Wednesday, July 21, 2010

Expanding Landscapes - Brothers' Diverse Business Sprouts Sales

Originally published June 30, 2002

By Dick Youngblood Staff Writer, Star Tribune

With $100 in his pocket, John S. Mickman hitchhiked to Alaska after his graduation from the University of Minnesota in 1972 and wound up laboring on a shrimp boat operating out of Kodiak Island.

Think of him as the adventurous member of the family.

John's younger brother, Chris, remained behind to study forestry and horticulture at the university.

Call him "the idea guy".

There's a reason I've come up with these labels. It seems the Alaska adventure palled a bit after John married and he found himself at sea for months at a time. That meant he missed the birth of one of his children, as well as the first times she walked and talked.

"So I was telling Chris on a vacation back home that I had to find something else to do," John said. That's when the idea guy came up with a concept that grew into a multifaceted Ham Lake enterprise called Mickman Brothers Inc.

"Why don't we start a landscaping business?" Chris suggested. That was 1975, the beginning of a business partnership that yielded $8.4 million in revenue last year.

More to the point of today's seminar, it's a partnership that has exploited the Mickmans' complementary skills and their eye for opportunity to give new meaning to the notion of diversification. Consider:

  • Shortly after starting the landscaping business in the basement of their mother's Fridley home, the Mickmans began hearing requests from customers for sprinkler services. And so the irrigation division was born in 1977.

"We thought from the beginning that the more diversified we could get, the better we could react to changes in the economy and the weather," said John, 51.

Sales: $800,000 for landscaping, $1.2 million for irrigation in fiscal 2002 ended Jan. 31.

  • On a 21-acre site along Hwy. 65 in Ham Lake, the Mickmans began storing the shrubs and trees used for landscaping. Whereupon, passersby streamed in to try and buy the greenery. Voila! The Mickman Brothers Garden Center opened in 1987 with an old Soo Line caboose as the office.

Why a caboose? "It was an inexpensive way to get into a highly seasonal business," said Chris, 45.

Sales: $1.2 million in 2002.

  • Shortly after the garden center opened, the Mickmans got to talking about how to use 10 acres of peat land on the property that were overgrown, unsightly and inappropriate for building.

"Well, it's about the right size for a golf driving range," Chris mused. The result: a range with 45 tees and an instructor armed with video equipment to help analyze wayward swings.

Sales: Two wet springs in a row trimmed sales to about $100,000, down from an earlier peak of $125,000.

If you've been counting, you've figured out that total sales of these enterprises - $3.3 million - are way less than half the Mickman Brothers total cited earlier. That's because the largest contributor to the revenue stream is a business the brothers did not start - although they certainly expanded it from a local into a nationwide enterprise.

We're talking Christmas wreaths sold to nonprofit organizations for fundraising purposes, a business their father, John V. Mickman, started as a sideline to his job as a Honeywell engineer. When he sold the business to his sons in 1977, the Mickmans were assembling and selling maybe 15,000 wreaths a year, all in the Twin Cities.

"Then we figured out that Christmas was celebrated outside of Minnesota, and we were on our way," Chris said.

The upshot: The Mickmans' fundraising division sold upwards of 600,000 wreaths in 49 states in fiscal 2001, generating $5.1 million of revenue.

Because of the wreath venture's success, the Mickmans have focused time and investment on the fundraising division, to the detriment of other parts of the business.

Indeed, because Chris' job of building the wreath business conflicted with his supervision of the landscaping operation, they closed the landscaping office for six years in the 1990s.

And until the spring of 2001, when the Mickmans opened a $2 million expansion that added 17,000 square feet of office and retail space and a 7,000-square-foot greenhouse, the only facilities on the site were a pole barn, a small house, several plastic-covered hoop houses - and that caboose.

Now the brothers are intent on expanding these two enterprises at rates well in excess of the 10 to 12 percent annual rate they've imposed in the past.

Thus, John has broken down the garden center operation to promote efficiency and doubled the promotion budget to 4 percent of sales. His goal: a 30 percent sales increase this year, to nearly $1.6 million.

Meanwhile, Chris has tripled the investment in equipment and people in the landscaping division, including the hiring of an award-winning landscape designer. His goal: tripling sales, to $2.5 million, within five years, including a 15 percent gain this year, to $925,000. They also expect wreath sales to grow 10 percent this year, to $5.6 million.

All of which is the product of as nicely balanced a package of skills as you'll find in any partnership.

Chris, by all accounts, is the creative force, as well as a gifted recruiter of management talent and a hands-on executive who thrives on digging into large, complex projects.

And John is "the meticulous planner," said their banker, Jerry Roehrich, senior vice president at the Highland Bank. "It's not too often you'll find that kind of detailed planning in a company that size."

The result is a company that has never had a down year, despite its seasonal business.

Copyright 2006 Star Tribune. All rights reserved.

No comments:

Post a Comment