It’s music to contractors’ ears. That frozen, depressed residential design/build market that killed, or at least wounded, a lot of companies is thawing, opening up new opportunities.
“I think that the economy is picking up slowly, and I think there’s the possibility that some companies that weren’t top quality fell by wayside and couldn’t make it through the downtime,” says Shannon Hathaway, president of Green Heron Landscaping in Cary, N.C.
Recent surveys point to an increased focus from homeowners on outdoor living spaces. (See “Survey says” below.)
Maverick Pickering, owner of Maverick Landscaping in Kansas City, Kan., has seen the same thing in his area – companies that didn’t position themselves in the downturn are now out of business, leaving more work for the owners that had their acts together. Pickering is on pace this year to reach more than $600,000 in revenue, numbers he hasn’t seen since 2008. On top of that, he’s increased his profitability by taking on bigger, more expensive projects.
“The number of projects we are doing is way down but the cost per project is way up, like astronomically up,” he says.
What they’re buying. Hathaway says her company has experienced its best first quarter in its 11-year history with revenue up about 30 percent from last year and 15 percent more from the company’s previous best first quarter. Hathaway has recently hired two employees, bringing the total to six, and she will buy a new truck this year, as well.
Both Pickering and Hathaway said they credit some of the increased outdoor living spending on a trend that has been going on for a couple years – families not traveling, and instead staying home. Hathaway said customers are interested in firepits and modernizing their patios, but also simplifying them at the same time.
“It’s less about impressing the neighbors and more about enjoying yourself with your friends and family,” she says.
Pickering has seen many new homes in his market add beautiful outdoor spaces.
“There’s more talk about big projects from all the contractors, even the ones that do the cheaper work,” he says. “People want to blow the back out, they’re not travelling, they want to reinvest in the house, and a lot want to entertain outdoors.”
But he also warns that a lot of builders who were doing new homes have moved on from that market and have jumped into outdoor living.
“And they are cutting every corner in the whole world and they are ruining the market,” he says.
Pickering combats this by educating clients that corners cut on a patio project will save money now, but will cost more in repairs in the future.
“(Concrete countertops) will do exactly what your sidewalk is doing,” he says. “It’s going to start chipping, it’s going to fade, and it’s going to crack.”
The right client. As the market gets better, you can now be more selective on who you choose as a customer.
Pickering, whose average project costs $50-75,000, says he’ll only do higher-end work, and won’t do concrete countertops or fake stone, instead only using natural stone. That limits his jobs, but allows him to focus on big projects like the $350,000 job he worked on in the spring.
Pickering now asks more questions on the phone before visiting a client. He wants to make sure they are willing to stick to his more expensive work.
He also charges a consulting fee of $75 for an hour for anyone he does meet in person. Pickering found he was getting worn out by meeting with potential clients that didn’t wind up buying.
“I was constantly disappointed when I left because I had given them great ideas and they hadn’t paid for them and I left with nothing,” he says. “The premium client fully expects to pay for a consultation. How can you be professional if you don’t charge for your time?”
Hathaway, who average cost per project is $9,000 and posted revenue of $450,000 last year, says she has been booking jobs 8-10 weeks out, which means referring customers who want work done fast to competititors.
“I know that I may lose a client here and there by sending them to a smaller company, but maintaining the highest quality standard is of utmost importance to us,” she says.
Hathaway says contractors have to be careful in an improving economy because the new work can be very enticing. Before you know it, she says, you’ve hired too many people, and bought too much equipment, and you’re stuck because work has stalled again.
Her philosophy is to wait for her foreman to tell her that they need one more guy to do the job on time. The loads of new leads can also tempt contractors to promise customers the world, which will also get them in trouble.
“Don’t overcommit yourself,” she says. “Be honest with your clients on when you can get to them. Concentrate on quality, not quantity. If you are trying to knock out as many jobs as you possibly can, the quality is going to suffer.”
Survey says: Consumers still want outdoor spaces
According to a recent survey conducted by the American Society of Landscape Architects, consumer’s love affair with the backyard is increasing.
Landscape architects with a specialization in residential design across the country were asked to rate the expected popularity of a variety of residential outdoor design elements. The category of gardens and landscape spaces, with 94.9 percent rating somewhat or very popular, was followed closely by outdoor livings spaces at 91.5 percent, which were defined as kitchen and entertainment spaces.
Across all categories, 97.4 percent of respondents rated grills as somewhat or very in-demand for 2012, followed by low-maintenance landscapes (96.6 percent), fireplaces/fire pits (95.8 percent), and dining areas (95.7 percent). Lighting features remained a popular choice from 2011 at 93.1 percent.
Americans also love their pools (79.2 percent), but not quite as much as their spas (80.4 percent) and other decorative water elements (89.9 percent), such as waterfalls or bubblers.
Photos: Maverick Landscaping