Ever feel trapped? Like you’re stuck in the only industry you know, in the only job you’re any good at? Like you owe so much to the bank that you can’t get out from under it? Like you might not make payroll if it doesn’t stop raining?
Every year in our State of the Industry Report, we ask what contractors are most worried about. And every year, the top concerns are things like fuel costs, low-ball competitors and eroding margins. But last year, stress entered the top five.
Here’s what I think is happening: When the world ended five years ago, companies thinned out and cut the fat. Subsequently, owners took on more responsibility. As business has returned to some sense of normalcy and markets have improved, those owners – who went from doing their job, plus a little, to doing their job plus three others – have started to feel the effects. They’re cracking under the pressure.
This month, Phil Sarros has a great piece on burnout. We’ve written before about how to keep crews motivated through the heat of the summer, but this is different. Phil’s is a candid essay on what it’s like to run a landscape contracting business when you don’t want to do it anymore, but can’t stand the thought of leaving.
It’s a powerful piece that I think a lot of other contractors have written in their minds already.
You’re more than halfway through the year. From what I’ve been hearing, it’s been a good year in most markets. You want to take advantage of it, but remember that you’re not a machine. You need to recharge, refuel and relax. That might mean a vacation, that might mean hiring some people or it might just mean you take an afternoon off and go to the zoo with your kids. Whatever it is, you need a break.
Last month I was driving to a meeting with Alan White, who owns Turf Systems in Ontario, and we got to talking about the industry. He said the main thing that’s helped him improve and grow is networking with other business owners – inside the green industry and out. He’s realized that a lot of the problems he’s going through aren’t much different from other owners’ problems.
“You’re not on an island,” he told me. “When you isolate, you get in trouble.”
We’re running Phil’s piece to give a signal boost to the idea that no matter what you’re doing or going through, you’re not on an island. You are not alone.
Volunteers helped design plans and renovate a homeless shelter in Colorado.
Plans for the less fortunate
A landscape designer helped rennovate a homeless shelter in Colorado
DENVER – In June, the AEC Cares group renovated the Beacon Place, a homeless shelter in Colorado.
AEC Care is a group led by Reed Construction Data, Hanley Wood, and the American Institute of Architects that links architecture and construction with their respective communities. Every year, the group renovates an area in the community as a way of giving back.
While the workers doing the manual labor play an important role, there are a lot of people behind the scenes who put in a lot of hours. Lawn & Landscape spoke with Jesse Young, founder of LandWise Landscape Architecture, who was part of the design team that drew up the plans for the project.
What kind of work did you do for the Beacon Place Homeless Shelter?
My design/build company, we are landscape architects as well as contractors, LandWise, provided all of the design drawings for the project, and managed the construction of the landscape renovation as well as the physical installation. We worked closely with a retired contractor, Duane Keesen, who provided a large portion of the construction as well.
Why did you get involved with this project?
From the beginning I have maintained a vision for the company to be a top notch design/build company that contributes a well-above-average amount of resources and volunteer time back to not only our local Denver community, but also on an international level. I feel at this point in time, it is not enough to solely aim to be just an economically successful business. As a company policy, I sponsor each one of my full-time employees one full day of volunteering per season. As LandWise grows, I hope to be able to sponsor even more.
How long did your volunteer work take?
For the Beacon House project, we have been working steadily since early March. The design process has been very unique as we have re-designed and revised constantly throughout the process in order to respond and adapt to weekly, sometimes daily, changes in material donations, labor provisions and budget constraints.
Young also volunteered in Nepal
What are a few other charity/volunteer projects that you have participated in?
During the winter months we close our doors for business. Last winter, I took two separate trips to Nepal where I spearheaded a volunteer building project for a women’s shelter on a working farm in rural Nepal. On the first trip I went alone and worked with the local villagers to lay out the building site and construct the foundation courses for four buildings to be built using sustainable earth-bag construction techniques.
On the second trip in March, I returned to the same village with two fellow construction professionals from Denver and we managed 30 Canadian high school volunteers who assisted in the construction of the walls of the buildings. It was an education experience for us all and resulted in a lot of production, and the shelter buildings are now complete. I intend to sponsor various Nepal projects in the future through LandWise as well.
Photos taken by Sam Sith, courtesy of Reed Construction; Nepal photo courtesy of jesse young
Supreme Court turns down E15 challenge
WASHINGTON – The U.S. Supreme Court quietly rejected a challenge from automakers and small engine groups related to the sale of E15 fuel in June. The decision means a lower court ruling allowing the sale of the fuel stands, which paves the way for further expansion of the fuel.
E15 is a mix of 15 percent ethanol and 85 percent gasoline. It is an attempt to meet the Renewable Fuel Standard, a mandate that ethanol, advanced biofuels and cellulosic fuels be blended into gasoline at certain levels by goal years, that was created under the Energy Policy Act in 2005.
E15 is not approved for use in outdoor power equipment or auto engines built before 2001. Studies have shown that the higher levels of ethanol damage fuel lines and fuel pumps, and can cause engine failure.
For contractors in the field, though, this week’s ruling means more ethanol in the fuel supply sooner. “We’re deeply disappointed in the decision,” says Kris Kiser, executive director at OPEI.
Now, he added, “it all gets real.” He predicts ethanol will be incentivized to increase sales, retailers will expand the reach of blender pumps outside of the Corn Belt and, ultimately, there will be lawsuits over engine failures. “I don’t think anybody’s going to roll over on this,” he says.
E15 and the RFS pit powerful groups against each other – automakers, oil companies and the agriculture lobby all have a vested interest in where the legislation goes.
The next move for OPEI and other groups, Kiser says, is to lobby Congress to revamp or revoke the Renewable Fuels Standard. “Everybody knows there’s a problem, but nobody knows what the fix is,” Kiser says. “It’s a huge challenge.”
At the GIE+EXPO in October, OPEI will roll out a campaign to educate contractors, dealers and consumers about the dangers of E15 and how they can prevent engine damage, Kiser says. – Chuck Bowen
The Sweepstakes Award for best design and build construction was given to Falling Waters Landscape of Encinitas for the One 19 Living Studio in Cardiff by the Sea . Charles White, MTEK Studios
California landscapers honored
SAN DIEGO – The San Diego chapter of the California Landscape Contractors Association (CLCA) honored 19 local landscape contractors with 2013 Beautification Awards for excellence in landscape installation and maintenance. Thirty-nine awards were presented in 26 categories culled from 65 entries, which encompassed categories covering residential and commercial landscape construction, maintenance and renovation, along with water features, outdoor lighting and water-saving California-friendly landscaping.
The three top awards are: Sweepstakes Award for best design and build construction to Falling Waters Landscape of Encinitas for the One 19 Living Studio in Cardiff by the Sea; President’s Award for best landscape renovation to Allen Landscape of Oceanside for Casa Sana in La Jolla; and the Judges’ Award for residential maintenance to Torrey Pines Landscape Co., of San Diego for its work at the Santoro Residence in Rancho Santa Fe.
Multiple award winners included: The Brickman Group of San Diego, and Torrey Pines Landscape Co., of San Diego, both with five awards; Allen Landscape of Oceanside and Backyard Vacations of Carlsbad, with two awards a piece.
Enchanted Landscapes of Rancho Santa Fe, Schnetz Landscape of Escondido, Columbine Landscape of Escondido, Summit Services of San Diego, Mark Schroeder & Co. of San Diego, Falling Waters Landscape of Encinitas, Heaviland Enterprises of Vista and Ciro’s Landscaping of Escondido, each won two awards.
Other companies receiving a single award included: Benchmark Landscape Services of Poway, Heritage Landscape Services of La Mesa, Nature Designs of Vista, New Way Landscape and Tree Service of San Diego, R.B. Prange of Encinitas, Silver Moon Lighting of San Diego and Waterscape Creations of Fallbrook.
A first place winner and second place achievement award were presented, although not all categories warranted both types of awards. For a complete list of categories and recipients, visit bit.ly/llsandiego.
OPEI announces new officers and directors
ALEXANDRIA, Va. – The Outdoor Power Equipment Institute (OPEI) announced its 2013-2014 Officers and Board of Directors, which was unveiled during the OPEI Annual Meeting in Williamsburg, Va., in June.
Officers for the 2013-2014 year include: OPEI Chairman Todd Teske, chairman, president and CEO, Briggs & Stratton Corp.; OPEI Vice Chair Paul Mullet, president, Excel Industries; and OPEI Secretary/Treasurer Lee Sowell, President – Outdoor Products, Techtronic Industries, N.A.
“OPEI is entering this new fiscal year stronger than ever, both organizationally and financially,” said Kris Kiser, president and CEO of OPEI. “The OPEI Board reflects the impressive scope and breadth of our membership. Our membership is at a record high, representing small engine manufacturers with a range of power sources, utility vehicle manufacturers, and a myriad of small engine equipment manufacturers and suppliers serving a broad range of industries and uses.”
“OPEI’s long history and strong membership put us in a unique position to make sure we are bringing good quality high value products to the marketplace,” Teske said.
Continuing their service on the OPEI Board are: Immediate Past Chairman, Daniel Ariens, president & CEO, Ariens Co.; Marc Dufour, president, Club Car; Peter Hampton, president, Active Exhaust Corp.; Jean Hlay, president and COO, MTD Products; Steven Bly, executive vice president, Echo; Ed Cohen, vice president, Government & Industry Relations, Honda North America; Michael Hoffman, chairman, CEO, The Toro Co.; Tim Merrett, vice president, AT&T Global Platform Turf & Utility, Deere & Company; and Fred Whyte, president, STIHL.
New to the board this year are Tom Cromwell, president, Kohler Engines, Kohler Co. and John Cunningham, president, Consumer Products Group, Stanley Black & Decker.
Ruppert names new president
LAYTONSVILLE, Md. – Phil Key was promoted to company president of Ruppert Landscape.
“Appointing Phil to the position of president was the right move for our organization, said Craig Ruppert, founder and chief executive of the company. “He has been integrally involved with the planning, execution and success of the business over the past five years in his role as vice president of the landscape management division. He is widely respected within the industry and within our organization at all levels, where he’s demonstrated a strong ability to listen, motivate and build consensus. His business acumen, strategic thinking ability and strong leadership will help guide our organization to the next level of its development. I’m confident Phil has a firm grasp of our culture and values and will capably impart and strengthen those values as our company continues to evolve.”
Key will focus on and manage the overall operations of the company as it seeks to expand both its landscape construction and landscape management operations. Key is replacing outgoing president, Chris Davitt, who will be retiring at the end of 2013. Craig Ruppert will continue to serve as CEO, assisting in the strategic planning process and working with Key to ensure that customer service and employee development goals are achieved.
“After a thorough search, both internally and externally, we are fortunate and proud to be able to fulfill our company’s mission and promote Phil from within the company,” said Ruppert. “Chris has done an excellent job of preparing Phil for his new role and will assist Phil and our organization as an advisor through 2014.”
Key holds a bachelor’s degree in business from Western Maryland (now McDaniel) College and has been with the company for more than 15 years. He began his career as an intern in 1991 and worked his way through the ranks serving in virtually every position within the landscape management division up to and including branch manager and division vice president. He lives on Miller’s Island with his wife, Erika, and their three children.
Oregon restricts use of certain dinotefuran pesticides
SALEM, Ore. – The Oregon Department of Agriculture is restricting the use of 18 pesticide products containing the active ingredient dinotefuran while it continues the investigation of a large kill of bumblebees in Wilsonville and Hillsboro this month.
The ODA restriction focuses on ornamental, turf, and agricultural pesticide products that are used by both professional applicators and homeowners. Products with the active ingredient dinotefuran registered in Oregon for other uses, such as flea and tick control on pets or home ant and roach control, are not affected by the restriction. ODA’s concern is focused on those uses that may impact pollinators.
By statute, ODA has legal authority to establish limitations and procedures deemed necessary and proper for the protection of bees and other pollinating insects. The temporary rule, which goes into effect immediately, will be enforced for 180 days, by which time ODA is expected to complete its pesticide use investigations of the Wilsonville and Hillsboro incidents. Those investigations will determine if the pesticide applications were in violation of state and federal pesticide regulations, and will assist ODA in addressing any potential future actions. For more information visit bit.ly/llodapest.
Source: Oregon Department of Agriculture
Ferrandino & Son finds new VP of sales and marketing
FARMINGDALE, NY: Ferrandino & Son has hired Ryan Sklar as vice president of sales and marketing. Sklar brings a broad range of relative experience to Ferrandino & Son, including senior sales executive positions at Nautica and Tommy Hilfiger, and nine years as the vice president of operations at Capital Contractors, where he assisted with the operations and sale of many Fortune 100 companies in retail, healthcare, fitness, banking, technology, transportation and restaurants.
“As vice president of sales and marketing, Ryan will be crucial to our continued growth across our core services,” said owner and CEO Peter Ferrandino.
“Ryan’s background in consolidated, sustainable solutions will provide our business development team with the direction and leadership necessary to continue our exponential growth within our industry.”
Bobcat renovates Bismarck production facility
BISMARCK, N.D. – Bobcat Co. completed a $6.5 million renovation at its Bismarck, N.D., production facility. The Bobcat compact attachment production moved to Bismarck as part of an operations expansion last year.
It also provides a more collaborative environment for non-production positions, the company stated in a press release. Other factory operations include engine assembly; kitting and sub-assembly; parts control; warehousing; and some compact loader assembly. Future plans include phasing in Bobcat Tier 4 engine assembly.
The facility has 350,000 square feet of floor space and an additional 36,000 square feet of office space.
Non-production Bobcat jobs in Bismarck include engineering, aftermarket parts and service, finance, logistics, information technology, sourcing and human resources.
EP Henry provided paving stones for the walkways around the statue of liberty.
Hardscape manufacturer helps with Statue of Liberty project
NEW YORK – EP Henry, a Woodbury-based manufacturer of Hardscaping products, was selected to provide the more than 50,000 square feet of paving stones for the walkways surrounding the Statue of Liberty and the park. The statue reopened on July 4 after repairs from Hurricane Sandy were made.
“We’re proud to be part of such a meaningful project,” said J.C. Henry III, CEO of EP Henry. “As an American company with more than 100 years of history and New Jersey roots, we understand the impact that Sandy has had on our region. We are honored to have the opportunity to be involved with the restoration of such an important and iconic landmark.”
The Statue of Liberty restoration project is also the first customer for EP Henry’s new Hardscaping Center at Roxbury, N.J., which opened in May 2013. The center is the first of its kind for EP Henry, whose products are otherwise sold through a network of independently owned distributors in other markets throughout the company’s Mid-Atlantic service area.
John Deere introduces Flex Fuel Ztrak commercial mower for landscape contractors
CARY, N.C. – John Deere is expanding its line of ZTrak mowers by adding a Flex Fuel model to its fleet. The new Z925M Flex Fuel is compatible with ethanol blends up to E85, giving contractors a new alternative fuel option for their fleets.
“When we introduced the new line of ZTrak mowers last year, our intent was to meet the needs of every customer,” said Steve Wilhelmi, John Deere tactical marketing manager.
“The new Z925M Flex Fuel model continues that mission by appealing to customers who need or prefer to run on alternative-fuel platforms.”
The new Flex Fuel model is part of the M Series of ZTrak commercial mowers. With a 24.6 hp electronic fuel injected engine, the Z925M Flex Fuel can run on any blend of ethanol-mixed fuel, up to E85, and it has a top speed of 10 mph.
Offered in 54- and 60-inch widths, it comes equipped with a 7-Iron deck, for maximum durability.
The new model offers the option of an isolation seat or a fully-adjustable, suspension seat. Like the rest of the ZTrak lineup, the new Z925M Flex Fuel is an eligible purchase within the GreenFleet Loyalty Rewards program. L&L
A Washington D.C.-area landscaping company discovers the benefits of producing its own mulch and topsoil onsite.
Topsoil is vital for everyday operations at Denchfield Landscaping, a full-service design/build, and maintenance company in Hyattsville, Md. In the past, even by stockpiling soil between jobs and working with multiple vendors, the company would run out when it was most needed.
Yet, as the topsoil supply kept dwindling, the nearby pile of dirt removed from excavation jobs kept growing – resulting in what came to be known as Mount Denchfield, a 40- to 50-foot-tall pile of rocks and soil in the company yard. “That mountain would have been expensive to pay someone to get rid of – probably $20,000 to $30,000 to truck out,” says owner Kurt Denchfield.
When Denchfield Landscaping landed a contract that required about 3,000 yards of topsoil, they knew it was going to be a hassle to get that much soil. So Kurt’s son, Taylor, started researching options for turning Mount Denchfield into quality, usable topsoil.
Once the Denchfields found and purchased the right soil screening machine for their needs, they were in business.
“It’s fantastic,” Kurt says. “All of our field dirt we’d otherwise have to pay to truck out we now turn into topsoil and send back out to our jobsite or to our garden center.”
Visit bit.ly/lltopsoil to read the rest of this online only article.
Get your goggles ready
Our July issue was fantastic in print, but it’s even better on our new L&L app. It was the first issue we’ve dedicated entirely to water issues, and the new app makes it a lot splashier than the paper copy. The interactive cover will blow your mind, and all the extras will leave you feeling like you just came out of the pool. And as a reminder, this is different from our old, digital flipbook app, so if you subscribed to our old app, you’ll need to download our new version again. So, grab a swimsuit and a towel, and download the app today at bit.ly/lawnandlandscapeapp for your iPhone or iPad.
Social media, water conservation and ready-made customers
We’ve added more podcasts to our Lawn Care Radio Network. You can subscribe through iTunes by visiting bit.ly/lcrnitunes or listen to them on our redesigned multimedia site lawnandlandscape.com/media.
The Marketing Fix:
Staying social Posting to Facebook and Twitter is important, but can get away from you during the busy season. Chris Heiler explains how to keep up your social media marketing, and still complete your jobs on time. bit.ly/llsocial
Down below the soil
Alex Duffy from Aquatrols gives the facts on how wetting agents penetrate the soil and what you should expect from such a product. bit.ly/lldownbelow
Randy Glotfelty talks about www lastminutelawncare.com, a website designed so consumers can find a contractor when they need a quick mow. Glotfelty tells us where the idea came from and how the site works. bit.ly/llemergency
Ash trees flourishing in West Side Cleveland neighborhood with the help of Arborjet. bit.ly/llashtree
A coffee shop in England can show you a better way to do business. bit.ly/llcoffee
Landscaping to boost curb appeal
Does your job really help when selling a home? bit.ly/llcurbappeal
U.S. Monthly Consumer hits 5-year high
Upper-income and lower-income Americans’ spending increased in May. bit.ly/llspending
National Interiorscape Network charter member dies
John Minutaglio lost his battle with cancer at 63. bit.ly/llninmember
Two contractors in the Midwest were using an estimating system that included all of their equipment and vehicle costs in general and administrative (G&A) overhead. As a result, they were not being competitive with their commercial bidding – especially labor-intense jobs. Another contractor on the West Coast, asked me, “Why can’t I just put all of my equipment (and vehicle) costs in my G&A overhead costs and bid them into my jobs that way?” A $5 million contractor in New England, on the verge of going broke, hired me to help him figure out what his problem was. He told me, “I’ve been in business 27 years and I’ve never made more than 2-3 percent net profit on the bottom line. The more sales I do, the less money I make.” As it turned out, his problem was the method by which he included equipment costs in his bids.
As I travel around the country, this is one of the most common bidding mistakes that I see. Unfortunately, for the contractor in New England, it was too late by the time that I arrived. He was at the end of his landscaping career and unwilling to make the necessary adjustments to correct the flaws in his estimating system. If experience is the best teacher, here’s what we should learn from this contractor’s mistakes.
It was inevitable that our Boston contractor would continue to see his margins erode. I say inevitable because he had a fatal flaw in his estimating methods.. The sad part of this story is that a consultant taught him to bid this way. For our purposes, we’ll refer to this contractor as Ben Hadd because he definitely had been had, and for a lot of money.
* This figure includes: depreciation, fuel, repairs, insurance, mechanics’ pay, etc.
Once calculated, the estimators would add G&A overhead to the bid at $12.50 for each field labor hour, similar to how they calculated equipment costs. Adding G&A costs to your TDC gives you your break-even point (BEP). A net profit margin would then be added to the BEP to arrive at a final price for the project. Let’s zero in on two specific bids to illustrate the mathematical problem with Ben’s estimating system.
Here’s the fatal flaw caused by averaging equipment costs into a bid.
Equipment costs included in the bid: 1,000 hours x $10.00 = $10,000
Specific costs for equipment used: Pickup truck and trailer: 33 days x 10 hours per day x $12.00 CPH = -$ 3,960
Estimated costs are too high by………………………………………………….. $ 6,040
Equipment costs included in the bid: 1,000 hours x $10.00 = $10,000
Specific costs for equipment used:
Pickup truck and trailer: 33 days x 10 hours per day x $12.00 CPH = $ 3,960
Skid steer : 33 days x 6 hours per day x $25.00 CPH = $ 4,950
Pickup truck and trailer: 33 days x 6 hours per day x $35.00 CPH = $ 6,930
Total costs - $15,840
Estimated costs are too low by…………………………………………………….- $ 5,840
Ben’s estimating system was designed so that, in his competitive market, he would only get the work that he luckily priced correctly or that he under-priced. Put another way, he could not be competitive on labor-intense jobs because he erroneously included too much cost for equipment in them. Unfortunately, he was very competitive on equipment-intense jobs because he would charge too little for the equipment that he used on them. The problem with averaging a direct cost is that the market will always exploit this error. If your averaging overstates a cost, the market will tell you to get lost. However, if you understate a cost, the market will buy, buy, buy!
Unfortunately, Ben was unwilling to make the necessary changes to his estimating system. However, the two mid-western contractors and the one in California did change. Their bidding accuracy and bottom line improved significantly. It’s also not too late for you or anyone else who includes equipment costs in G&A overhead costs for bidding purposes. To the adage, “Experience is the best teacher” should be added, “Preferably someone else’s.”
For a free copy of my equipment cost per hour (CPH) calculator in MS Excel, email me and I will email it to you.
JIM HUSTON runs J.R. Huston Consulting, a green industry consulting firm. See www.jrhuston.biz; mail firstname.lastname@example.org.
Catron at company headquarters in Maryland
While in college I had to take a personality profile exam that supposedly would give me direction in my life pursuits. There were two very clear areas I was advised to stay away from: agriculture and business.
I was recruited by ChemLawn to help open up their East Coast expansion in 1976. At the time, I know it’s hard to believe, but I had fairly long hair, it was almost down to my shoulders, and I had full beard. I was a very conservative hippie.
Gary Seitz was interviewing me and said, “Our operation here is short hair, no beard.” And I told him, “You guys are more interested in the pretty face, not what someone can bring to the table.”
So I went back home and told my wife and my very good friend, who is one of our franchise owners now, the story, and both of them said, “What are you, stupid? You can grow your hair back. This sounds like an opportunity of a lifetime.”
ChemLawn taught me a lot about business and myself. They gave the regional offices so much autonomy. We were 26-years-old and we’re handling millions of dollars of business with no formal training. You learned the business from the ground up: What does a truck produce and how does payroll impact that?
When I got the job I was living in New Jersey and my wife was pregnant, and the plan was that I would move down to Maryland and when the baby was born, I’d move him and Debbie down. Well, as fate would have it, our son was born with spina bifida.
He was paralyzed from the neck down and had severe brain damage. So I called up Gary and said, “Gary, I’m not sure when I can move down. Here’s the situation.” He said, “Well, OK. Do you have insurance for that?” I did, but it didn’t cover this.
So he called me back 20 minutes later. He says, “Look, I just spoke with Dick Duke. We’ll pay all your medical bills and I’ll put you on salary as of today. You move down whenever you can.”
Now I hadn’t worked for him even a day. They didn’t really know who I was, what I was gonna do. I make no bones about it: We eagerly took that philosophy to NaturaLawn.
I had designed what would become NaturaLawn in 1978. I brought Beecher Smith in as a partner. We worked at ChemLawn together. We were a very good team and, quite frankly, it wouldn’t have been as successful had I even attempted to do it individually. We were Cheech and Chong, Laurel and Hardy.
Beecher was a man I trusted with my life, my wife and my wallet. When I would freak out, he would calm the waters.
We missed our first-year projections literally by half, but we were actually profitable our very first year: We made $9,000.
Once I was contemplating a serious business issue early on in our history. The timing on what we needed to do was critical. One of our employees, an original member of NaturaLawn and a lady who is as kind as anyone I have ever known, spoke up and said, “Well, I think we should ….”
I cut her off at the knees at that point and said, “Kelly, I really don’t care what you think, we need to ….”
It was at that moment as I looked into her face and saw the deep hurt my comment had made.
Concentrate on the single most important aspect of your business: your people. If you take care of your employees first, they will in turn take care of your customers. Then your customers will take care of your business by buying your services and ensure your profitability. L&L