BUSINESS OPPORTUNITIES: Intro to Patios

Eleven years ago, when Andrew Aksar began installing patios, there were more or less four different paver styles and four different colors. He
traveled around with samples in the back of his pick-up truck.
 
That’s not possible today – one manufacturer alone has 20 different colors, says Aksar, owner of Outdoor Finishes, Walkersville, Md.
 
The wide selection of pavers available today is just one indication of how the market for patios has grown during the past decade. Add to that the option for premium upgrades like fire pits, grills and pergolas, and it’s obvious why many contractors want to be in the patio installation business.
 
Not to mention the profit potential. Aksar, who has a $3,500 minimum on all hardscape installations, realizes a net profit of between 18 and 30 percent.

LEARN AS YOU GO. Just like with any new area of business, the No. 1 piece of advice a seasoned contractor will offer a patio installation newcomer is “know your operating expenses.” That’s the first key to pricing for profit. While prices for paver patios can range from $10 per square foot to $18 per square foot and up, hardscape contractors say never to offer a set square-foot price, as prices should be strictly based on overhead, labor, materials and profit – not a predetermined amount.
 
Another factor to consider in patio pricing is the cost for design. For extensive designs (incorporating a pool, for example), where Aksar engages a landscape architect, he passes along that cost to clients, but he does not charge for patios he, the owner, designs himself because he’s already figured his design cost into the overhead for the project.
 
The policy at Alliance, Ohio-based DeHoff’s FGL, which has several designers on staff, is to waive the design fee for regular customers, but charge newcomers a $35 fee. “We should charge more,” Manager Seth DeHoff says, explaining this rate just barely covers his costs, meaning they aren’t making any money off of the design fee itself. The reason they don’t charge regular customers is because the close rate on these jobs is high.
 
Other elements that could add to the price of a patio include difficult excavating conditions and the inability to use certain equipment. DeHoff’s has installed patios since it added hardscaping to its business in 1990. It averages a double-digit profit margin on most patios.“The profit margin is higher than maintenance, but not as high as chemical lawn applications,” he says.
 
Many  patio installation contractors are self-taught. An abundance of how-to information is available on the Internet and from manufacturers, as it’s a popular DIY project. If a contractor plans to take the learn-as-you-go route to hardscaping, DeHoff recommends he begin with smaller projects like front walks or basic square patios and work his way up to more complicated jobs.
 
He also encourages contractors to attend training sessions and obtain certifications. Manufacturers offer classes for their contractor customers on topics like installation techniques, budgeting, job costing and estimating, Aksar says. In addition, the Interlocking Concrete Paver Institute offers certification programs.
 
Building codes are another operational consideration for installers. Contractors should remember that hardscaping is a facet of the landscape industry, but also is part of the construction industry, Aksar says. Consequently, understanding building codes is essential. This information can typically be obtained from city or county Web sites or by calling their permit and inspection offices. Two patio-related areas to look out for in building code specifications, Aksar says, are steps and dryer vents.
 
“Frequently, a contractor is going to be building steps coming off a house and those steps have building codes for them,” he says. “Also, a lot times there are dryer vents attached to the house in an area where you might be building a step or, if you’re doing a raised patio, the dryer vent might be interfering with the raised patio itself. You need to know those codes so you know if you can modify that vent or not.”

ONLINE MARKETING. There is no marketing tool today more important than the Web, says Aksar, who sees about 75 percent of new business coming from his company’s Web site, which was professionally redesigned about a year and a half ago.
 
Aksar also believes four-color visuals are a high-impact marketing element for any hardscaping contractor, which is the reason his site includes more than 100 photos, his business cards are four-color and he runs print ads in high-end magazines.
 
“Your marketing is what shows your capabilities for the work you can perform,” Aksar says. “If you do very detailed jobs, your marketing should reflect that.”
 
While visuals are important, they count for nothing if no one seems them, Aksar says. “You can have a really well-done Web site, but if it’s not optimized for search engines, it’s just going to be floating out in cyber space,” he says. Search engine optimization (SEO) is the art of Web site building that carefully places key words that will allow a site to appear near the top of the list when an Internet user searches on Google, for example. Some companies pay SEO experts hefty hourly rates for optimizing their sites for searches, but Aksar has refined his site’s SEO himself, learning tips by networking with other business owners on industry message boards.
 
Aksar spent less than $1,500 for a professionally designed site. He also pays about $300 annually for Web hosting and $80 per hour to make changes to site text and graphics. He saw an almost immediate return on investment for those costs, and his site continues to pay for itself, as three-fourths of his business comes from this marketing component.

SALES & DESIGN. In patio design and sales, landscape contractors say closing a deal in two meetings is common. At the initial consultation, DeHoff’s salesperson/designer gathers all of the information necessary for a design, including the client’s goals and preferences and site photographs and measurements. Ideally, he’ll close the job in the second meeting when he presents his design concepts to the client.
 
One sales challenge is educating some clients about the cost to install a patio, contractors say. Some customers aren’t prepared to pay thousands of dollars for a professional firm to install the patio they saw on HGTV. One way to quickly weed out tire-kickers is to put a minimum price on your Web site, as Aksar has done. He publishes a $3,500 minimum on his site to deter calls from prospects seeking tiny patios, like a townhouse owner with a $1,500 budget, for example.
 
Various levels of client hand-holding are required during the design phase, DeHoff points out. Sometimes customers have a very detailed idea about the specific type of patio they’d like, right down to the color, style and pattern of paver. “Other times, it’s up to us to make the suggestions and do what we think works best,” he says.
 
One tool that DeHoff’s designers use to their advantage is landscape design software. Designers take photos of the clients’ yard during their initial meeting, import them into a design program and enhance them with imagery of the design, including patio shape, size and color. These programs range from about $1,000 to $2,000.
 
Now that Aksar can’t carry around all of the samples in the back of his truck anymore, he partners with vendors to help clients narrow down their paver selection. He recommends clients visit his vendor to view the pavers in person. He says, “Suppliers are usually happy to meet with landscape contractors’ clients.”