IRRIGATION: Adding Irrigation Installation

To create the turnkey business he wanted to run, Mike Kukol knew he had to add irrigation installation to his overall service mix. Owner of the then 2-year-old Horizon Landscape – now Horizon Landscape & Irrigation Co. – in Wyckoff, N.J., Kukol first offered irrigation system maintenance services, and then moved into the installation. Had he known then what he knows now, Kukol might have done things differently. But 25 years ago, irrigation was a relatively new service, so he adapted a learn-as-you-go approach. “Back then there weren’t a lot of sprinkler systems, so the service wasn’t in high demand,” he says. “But to me, it was a necessity to become the full-service firm I wanted to become.”

IF IT AIN’T BROKE. Kukol and his crews learned a good portion of their irrigation maintenance and installation skills by fixing what they broke.
 
“When doing lawn maintenance, it’s easy to hit a sprinkler head with a mower, chop off a riser with a trimmer or break a pipe with a trencher,” he says. “Correcting these accidents was actually a great way for us to learn how to offer the services ourselves.”
 
Adding system maintenance was easy, Kukol says, as his crews always had the necessary hand tools and shovels on hand to get the job done. Adding installation was a bit more involved – and a lot more costly. Aside from his truck, Kukol’s biggest investment was a $30,000 vibratory plow, or “pipe puller.” To avoid this cost, some contractors rent the machine on an as-needed basis, he says. The total initial startup cost including a truck, trailer, plow, tools and stock was $75,000 to $80,000, he says.
 
The first year he offered the service, Kukol and his crews installed three systems, and the next year they installed 10. For the next few years, the business continued to double at a rate Kukol describes as “explosive.”
 
While it was a challenge to deal with this rapid growth, having well-trained, diligent employees made it easier to handle, he says. Unfortunately, like other aspects of the irrigation industry, training was hard to come by in the 1980s. Kukol attended a night class geared for homeowners led by an area supplier, and trained his crews in-house. Today, he utilizes training sessions held by suppliers and distributors, and requires his crews to attend during the slow winter season. Kukol is also active in the New Jersey Irrigation Contractors Association, which he says is a great place to network and gain insight on subjects like job pricing.
 
Being part of the association also provided Kukol the necessary information about irrigation licensing. Each state has different requirements, so contractors should be sure to do their research. For example, in New Jersey, the company owner’s license covers all of the company’s irrigation contractors. Connecticut enforces different levels of licensing and most people who work on sprinkler systems have to have their own.   

KEEPING CREWS. Kukol’s irrigation installation crews comprise two to three members of his existing landscape crew, and an average install takes one or two days. The seasonal nature of the irrigation business makes retaining quality employees his biggest business challenge, Kukol says.
 
“The best employees don’t want to go on unemployment in the winter, but we just don’t have the financial resources or the workload to keep them on staff,” he says. “Most people prefer to find year-round jobs, so a lot of the qualified ones end up leaving the industry.” Kukol adds a few of his employees have gone to work for his distributors.
 
Because most of the company’s work is residential and requires interaction between contractors and homeowners, Kukol only hires English-speaking applicants. He also requires them to have a valid driver’s license, be mechanically inclined and be willing to work in the dirt and rain. “Anyone with prior irrigation experience is gold,” he says.
 
The winter slump forces Kukol to bring on a new contractors every spring, and hiring for the irrigation division is his biggest headache. While a contractor can feasibly be out in the field in four to six weeks, it can take two to three years to be a really proficient individual who can handle any problem that comes his way, he says.
 
Self-sufficient employees are important, particularly in the spring, which is the busiest time of year for irrigation installations. Once summer arrives, demand for the service drops, Kukol says.
 
“Irrigation installation is an extremely seasonal business,” he says. “Springtime is the worst – the pendulum swings huge.”

PRICING PROCEDURES. Irrigation installations makes up 25 percent of the company’s business and revenue. An average installation job costs about $4,000, and Kukol prices his services simply by knowing the nature of his business for the past 30 years. For each job, he analyzes his equipment use, and labor and overhead costs and determines the markup rate necessary to recover those costs and make a profit.
 
“Some companies charge per head or per zone, but I don’t think a company can effectively stay in business that way,” Kukol says.
 
The company doesn’t advertise, and Kukol says his brand does the talking. “The name on our trucks is all we rely on,” he says. “Once you’re established, people recognize your name and call you up.” Kukol’s customer base consists of local, high-end residents, as the company does not service locations outside of the 8-mile radius surrounding its headquarters.
 
The lack of irrigation maintenance companies in his market results in Kukol’s company acquiring some of its business by default. “A lot of clients hire us because we’re full-service, but many also hire us because there aren’t a lot of other companies doing what we do,” he says.