Creating new sources of revenue from a preexisting business is nothing new. For large corporations, it’s a way of life. However, it doesn’t have to be the exclusive domain of big business. There’s an untapped source of revenue you may be ignoring found in the very dirt under your feet. That source is irrigation services.
From the maintenance of an irrigation system, to its repair and installation, if you’re outsourcing any of these tasks to an independent contractor, you’re giving away an ancillary profit center. And whether we’re in times of economic uncertainty or growth, additional cash flow is always a good thing. Offering a complete array of irrigation services could be a growth area that will breathe new life into your business, along with putting money in your bank account.
If you’re considering offering irrigation services to your clients, but don’t know where to begin, a good starting point is a maintenance service contract. For an annual fee, you would go out at regularly scheduled intervals to inspect their irrigation system. In cold weather areas, some contractors offer annual maintenance contracts that include a spring turn-on and a winterization where water is blown out of the system: some contractors add two mid-season inspections. In warmer weather markets, few landscape contractors offer regular maintenance service.
Maybe it’s because they don’t see the need. After all, you wouldn’t winterize an irrigation system in warmer climates, so what is there to do? Plenty! After all, a system that operates year round is in much more need of attention and maintenance than a system that is shut down from late fall to early spring. Sprinkler heads in constant use are easily damaged or misaligned by lawn mowers, people, and other mishaps. As the seasons change, the irrigation needs of a landscape change accordingly. Rain sensors need to be working properly. Timers have to be reprogrammed to maximize water usage. And that’s just the maintenance of the system!
Part of the Service could involve re-programming the client's controller.
Photo courtesy: Rain Bird
The profit to be made from offering annual maintenance contracts is money on the table waiting for someone to take it home. If you’re already performing landscape maintenance for a customer, that someone is you. Jim Barth of Jebco Horticultural Services, Duvall, Washington, says nearly half of his company’s gross revenue comes from landscape maintenance. The irrigation maintenance contracts the company offers add another 5% to that figure. That’s a nice piece of business to add to your volume.
The beauty of offering maintenance contracts to existing clients is that it adds no appreciable cost to your operating budget. As their landscape contractor, your foot is already in the door. You already have a crew going to the site on a regular basis. Now what you need to do is sell the service. Usually all it takes is one system failure for a customer to see the wisdom in purchasing a maintenance contract.
“A lot of times, I am called out after a customer has tried to fix it himself,” says Barth. “After they do that once, they just hire me. That’s because it costs them as much in their time and materials to fix it, than if they pay me a minimal amount of money to have it taken care of. Especially if we’re already on their site doing grounds maintenance, weekly for the growing season, and twice a month for the rest of the year, then it’s cost-effective to have us take care of it.”
The larger the system, the more likely a customer will purchase an irrigation maintenance contract. “They have other things they would rather do than go out and adjust an irrigation system,” says Barth. “They pay me to take care of it, to make sure it’s working. To make sure they’re not overwatering or underwatering. And they don’t have to worry about it.”
To keep the sprinklers from watering the sidwalk requires adjustments. This is part of the service offered.
You can also take it slowly. If you’re not ready, you probably shouldn’t attempt to offer a complete array of irrigation services overnight. Barth’s solution was to offer only the services he could handle. That way, he avoided financing any huge capital investment. As the irrigation business grew, it financed its own expansion.
There’s also a unique franchise company called Service First Irrigation of Lansing, Michigan, that offers technical training and support to landscape contractors who want to integrate irrigation services into their business plan. It’s an all-inclusive crash course on irrigation services and installation; manager John Eggleston says it’s ideal for anyone wanting to focus building their business around irrigation services.
“We realized that landscape contractors were taking the service segment of the business for granted,” says Eggleston. “We looked at profitability and felt there was a lot more potential in that area. So we put together a very strong package for contractors to market and build the service side of the business.”
Still, some landscape contractors prefer to sub-contract irrigation services to another company. Your organization may fit into that category. Phil Cleland, of Chicago Specialty Garden, feels his company just doesn’t have the need right now, nor could it support a crew necessary to offer the service full-time. “When we need it (irrigation services), we can get it,” says Cleland.
It’s a sentiment echoed by several landscape contractors we spoke with, and it’s understandable. There’s a natural reluctance to branch off into unfamiliar territory. And if you’re happy with the income your company generates, why fix it if it isn’t broken?
That’s when you have to tap into the entrepreneurial spirit that first motivated you to go into business for yourself. You took a chance and succeeded. If growth and increased income are part of your business plan, irrigation services are a perfect fit. It’s really not that much of a departure from what you’re already doing.
For Donna Vignocchi, of ILT Vignocchi, Chicago, Illinois, branching out into irrigation services wasn’t just good business sense; it was a matter of practicality. “We’re in a very competitive market, where we’re dealing with very high-end residential and commercial customers. When there’s a problem, they want someone there immediately. It’s very difficult getting a sub-contractor to be there when you want them to be there.”
|Checking the valves to make sure they don't leak is part of the service.|
Finding a reliable irrigation sub-contractor became a problem; so ten years ago, her company went into the irrigation business for themselves. As a design/build company, they take a project from infancy through the final product. Before any plants, sod or fine grading touch the ground, Vignocchi’s crews install an irrigation system. “If we have it in-house, we can control that the installation crews are going to be there when we need them. Our jobs can continue forward with both quality and profit being at a higher level.”
Irresponsible sub-contractors weren’t what motivated Becker Landscape Contractors of Indianapolis, Indiana, to start offering irrigation services. It was a desire to offer more services to their customers. Ten years ago, the company hired a sub-contractor to do its irrigation work. Now the company does it all in-house. Manager John Coons says 40 percent of the company’s business is now generated by the irrigation division. Of that work, 75 percent is installation, 25 percent service and maintenance.
Offering a complete array of irrigation services keeps your customers from going elsewhere with their money. It’s called one-stop shopping; a concept that works for large retailers like Wal-Mart and Home Depot, and it can work for you. The less customers have to shop around, the more time they can spend running their business. By providing your customers with one-stop shopping, you can increase the amount of money they’ll spend with you.
Keeping more money in your hands is always good business sense; controlling the image your company projects is common sense. Most every business and homeowner has his or her horror tale of the contractor from hell. You don’t want your company to be the protagonist in that drama. While you can pretty much control what you’re company does at the jobsite, much of what a sub-contractor does is out of your hands. Sure, if they mess up, you can never use them again. But the damage has already been done.
Say you’re doing a job for a client and you’ve hired a sub-contractor. You’re facing an absolute deadline, a day the job has to be completed. The sub-contractor knows the situation. But something comes up and the crew you’ve hired doesn’t complete the job on time. You’ve just lost that client.
“Anybody that you sub-contract with when you’re in a service business, whatever they do, or don’t do, will leave an impression upon the client,” says Vignocchi. “We want to control that impression.”
Leaving a good impression is the main reason why Barth doesn’t sub-contract out the work, especially when dealing with the residential sector. “A residential customer purchases you. They don’t purchase your name or your company,” says Barth. The employee you send to the job is your company’s public face. The rapport your employee establishes with your client is probably as important as the job they do. “By developing a long term, open relationship, you will benefit in the long run in terms of your customer relationship and keeping that customer.”
Offering customers an array of irrigation services also opens the door for immerging fields that could prove to be another source of revenue you haven’t tapped. One of those is landscape lighting. That market segment is growing by 20 to 25 percent a year. Can you afford not to get a piece of that pie?
Five percent of Vignocchi’s total gross revenue is generated by the irrigation services her company provides. That service includes low-voltage, landscape lighting. She projects continued growth driven by consumer demand. “We consider it a service module of our business. We make money at it, and it’s keeping our customers happy. As long as the demand is there, it is something we will offer, and it’s profitable.”
Water conservation is emerging as another source of income for the savvy landscape professional. Water purveyors throughout the country continue to put restrictions on water usage as construction grows and water sources are strained. With the price of water skyrocketing, consumers will demand more efficient irrigation systems. Restrictions on water usage, in turn, make the knowledgeable irrigation service provider a valuable commodity.
Whether you’re dealing with commercial or residential clients, it’s important to remember you’re providing a service, a service that can be gotten elsewhere. You want to set yourself from apart from your competition. Offering a complete array of irrigation services is one way to stand out among the crowd. Getting customers in the door is half the battle; the other half is keeping them.
That’s where service enters the equation. Stay ahead of the game, address issues before they become problems. A customer wants to know that things are being taken care of. The fewer problems a customer has, the happier he or she will be. And a happy customer is a return customer.