A Blossoming Business

A Blossoming Business

COMPANIES by Mark Gordon | Managing Editor

The thought of getting bigger once scared Charlie Lenger to death. Guts combined with investments - $1.2 million on in-house, innovative pricing software, for instance - changed all that.

Charlie Lenger considers the time she led her plant business from $1 million in annual revenues to $2 million like a harrowing trip through Death Valley. So much so, she started and stopped the journey twice, mostly due to fear of not having reliable quality control, the right infrastructure without taking on too much debt or the right people in the right jobs.

In short, it was fear of failure that stood in Lenger's way.

That fear and its subsequent pauses, though, are aberrations when looking at the full body of Lenger's entrepreneurial work the past 25 years. Most times, Lenger's fear motivates, not suffocates.

How else could Lenger, when she was only 21 years old, turn a $50 curb-side plant-selling business into $10,000 in just six months? And how about the time, with virtually no experience in software, Lenger was able to co-develop a bar code scanning system that's now a key part of her success? Finally, how else could Lenger develop an innovative bonus pay plan that simultaneously fights the issues of customer satisfaction and employee retention?

Lenger has done those things and more while running Sarasota-based Tropex Plants, a plant sales and leasing company - interiorscaping in industry lingo - that focuses on setting up businesses with an array of plants and flowers, either to rent or buy. It also has a few residential clients, as well as a division that works on holiday decorations for more than 100 Sarasota-area businesses.

"It's not like you are born with some predetermined ability to do this," Lenger says. "You just have to be willing and risk-adverse."

After surviving its trip through Death Valley, the company has gone on a mini-growth spurt the past few years; it grew 8% in 2005, to $2.5 million in yearly revenues, followed by 37% growth in 2006, to $3.7 million. Plus, in a field known for its easy entry and narrow margins, Lenger says Tropex turned a 7% profit in 2005, one of the best in the industry.

Tropex has 56 employees spread out across seven Florida locations, where in total, it leases and cares for up to 60,000 plants. In addition to its Sarasota headquarters, it has facilities in Tampa, Fort Myers, Naples, Miami, Fort Lauderdale and Palm Beach.

Hooked on business

Lenger learned some of her risk-adverseness as a young child growing up relatively poor in the Fort Lauderdale area - her mom worked three jobs while raising Lenger and her two siblings. Lenger recalls that she got to keep the loose coins her mom brought home from her job waiting tables, which taught the young Lenger the value of saving every penny.

And it wasn't until Lenger's last semester at Sarasota's New College, when she took an applied entrepreneurial theory class, that she learned to appreciate business.

The class was taught by Robert Snelling, the founder of a national staffing firm and a business author.

After the class, Lenger was hooked on doing something in business. And she followed her passion, choosing plants as her entry into entrepreneurialism. Live plants, says Lenger, "make people feel good."

A short time later, Lenger was running her own business, albeit a very small one. Starting with $50, Lenger bought some plants and began selling them at two busy Bradenton street corners. To add some class, as well as some shade, Lenger borrowed fancy umbrellas from a pair of tony Palm Avenue Sarasota restaurants.

When Lenger had $100 in sales, she bought $50 more worth of seeds and plants. And when she made $200, she spent $100; it was a make-and-reinvest plan that kept on going until it reached $10,000. Along the way, Lenger hired two New College students to work the booths, while she took business classes at Manatee Community College and the University of South Florida.

In 1981, Lenger used the seed money she made to start Tropex. The idea was to create a beautiful and expressive product, says Lenger, something that would say 'luxury' at fine hotels, 'inviting' at country clubs and 'successful' at waiting rooms. Today, adds Lenger, "We have plant designs which say traditional, modern, tropical and even sexy."

Her first client was Tim Siebert, then running a Sarasota-based architecture firm. Siebert, who used Tropex services for more than 20 years, remembers being impressed by Lenger's confidence, despite her being a complete novice.

"She knew how to make things grow and keep them green," says Siebert, now retired. "And if something went wrong she knew what to do and how to fix it."

Clear expectations

One problem Lenger encountered early on with Tropex was something familiar to any entrepreneur or executive: Reliable quality control.

From the very beginning, ensuring that plants were set up properly and accounts were maintained well was a constant headache. The situation culminated when Lenger heard an employee walking through the warehouse using foul language to describe the flaws she encountered in the field.

"I saw it as a system of fires and fire hydrants," Lenger says. "I had to build a system to stop the fires in the first place."

Lenger's solution was to come up with a bottom-heavy bonus plan, that works like this: Supervisors inspect three accounts per technician per quarter. Lenger and her staff use a binder-thick guide of pictures - actual photos of client's plant set ups - to judge the work. There are photos showing what works and what doesn't.

The pictures are broken into 21 categories, such as "leaves clean" and "soil level correct." The grades for each category are unacceptable, acceptable and ideal.

Grade judging is a key part of the plan, says Lenger. Instead of being just a supervisors' say-so, Lenger wanted the customer to have a big say in the process. So she hired a marketing firm to poll 250-plus clients and have them rank the categories by what's important to them. Those seven categories are at the top of the list.

The rankings lead to a final score. To earn an overall ideal, a technician must score an ideal in the top seven categories and then an ideal or an acceptable in the remaining 14 categories; to earn an overall score of acceptable, a technician must score an acceptable or ideal in the top seven and no more than one unacceptable in the remaining 14; an overall unacceptable is scoring that ranking at least once in the top seven, or more than three times in the remaining 14. (See related story.)

The pay-off comes in the rewards and consequences. An employee scoring an overall ideal gets a $260 bonus, which could be as much as $780 every three months for three ideals. The other scores have consequences: An acceptable means the employee will still get a pay check, while an un unacceptable means the employee will get fired.

The system, which Lenger thought of in 1989 during her time in $2 million purgatory, gave Lenger the most leverage while solving several problems. She could use it both as a way of making sure each client was taken care off and to motivate employees. It also set up long-term, written standards and expectations.

"Most people will knock themselves out to meet your expectations," says Lenger. "They just need to be clear on what those expectations are."

A unique code

Lenger has a history of creating her own solutions to thorny problems.

Her first jobs as a teenager and in college were as florists and plant shops, where she would come up with suggestions to save money, such as pooling drivers from all the florists in an area or how to arrange tables for the best use. "I kept coming up with ideas," Lenger says, "but at no place I worked did anyone listen to me."

Lenger has had an easier time putting some of her ideas to work at Tropex. In addition to the quality control plan, one of Lenger's most practical solutions at Tropex was the creation of GreenScan, a bar code program that replaced an archaic data entry system. Lenger began working on it in the late 1980s, around the same she created the quality control plan.

It took several programmers and $1.2 million in research and other costs to work out the kinks and the details, but by 1997 the product was ready. It could track a unique code for 220,000 plants, as well as customer locations and technician's routes.

Once the company regularly began using GreenScan, the mistakes rate dropped significantly, to one in 70 million scans as opposed to one every 300 keystrokes in the data entry system. Also, it allowed technicians to improve their inventory tracking and managers to improve how they counted profitability per account.

The latter point - perfecting profit per client - has been a particularly important feature of GreenScan. It has allowed Lenger and the account managers to set up fair prices, and it has also provided a clear picture of which clients have been cost-friendly and which ones haven't been.

"Plant companies who don't have extremely accurate per client profit make money at first," Lenger says. "But over time their profits slide as they lose the high margin clients and keep the low margin clients."

Solutions to small and big problems, such as GreenScan, have been the driving force behind Tropex's growth, both the accidental kind and the planned kind that initially scared Lenger off.

Lenger says one of her next big tasks is to overhaul the company's Web site, which she says is in dire need of an upgrade. She also plans to slow down Tropex's growth over the next year or so, to keep up with new clients the company's picked up over the last year.

REVIEW SUMMARY

Business. Tropex Plants, Sarasota

Industry. Plant sales and leasing

Key. Company has grown through problem solving, such as improving quality control and updating internal software.

BY THE NUMBERS

Tropex Plants

Year Revenue Growth

2004 $2.5 million

2005 $2.7 million 8%

2006 $3.7 million 37%

Average Annual Growth: 22.5%

2004 employees: 45

2005 employees: 48

2006 employees: 56

Source: Tropex Plants

Working for a living

For one executive, work is its own payment

It's unlikely Charlie Lenger, founder of Sarasota-based plant leasing company Tropex Plants, will ever find herself immersed in a controversy about whether chief executives are overpaid.

At least if she does, she'll be on the short end of the pay scale: Lenger sets her salary on a basis of what she needs, not what she's worth or how many hours she works. She earned $100 per week for Tropex's first 10 years, and then slowly moved into the $200 and $250 a week range.

She hit $400 a few years ago, and only recently bumped herself up to $750 a week. "My idea of being rich," says Lenger, "is going to Publix and being able to buy what I want."

Besides, Lenger says treating her employees well is a constant goal, and one way to do that is by padding their wallets and purses. It's the advice she gives to other executives and entrepreneurs. Says Lenger: "Pay so much it hurts."

-Mark Gordon

CEO TIPS

INCENTIVES PROGRAM

The account inspection program that dually serves as a bonus plan and a quality control program at Tropex Plants could be duplicated at any type of service business, Tropex founder Charlie Lenger says. Here are five of her tips to implementing the program.

• Create categories for grading by polling employees and customers.

• Prioritize those categories by asking customers which ones are most important to them.

• Define categories with easy to follow grades: At Tropex, supervisors use unacceptable, which translates to looks bad for the client; acceptable, which looks good to the client; and ideal, which is impressive.

• Set up rewards and consequences for each grade. At Tropex, an ideal is worth a pay bonus up to $780 a quarter; an acceptable is you get to keep your regular pay; and an unacceptable is you get fired.

• Make the bonus significant, at least 10% of an employee's pay.