Water works

Water work can be lucrative when an irrigation division is well-equipped and staffed with experienced technicians. With bidding smarts and well-laid field plans to ensure smooth installation, and prevent maintenance down the road, contractors like Steven Allen, president, Allen Outdoor Solutions, St. Louis, see profits edge toward 20 percent for installation and up to 40 percent for service calls.

“Just like any construction job, if you’re not job costing, checking your pricing and constantly making changes to your bidding process, you won’t make it,” Allen says.

After 21 years in the field, Allen’s operation has come a long way from the startup he launched after deciding to leave his first job out of college – a sales position at an irrigation company. “I ended up really liking it, so I eventually started a company of my own,” he says.Gradually, Allen acquired labor-saving equipment like a trencher, and he slowly built a customer base by reigniting relationships with customers who knew him from his days knocking on doors.

Today, Allen Outdoor Solutions is a diversified full-service landscape firm, and the eight technicians in its robust irrigation division service 3,000 accounts. The key to running an efficient, profitable operation is two-fold, Allen says.
“The most important things are to make sure you’re overseeing the job and job-costing projects,” he says.

Danny Ross of Foliage Factory in Fort Worth, Texas, adds that an investment in the best equipment, parts and employees will pay off with time savings and, as a result, better profits. “If you have good guys who take pride in their work and install the job right the first time, you won’t have callbacks – (which) leads to bad PR and money out the door,” he says.

Profitable people
A job-costing rule of “thirds” works for Dean Hirsh, president, Turf Industries, Lake Zurich, Ill. He figures one-third of a job’s total cost is for materials, one-third is for labor and one-third is profit. “If you follow that trend, after a while you realize what you should be charging and that irrigation can be pretty profitable,” says Hirsh, adding, “And the faster you work, the more profit you make.”

Of course, the thirds rule only works if the materials and labor are high quality. Otherwise, you’ll take a slice out of the profit piece to pay for callbacks to unsatisfied customers. Hirsh says that job-site supervision is integral to ensuring productivity and profit. “If you don’t have a good foreman, to be honest, guys will take advantage of that situation,” he says.

Hirsh works to keep the best employees on board with fair pay and priority treatment. “We make sure they feel not just like they are employed, but like they are family,” he says. Essentially, that involves respecting technicians and asking foreman to do the same.

After all, those employees are an investment – one that costs about $1,500 to $2,000 in training if you figure in the cost of licensure classes and test fees, Allen says. In Missouri, technicians must be licensed through the Department of Natural Resources to test backflow preventers and system safety valves. “In the St. Louis County limits, you have to be called a ‘master sprinkler installer’ to turn in these (system) tests, and employees doing the testing have to be certified irrigation installers,” Allen says.

He says St. Louis County is working to elevate irrigation practitioners to the status of comparable tradespeople such as plumber or electrician. “The only way the (county) can police it at this point is through the testing,” Allen says, adding that up to two-thirds of so-called irrigation installers are not licensed.

The paperwork and class time might seem a hassle, but Allen says that having a competent crew of technicians keeps his operation flowing smoothly, profitably and ethically. “Mrs. Jones doesn’t want to see tattoos and earrings,” he says, adding that he hires employees who can wear the company logo without spoiling the business’ reputation – and that goes for attitude, too.

Meanwhile, Allen keeps maintenance crewmembers honest by not offering commission, so they only fix what’s broken on a job site. That way, employees don’t spend unnecessary time on a property, he says.

Starting an irrigation division from scratch? Hire on the subcontractors who have performed irrigation work for your company before like Ross did. Foliage Factory subcontracted irrigation services for about 25 years before creating its own division eight years ago. “We were doing all the work – sales, follow-up on jobs – and we weren’t making much money on it,” Ross says.

By bringing irrigation installation in-house, his crews work together and save time on a site. “Our subcontractors wouldn’t always clean up so well because they wanted to get in and out, so we would have to do their cleanup for them,” Ross says. “Now, our irrigators work with the landscape divisions that comes on to the job next and they help each other with grade work.”

Equipped for Efficiency
Allen’s trucks are “rolling warehouses” stocked with an array of materials: fittings, pipe, and other irrigation parts needed to complete a repair, plus the equipment to get the job done. “If a service tech gets on site and has to reschedule (because he doesn’t have the part), customers are unhappy and will go elsewhere,” Allen says.

“And if a technician is trying to please a customer and is driving back and forth to the shop all the time for parts, he won’t make the company any money,” he says.

Eight service trucks are assigned to crews, who keep them year-round.

Installation trucks are stocked differently and stay on site an entire day, so they are equipped for a specific job.

Hirsh orders a week’s worth of equipment at one time, and foremen are responsible for taking inventory in trucks every morning and restocking supplies as needed. He gives foremen authority to submit purchase orders at the parts distributor, so technicians can keep working on a job if they need a part in a pinch. “If we have to go back the next day to finish a job, that screws up our schedule,” he says, emphasizing why such a mundane task as stocking a truck can make or break an irrigation division’s productivity.

And speaking of broken, when equipment is down with no backup plan, that’s really a time killer. That’s why Ross has a backup truck, trailer, trencher and other key pieces of equipment. If this seems like too much capital to keep in-house, make a rental plan B, he suggests.

“Always have a backup plan – be ready,” Ross says. “You don’t want to have five guys out in the field twiddling their thumbs, waiting to get a trencher you could rent for $100 bucks to keep things going.”

Mastering the plan
Running a smooth operation in the field requires careful planning of installation jobs – detailed system designs, accompanying supplies lists, a game plan. Perfecting the process takes practice, Hirsh says. He started his irrigation division by offering the service to 20 or so clients, only charging them for parts. “We gave them labor for free and we practiced on them one full summer,” Hirsh says of the old days.

For companies new to the field, the best way to gain that experience is to bring on technicians or division managers with irrigation on their resumes.

This might include upgrading a scheduling and routing system to improve efficiency, like Allen did. A $6,000 investment in system that runs out of Microsoft Outlook replaces the hand-written schedules Allen Outdoor Services used several years ago. “Trying to hand-sort and hand-schedule and hand-route customers really cost the office and technicians a lot of misguided time driving to and from areas,” Allen says. “Drive time takes away the profitability of the service department.”

 Now, the computer system figures the best route. Routes are printed every morning and job tickets are handed to each crew. For service calls, Allen tries assigns crews to the same route because customers like to see familiar faces. In a round-about-way, this reduces callbacks and improves customer satisfaction. “We’re constantly trying to make sure we get the right match with technicians and customers,” he says.

A comment box on invoices left with each customer provides a space to sound off any complaints or compliments.

Ross has found over the years that worker pride, plain and simple, is the key to staving off customer callbacks and keeping clients happy. He prioritizes the three keys to profitability and success like this: proud workers, quality equipment and a backup plan.

“You need qualified personnel who want to work and are proud of the job – people who take care of equipment and properly maintain it,” he says. 
 
The author is a frequent contributor to Lawn & Landscape.