How city zoning laws helped McHale Landscape Design develop a profitable division.
When Kevin and Stephen McHale purchased a 25-acre farm in Upper Marlboro, Md., their intent was to turn the property into headquarters for McHale Landscape Design. But in 1985, the city zoning department had a different idea. “We learned quickly that they would allow us to grow plants, but not operate a contracting company,” says Kevin McHale, president. “That forced us into the situation where we had to do something with the farm.”
That something has evolved into a nice profit center for McHale Landscape Design. Indeed, the brothers decided to grow there, purchasing smaller material that they plant and nurture until it matures. By purchasing smaller plant stock, the firm saves money. It costs very little to care for a plant once in the ground. “We have garnered a pretty good profit center by doing this,” McHale says.
Today, the farm holds about $1 million in plant inventory at any given time.
Why purchase plants and hold them? For one, acting as the nursery gives McHale a competitive edge. “It keeps our costs lower,” McHale says, relating that especially in today’s price-driven economy, the ability to save a little on materials helps keep projects within clients’ budgets.
Taking this a step further, the brothers purchased equipment to make their own mulch from debris. And, the firm takes extra fill dirt from jobsites and makes its own topsoil. “This year, we will have enough topsoil so we won’t have to buy any the entire year,” McHale says.
The investment in machinery to make this possible was well worth it – and McHale crunched the numbers carefully. “We call it smart purchasing,” he says of the farm and its capacity to provide lower-cost materials to the landscape design business. “We think of inventory as ‘smart purchasing’ because we can buy it at a premium low price, and buying equipment that will turn our trash into usable recyclable material is a good ideal all around.”