Pave the way: Terry Morrill got wiped out in the real estate bust, but now he's bounced back thanks to the boom in high-end home landscaping.

TERRY Morrill was a practicing Scientologist for nearly 25 years before he decided to apply the religion's management principles to his new business.

Relying on hunches had cost him millions of dollars when his real estate investment firm folded in the 1990s. So upon starting Morrill Landscape Group, he implemented L. Ron Hubbard's system of establishing statistical goals for all positions within a company.

If goals are not getting met, Morrill assesses where the weakness lies--with the individual or elsewhere in the system. Then he makes the necessary adjustments.

Since its founding in 1999, Morrill Landscape Group has grown dramatically--its average annual revenue growth of 92.5 percent was enough to rank 403rd on Inc. magazine's 2004 list of fastest-growing companies.

"Since we started this business, we haven't had one day when we had to send somebody home because there was no work," said Morrill.

Scientology isn't the only reason. Low interest rates and soaring property values have given homeowners access to cash for upgrades. Add to that post-9/11 cocooning that had many Americans sticking close to home. "We felt people would be spending their money on their homes," he said.

Well-done home improvements advertise themselves when family and friends stop by (a third of the business comes from referrals). Morrill also got the word out by sending mailers, placing displays at home shows and advertising at job sites. He's made three appearances on Home and Garden Television.

"The idea of having a pond or waterfall in a back yard never occurred to (many people) before they saw it on television or a magazine," said Barbara Lampson, an Altadena landscape architect.

Returning look

The biggest part of the business (75 percent of revenue) comes from installing driveways made of concrete pavers that resemble cobblestone. The rest is divided between general landscaping and building ponds.

Cobblestones were a popular paving material a century ago, but between the two world wars, clay bricks were used as a cheaper-to-produce substitute.

In the early 1980s, there was improvement in technology that allowed manufacturers to mix, pour and mold the less expensive concrete bricks three times faster than before. Over time, the aesthetics of the products improved, too, and homeowners gravitated toward pavers.

Today, $6 billion in revenues are generated from more than 600 million square feet of concrete bricks installed each year, according to the Interlocking Concrete Pavement Institute.

For a 1,000-square-foot driveway made of concrete pavers Morrill charges an average of $8,000; larger driveways with tumbled pavers (chipped at the comers to give them an older look) can run up to $41,000.

The average-size pond, 36 square feet with a five-foot-long stream connecting it to an upper basin, costs $7,000. Morrill has landed projects that generated as much as $100,000 for a 1,200-square-foot pond and several waterfalls.

Morrill tries to separate himself from the crowd by making sure his crews show up on time, among other things. He rarely subcontracts out, instead keeping work within the company.

Morrill has 14 crews, made up of at least four workers each. His 23 dump trucks and eight pickup trucks were paid for with cash--only as more crews were added. Debt hovers around $200,000, mainly for a new facility he built next to his Sun Valley storage yard.

The number-crunching follows a design pioneered by Hubbard, the Scientology founder and science fiction writer who preached that every worker should have a job description and a statistical goal to reach. Morrill keeps track of how many appointments his salespeople make and how many referrals his marketing staff gets.

One salesman realized during a weekly meeting that his revenues were down because he was spending so much time with prospective clients that he wasn't making follow-up calls to those who asked for quotes. "We call the whole thing 'managing by statistics,'" said Morrill. "You make decisions directly in accordance to what the statistics say, not how you feel about the person."

The lesson was hard-learned. From 1976 through 1982 and from 1986 through 1995, Morrill bought, renovated and sold 40 apartment buildings along the Wilshire corridor.

He stopped buying buildings when the bottom fell out of real estate in 1991. But he still had six properties totaling 200 units and a vacancy rate that reached 40 percent after the 1994 Northridge earthquake.

All those were either foreclosed or sold at a loss. The worst case was a 96-unit building Morrill bought for $4.3 million in 1990 and sold four years later for $1.8 million. "When I was buying and selling real estate, I was more of a speculator, not a businessman," he said.

With interest rates staying low for longer than many economists predicted and travel returning to pre-9/11 levels, Morrill is wondering how to adjust when the home-refinance boom plays out. One idea is to broaden the portfolio of services.

"If we had a paving stone customer, we don't necessarily get repeat business," he said. "But a lot of paving stone customers need landscaping and a lot of landscaping customers need ponds and paving stones."

PROFILE

Morrill Landscape Group

Year Founded: 1999

Core Business: Cobblestone driveways and man-made waterfalls and ponds

Revenues in 2003: $6.1 million

Revenues in 2004: $8.6 million

Employees in 2003: 65

Employees in 2004: 85

Goal: Establish solid base in Ventura County

Driving Force: Desire to beautify homes and increase their value