It’s the end of summer of 2008.
Gas prices have spilled over $4 per gallon across the country. The housing market has taken a fall and is still waiting to get back up. Businesses across the country are posting quarterly deficits, and trying to ‘trim the fat’ as much as possible.
Coupled with economic woes, drought is plaguing communities across the country–from Georgia to Nevada and officials are imposing unprecedented restrictions, and even outright bans, on water features.
In Nevada, customers of the Southern Nevada Water Authority are only allowed to enjoy ponds or water features that do not exceed a 25-square-foot surface area.
In Georgia, where drought conditions and perilously low water levels in reservoirs prompted Governor Sonny Perdue to proclaim a state of emergency last October, some residents were living under a Drought Response Level Four, which banned the use of ornamental fountains and water features.
With a not-so-hot economy and regulations in place to conserve our dwindling water supplies, some water feature contractors will simply wade in the water, feed into the doom and gloom and wait for the storm to pass. But instead of buying an umbrella and galoshes, you can utilize these conditions as a great opportunity and a means to gain an edge over the competition.
D-I-V-E-R-S-I-F-Y.
Go Toward the Light
With any business, the best way to diversify is to sell complementary products or services. If a customer has committed to livening up their backyard with a pond, it is likely they are going to want to enjoy their prize investment when the sun sets, making landscape lighting a fitting upsell.
Paul Holdeman, a Certified Aquascape Contractor (CAC) and founder of Arizona-based The Pond Gnome, has been designing and installing water features for nine years. Having installed over 250 Aquascape ecosystems throughout the state, he recently changed hats to tackle his first landscape lighting job when he accented his latest commercial water feature project a 250 x 75 square-foot retention area adapted with six Aquascape water features at Regents Apartments in Scottsdale, Arizona with surrounding luminescence.
“Up until about a year ago, lighting wasn’t really an accessible option,” said Holdeman. “When I switched distributors, I received access to all the tools needed to install lighting, as well as knowledgeable people to show me what to do.”
Assisting him with his segue into the landscape lighting business was Roger Ramsey, specialty products representative for Ewing Irrigation.
“Anyone in the water feature business can figure it out in a day with a qualified lighting guy like Roger,” Holdeman added.
To secure the add-on lighting package, Holdeman and Ramsey collaborated to set up a night demonstration, key component to landing any landscape lighting project or contract, for the property managers of Regents Apartments. The demo proved successful and Paul was officially wired into the lighting business, generating an approximate 30 percent gross margin for the lighting portion of the project.
Some contractors may be intimidated by the technical skills of the trade, but Holdeman believes lighting is easy to pick-up, especially with a high-end voltage meter.
“For about $100, this thing has a brain of its own and decides what voltage to use for you,” Holdeman said.
Another thing he stresses is making sure to keep your lighting and water feature pricing separate.
“If you don’t, the numbers can start looking ugly,” he added.
With his first job behind him, Holdeman said he looks to incorporate lighting packages into the larger commercial jobs he hosts in the future.
“By offering landscape lighting as an option for his customers, Paul is gaining an edge over his competition,” Ramsey noted.
According to Ramsey, diversifying is also an excellent growth strategy, and enables contractors to have multiple streams of income that can offset harsh conditions and increase sales and profit margins. It is also a way to give your customers a consolidated service provider, which is a favorable selling point for clients, who often prefer working with one contractor they trust.
“Both lighting and water features are all about making your backyard livable,” Holdeman said. “During the summer in Phoenix, where temperatures can reach over 100°F during the day, the most opportune time to experience your water feature is at night when its cooler. You have to add the light.”
Hardscaping
The term ‘hardscape’ refers to the stonework areas of a landscaping project, characteristically including flagstone paths, patios and retaining walls.
As drought prompts watering restrictions across the country, and as sustainability-minded customers choose to do away with lawn watering, hardscaping is quickly gaining ground in the green industry, making natural-looking hardscape features, such as rocks, stone and wood elements of choice.
Unlike a traditional landscape laden with grass and shrubbery, hardscaping requires little or no maintenance, which saves time and conserves natural resources like water.
“Margins can usually be 50 percent or more for the contractor,” said Bruce Basehore, product sales manager for Ewing Irrigation’s newly established hardscape division. “If you pay $4 per square foot for pavers, for example, you might charge the customer $15 to $20 per square foot, resulting in a high-dollar ticket.”
A hardscape division could be started with the simplest of tools – shovels, rakes, hand tamper, string line, line level, 42 level, hammer and a broom. It is wise to rent machinery like excavating equipment, vibratory plate compactors and brick saws until you are doing enough work to warrant a large equipment purchase.
But most important tool, Basehore explained, is proper training.
“It is so important to sign up for training and learn to install hardscape properly. Learn the correct tools, processes and the right way to bid a job,” Basehore added. “Hardscaping should be easy for water feature contractors because the two services are intertwined anyway.”
Look to the Future of Rain Water Harvesting
Georgia made national news last year when Lake Lanier, a major water source for the Atlanta metropolitan area, sank to record low levels and residents were given the news that, if Mother Nature didn’t lend a hand, they would only have a three-month supply of drinking water left.
“In certain areas of Georgia they weren’t allowing people to install new water features, and officials were only allowing existing water features to run, especially if there was aquatic life,” said Dave Kelly, vice president of product management and development for Aquascape, Inc. “They were talking about banning them completely and in some areas they did. The drought situation in the whole Southeast has hit hard and is threatening our contractors’ ability to make a living putting in water features. They were screaming for help.”
Now it appears that Aquascape, Inc. has help on the way and it comes in the form of a rain water harvesting system.
The rain water harvesting system will capture storm water runoff from rooftops and use it to supplement existing water features, while also giving the homeowner access to filtered water for watering gardens and lawns without utilizing city or well water.
While the finished product won’t be directly available to the public until January 2009, Aquascape implemented their first-ever Aquascape rain water harvesting system at a residence in drought-stricken Grantville, Georgia, at the end of April. The prototype system was a success and they estimate to have 25 systems installed in various parts of the country by the end of July.
Rain water harvesting systems not only solve water restriction issues and offer environmental options for consumers, but will be a profitable entity that contractors can add to their existing services.
“A rain water harvesting system is like the Trojan Horse of selling water features, meaning it opens up a lot of doors and opportunities for sales,” Kelly said.
As occurrences like the one in Georgia start becoming more commonplace, water feature contractors will need a solution for sales and a solution to the water scarcity problem.
Kelly said there is still heightened awareness in Georgia about water use even though the conditions have subsided slightly with rainfall, but the overall perception of installing a water feature remains questionable.
“With a rain water harvesting system in parallel to a water feature, our contractors can now be a part of the solution and not the problem,” Kelly added.
New Service, New Spirit
From landscape lighting and hardscaping to rain water harvesting, there are several available options to consider when looking into diversification. Before you start the process of growing your business, be sure your company is in a good position financially to take advantage of a new opportunity. If finances are secure, start looking into the additional resources–staffing, equipment, vehicles, and so forth, needed to get your expanded business up and running. One of the most valuable, and most often overlooked, resources is proper education pertaining to the add-on service. Be sure to put yourself and your employees through proper training. Doing a job right the first time will generate referrals down the road.
Lastly, map out goals and revenue projections for the new service offering. Create a marketing plan and decide how you will target customers. Remember the beauty of diversifying is that you already have a database of past customers at your fingertips that may be ready to rejuvenate their landscape.
Diversifying is essential to bringing your business back to life. Business can bare monotony over time; selling the same service year after year can flatten revenues and weaken your passion and drive. By carefully implementing a new service, you can take your business, and spirit, to a higher level.
Sarah Ellis is an education outreach specialist for Ewing Irrigation Products, a distributor of water features, low-voltage lighting, hardscaping, water management solutions, commercial and residential irrigation supplies, landscape and agronomic products and industrial plastics. She can be reached at:
sellis@ewing1.com
