IRRIGATION: Incorporating Irrigation

The summer of 1997 was very hot and dry in Sartell, Mo. Michael Hornung and his crew at Valley Green Cos. came across more damaged lawns than healthy lawns as they performed their routine lawn care and aeration services and realized that most of their clients’ irrigation systems were either not running or running improperly. To resolve this problem, Hornung and his technicians decided it would be a good idea to install and maintain the sprinkler systems themselves.

To promote this idea, Hornung sent postcards advertising the service to his 1,200 accounts. “Within a month’s time I had more than 200 customers send their postcards back saying ‘Yes, I want you to start my sprinkler system,’” Hornung says. “And that’s how our irrigation installation and maintenance services began.”

Irrigation installation and maintenance now comprise 30 to 35 percent of Valley Green’s business and brings in an average of $315,000 annually. In a way, this profitable add-on service is simply Hornung and his crew picking up the slack of less reputable companies. “There are a lot of companies that emerge, install a system for next to nothing and then are out of business a few years later because they managed their business poorly,” he explains. “Oftentimes what we see happen is we get hired to do the maintenance for clients whose installation companies left them with nowhere to turn. Then we benefit and get more work from positive, word-of-mouth referrals.”

WHAT DOES IT TAKE? Hornung admits to not knowing much about irrigation when he incorporated the service into his lawn care business that hot summer 10 years ago. But by utilizing the resources around him, he was able to learn about it rather quickly. He first went to his local supplier who helped him get the service off of the ground. The supplier advised him to only offer irrigation maintenance services to his existing customers during the first initial stages of implementation, so as to not get overwhelmed with too much too soon. “Our supplier was very instrumental in not letting us get into the installation side of things too quickly,” Hornung says. “If you get too big too fast it will cost you because you don’t have the trained people or the experience to handle it.”
 
If Hornung and his crew treated a lawn they felt was in poor condition and thought the irrigation system wasn’t working as it should, they would contact their supplier who would come out to the property and help diagnose the problem. “We tried to smooth out the learning curve by having someone who knew what they were doing around to help,” he explains. “We then learned from his guidance.”
 
After the first year, Hornung also sought the guidance of a retired gentleman who had spent much of his career in the irrigation industry. His knowledge was crucial in implementing the irrigation installation aspect of Valley Green, Hornung says. “He basically walked me through the process of installation and fixing existing problems,” he explains. “Since he was retired, he had the flexibility to be a part-time employee who helped out 20 to 25 hours a week. The first person he suggested we hire still helps run the service today.”
 
A third way Hornung took advantage of industry relationships is through a partnership with a lawn maintenance company, also based in Sartell. For the past 17 years, the two companies have referred one another for jobs the other doesn’t do, giving both companies the benefit of great word-of-mouth.
 
“We met at a McDonald’s where they were finishing up the mowing and maintenance and we were getting ready to do the fertilization,” Hornung says. “We struck up a conversation and have been working together ever since. It’s been a great relationship because neither business had to add additional services that it wasn’t good at, and we didn’t have to deal with fierce competition as we grew.”
 
With the necessary guidance firmly established, Hornung then needed the necessary equipment. One such piece of equipment was a plow used to pull piping through lawns and dig trenches, which Hornung rented from a rental agency on an as-needed basis for about $100 per day. It took until the company was doing at least 50 installation jobs a year before Hornung could justify purchasing one. “If there are 25 weeks in an operating season, I felt we needed to do more than two installs a week to justify having the equipment on our lot,” he explains. “Until then, it paid to rent it.”
 
Other equipment Hornung purchased within the first two years of performing irrigation installation and maintenance was electrical wire locating equipment, a handheld remote control and the typical shovels and handheld tools. “We basically added equipment as we grew and realized we needed it,” he says. “With irrigation, a lot of the equipment is technical so if you and your crew know how to use it, you’re in good shape.” (See “Equipment Checklist” on page 148.)

INSTALLATION DON’TS. As the business grew, Hornung realized some of the dos and don’ts of incorporating irrigation installation and maintenance as an add-on service. “When you don’t know how to do something, you make a lot of mistakes,” he says, simply.
 
One of those mistakes was improperly managing the business’ growth. Instead of adding just one or two skilled technicians to his overly busy crew, Hornung decided to add a second crew – a decision that ended up losing him money. “The second crew was not 100 percent active so we didn’t make any money – we lost money,” he explains. “You have to be able to fully maximize a second crew to benefit from that kind of drastic addition.”
 
Today, Hornung has one full-time dedicated three-man installation crew and one full-time service technician, a combination that suits his business’ current needs.
 
Another mistake was not charging enough on a per-hour basis to cover his overhead costs. “We were actually going out and losing money the first two or three years because we hadn’t looked at our true labor costs,” he says. “Once we knew what we should have been charging, that really helped.”
 
To price his business today, Hornung considers the product cost for a specific job based on the number of sprinkler heads, valves and controllers, and then he looks at the difficulty of the job and the amount of time it will take to perform it. An average job of his 80 percent residential and 20 percent commercial client base costs between $2,500 and $3,200. “Some companies have a minimum job price, but that’s not how we do it,” Hornung says.
 
Since incorporating the service, Hornung shoots for a 10 to 15 percent net profit each year, and some years fair better than others for a variety of reasons. The first few years of business hit the higher end of that goal because of the housing boom of early 2000, he says. But Missouri’s housing market has declined in the past few years and use of his installation services has since slowed down. “If the economy is poor, our maintenance sales stay relatively the same, but our installation sales drop,” Hornung says. “People will keep up their existing systems, but are reluctant to install new ones because they just don’t have money for the extra expense. It’s seen as a commodity rather than a necessity.”
 
Other economic factors such as the high price of gas have also contributed to the lull in irrigation installation. “Last year was really hot and dry, but the price of gas went up and people didn’t have the extra money for sprinkler systems,” he explains. “This year might come full circle as people receive their tax returns, the price of gas has gone down and people want to revive their lawns that died last year.”

INSTALLATION DOS. A do that Hornung has always done well is utilizing the support offered to him by irrigation manufacturers. Some irrigation system manufacturers offer beginner, intermediate and advanced training courses that can benefit all irrigation technicians regardless of how many years they’ve spent in the industry. “We pay for all of our staff to attend these sessions,” he says. “They’re great for helping newer people get up to speed and for helping veterans refocus and learn new techniques.”
 
Hornung’s employees are required to participate every year and take the courses relevant to their level of experience. First-year technicians attend an orientation and one or two introductory classes. Second-year employees attend more involved courses focusing on topics such as design or drip irrigation, and third and fourth year employees take the most advanced classes offered.
 
Based on their completion of the course, each attendee earns credit hours toward irrigation certification. “A lot of it is hands-on work and some of the courses can get very in depth,” he says.
 
Proper training is not something that can happen in a week’s time, Hornung says, and focusing on this aspect of his business can help decrease turnover by increasing employee confidence. “Irrigation installation is not necessarily an easy job, and the turnover of people who don’t understand what they’re doing is typically high,” he says. “A company shouldn’t offer a service if the owner doesn’t plan to properly train his employees. Failing to plan is planning to fail.”
 
Another area where Hornung’s company excels is in customer service, which he says can either make or break a landscape company. “The industry isn’t as professional as it could be in some areas, and it has a black eye for poor customer service,” he says. Hornung prides himself on being open and honest with his customers and treating them the way he would want to be treated. “If you answer your phone, customers are surprised. If you call them back, they’re wowed. And if you show up on time, they’ll work with you again,” he says. “If you want to be successful, those are three key things to start with and are three things we always make sure to do. It sounds so easy but that is where a lot of landscape companies fail.”
 
To promote his irrigation services, Hornung suggests first looking at how much work your company can handle. From there, decide if you can get adequate calls from your existing Yellow Pages ad or if you need to take additional steps. Early spring is the best time to promote irrigation services because people are getting anxious for a summer of enjoying their lawns, Hornung says.
 
Although he and his team are currently busy planning this year’s marketing strategies, the last 10 years of service will probably ease some of their hard work. “Customer referrals are the best form of advertising,” he says. “If your customers refer you, and you do good business and follow through, you'll have that customer for life.”