Bowen. "If it’s not the right price for the client, that’s fine." He says his company’s prices are "on the higher end of the spectrum" because it is looking to only do quality work for clients that demand it. "We’re a service company that provides snow and ice management services. We’re not a snow and ice contractor, we’re a service provider," he clarifies. "We focus on crafting a world-class customer experience."

The right fit for the company is a client with world-class service expectations. "We don’t do residential; we don’t do any HOAs; and we really try to limit the amount of retail we take on," Bowen says. "Our laser focus as we add new clients is industrial manufacturing." In particular, he seeks sites with at least 15 acres of asphalt. "There’s only so much of that in our area, but we are now servicing down into the Salt Lake markets (about 1.5 hours away), which gives us access to a lot more of the right clients."

Industrial manufacturing often means working with multinational corporations that have teams of people who are entirely focused on safety. "They have a high standard, they are focused on safety, their bonuses are based on their safety records. Those people speak our language," says Bowen. This market segment also offers predictability: typically, employees are the only ones on site and foot traffic happens only during shift changes, as opposed to retail, where thousands of customers might be walking in parking lots at any given time. This helps to lower liability for Bowen’s company.

Sub success

Three Men & A Shovel largely utilizes a subcontractor model for snow and ice services (traditionally it has selfperformed most of its summer landscaping work, but Bowen is looking to expand the use of subcontractors during the green season as well). "One of our core values is doing more with less," he says. "It’s really worked for us. The SIMA peer group that I’m a part of includes one company that does $20 million annually in snow work and it’s 95% self-performed. And we’re about 95% subcontractor. So there are different ways of doing things."

Bowen says a variety of efficiency and economic factors went into the decision to use subs, including the decreased capital outlays needed for equipment. "When it comes to equipment that only gets used four months a year, it’s hard to monetize that," he states.

But perhaps the main reason has to do with access to labor. Logan boasts one of the lowest unemployment rates in the nation, so the labor supply is tight. Plus, Bowen says that providing top level snow and ice work creates a challenging work environment: "Because we’re so hyper-focused on client experience, that naturally makes it difficult to be hyper-focused on employee experiences."

Bowen has found it better to hire qualified subs and manage them to the client’s expectation levels. Three Men & A Shovel’s own crews typically handle the sidewalks/walkways, which require an even higher degree of attention to detail; this allows his employees to monitor work being done by subs. Internally, the company recently created a "quick reaction force," especially for those super demanding clients "who really want sort of a biodome effect, with no snow on the ground," Bowen says. These teams have focused on getting activation times down from one hour to 30 minutes at any of the 30 or so sites the company services.

"And we do a lot of pre-season site engineering to make sure that we know the priority areas and then we have a game plan before we get a 12-inch storm," says Bowen. "Using the procurement timelines and all the other resources SIMA has put out over the years has really helped us to try to cycle up the different things that happen in the lifecycle of a contract. We’re doing some of that work in June and July and not in November, when we’ve got snow on the doorstep."

Taking a step back

While snow was once an afterthought in Three Men & A Shovel’s operations, today it makes up the largest part of the company’s revenue stream. That growth has allowed Bowen to step back and focus on process and laying the groundwork for the future; spending more time with his family; and giving his capable team the opportunity to take on more responsibility.

Bowen remains the company’s sales point person, which allows him to maintain the client relationships he has built, and to retain a window into operations since that team carries out the services he sells.

In addition to his team, Bowen says the company’s extensive use of software and technology has allowed him to let go of day-to-day oversight.

"Our cameras and ground-temperature monitoring technology allows all of us to know what’s actually going on at all of our sites at any time," says Bowen. "And we rely on a pretty healthy stack of software" for operations, task management, training and more. He says despite some software vendors telling him their products are really designed for larger companies, Bowen has found excellent ROI in investing in these tech tools.

"Technology is like a silent employee – that’s the only way we’re able to look like rock stars without a much bigger team. We’re able to do more with less thanks to the implementation of technology."

Insurance: Making it personal but data-driven

For many companies, the only contact with their insurance company comes when there’s an incident. Seth Bowen, owner of Three Men & A Shovel Landscaping, has taken the opposite approach. Just as he would when dealing with a client, Bowen has made it a point to develop a personal relationship with his insurance agent.

"Very few of them are going to have experience in the world of snow and ice management, but you want to find someone who will work to learn alongside you, and who will partner with you. I think it has been critical to our success."

To help build this relationship, Bowen takes his agent (who he’s worked with for 10 years) on annual fly-fishing trips. He similarly works to spend time with other key advisors (his accountant, HR advisor, etc.) outside of a work setting. "There’s a lot of opportunities to talk when you’re floating down a canyon together, and there’s no phones ringing," he explains.

Knowledge is power

With a deeper understanding of the business and a closer relationship, Bowen’s agent "works hard to get us good prices and to manage things for us – and to learn about our business and the whys of what we’re doing." That includes learning about the company’s safety training programs, winter season boot camps and tailgate meetings, postseason debriefs and after-action reports.

"All of these things help because they can be sold to the insurance agent and thereby to the insurance company as risk mitigation tools," explains Bowen. "We didn’t develop them necessarily as risk mitigation tools, but they have that fortunate byproduct."

Ditto for the company’s technology investments. "He knows a lot about my business, because we’ve taken time to sit and talk about it. And he can explain to the insurance company, ‘Hey, these guys have cameras on all their properties, they’ve got GPS on their trucks, their spreaders are tracking exactly where and how much product is being applied – they’ve got all sorts of data.’"

That knowledge is power when it comes to negotiating with your insurance company, advises Bowen, because the more data you can provide, the more that their risk is mitigated. "We could go into a lawsuit today and all of the tamper-proof photos and data can be used to show the contractor provided reasonable efforts given the conditions."

Patrick White has covered the landscape and snow and ice management industries for a variety of magazines for 25 years. He is based in Vermont. Contact him at pwhite@meadowridgemedia.com.