Landscape firms in the business of building dream backyards have been slapped with a reality check in the last couple of years. While clients are “vacationing” at home and outfitting their properties to provide a getaway experience, often their budgets for these accommodations are more economy-hotel than luxury-villa. There are always exceptions, but generally speaking, Mark Borst has also watched the price tags on his award-winning design/build projects drop over the years.
That doesn’t mean that profit is suffering, though. Borst still expects an average of 15 percent on each job. And he is still producing the highest-quality work, garnering recognition from PLANET as a 2010 industry Trailblazer for his longevity and success in the hardscape and landscape arenas.
The key to maintaining steady, strong business at Borst Landscape & Design, Allendale, N.J., is three-fold: delivering outstanding customer care; focusing on strengths (and subcontracting the rest) and managing projects so the end result is always high-quality.
As a result, Borst Landscape & Design has garnered numerous landscape design awards and, in a challenging economy, continues to attract a healthy mix of design/build clients that sustain the 18-year old operation.
“I have a lot of competition that is dropping prices and doing work at cost to keep their guys busy – I’m proud to say we haven’t done that, nor do we plan to,” Borst says, adding that having the right people on board is another differentiator. Because in design/build, “you have to do a tremendous amount of talking with that client,” Borst says. “Once you sell that job, your job is not over.”
Borst has learned a few key lessons in his career since starting the business in 1993 during college as a maintenance firm, growing it into a business that was 70 percent design/build in 2002, and today, continuing to cultivate maintenance to fill in revenue gaps in a slower construction division. Here, he shares what keeps his high-end clientele happy and his bottom line solid after all these years.
Maintaining a balance
When Borst founded his business as a landscape architect student at Rutgers University in New Jersey, he was like most start-ups with a tough work ethic and hands-on nature. His business was all mowing, all the time – until 1999 when he graduated and decided to take on smaller design/build projects for his clients.
“The business started out as a mowing company and evolved into about a 50-50 mix of design/build and maintenance type services,” Borst says, relating how that service split has ebbed and flowed over time. Today, the business is about 45 percent design/build and 55 percent maintenance.
In the mid-2000s, Borst recognized he better even out his robust design/build department. Then, it was bringing in about $3.5 million of the company’s $7 million in revenues. “We were selling design/build like crazy and we realized at some point, this was going to come to an end,” Borst says pragmatically. “And looking at trends in the industry, anytime there was a big boom it was followed by a lower-lying time of not doing much design/build. We realized we had to focus on the maintenance to be sure we had our bases covered.”
Gradually, Borst tipped the service scale toward maintenance. In 2009, the company did about $2 million in design/build and in 2010, revenues in this division were about $1.9 million of the company’s total $6 million. Borst says maintenance is “keeping the business alive."
But design/build is going strong, and the firm is known for its stunning projects. Borst describes a backyard resort the company created for a client involving a pool and outdoor kitchen. The project involved challenging elevations, a system of retaining walls, a patio with interlocking marble floor, a full bar area and three outdoor “rooms.” The three-quarter million dollar project is a sampling of what Borst Landscape & Design can produce – and Borst is proud. “Creating those backyard spaces is something we are very good at – and we enjoy doing it,” he says.
Though there’s less of the big stuff, every design/build project Borst takes on earns an average profit of 15 percent. “Design/build is definitely more profitable than maintenance – we have better margins, but we also have more risk,” he says.
More risk, because there’s more cost in materials, more coordination of crews, more expectations from clients – more of everything. “When we get a $100,000 to $200,000 job, I’m watching that like a hawk,” Borst says of labor and expenses.
Design/build projects are a sort of dance involving careful coordination of these two key aspects – labor and materials. Borst Landscape & Design’s process of transitioning a project from sales to production is seamless, which lessens risk and ensures happy clients.
The sales team consists of designers who focus heavily on customer attention. “Especially on the east coast in New Jersey, design/build requires a tremendous amount of client care,” Borst says. “You have to be the right people or a project could be a disaster. If you have a gruff person in charge of the client, it will end up backfiring because you won’t have that good client care.”
Clients are tended to daily after a project is sold so they know what’s next in the process.
And that is, essentially, production. Designer-sales leads turn projects over to the production department, which handles purchasing, coordinates materials orders so they arrive on the job site on time and works foremen on the projects. “The organizational side of this process is key,” Borst says.
Focusing on strengths
Borst Landscape & Design acts as a general contractor for the outside of the home. Crews do most of the work, but there are some components on a job that Borst won’t touch, namely irrigation and lighting. “I’ve learned my limitations and what we’re good at,” Borst says. “We are good at doing hardscape and interlocking pavers, bluestone work, drainage – and the irrigation is stuff I don’t want to get my guys caught up in, nor do I want to start another division.”
So Borst will coordinate irrigation jobs, but his crews don’t perform the work. “I surround myself with good contractors,” he says. “We have our liaisons.”
For instance, Borst Landscape & Design will sub out an asphalt driveway or hire a mason to build a sophisticated barbecue. But foreman, and ultimately Borst, will oversee that work. “We realized we can’t be all things to all people,” Borst says.
That said, Borst doesn’t like to say “no” to any landscape design project. “We do everything that comes in our door,” he says. That means taking on $10,000 planting jobs and near-million dollar outdoor rooms. The company can manage this variety by directing smaller-scale projects to maintenance enhancement crews.
Unlike several years ago when Borst ran about eight or nine crews that specialized (planting, hardscape, masonry), today most crews multi-task because jobs are smaller. “Typically for a small job, we’ll assign one crew to do all the work,” Borst says.
Large six-figure jobs that can “go south so fast” if not managed carefully are reviewed weekly to determine how the budget is holding up. “It might be as simple as asking (the production department), ‘How far along are you with this job? Are you 50 percent done? How many hours have you used so far?’” Borst says.
This constant review of projects protects Borst’s profit margin and project integrity – the ultimate reason the company continues to operate a thriving design/build department. “We have a lot of competitors in our area, and we have some that are very good and others that are not,” Borst says. “I’ve always prided myself on making sure we are doing quality work and not cutting corners at all. We only produce products I want to put our name on.”
So hiring the very best people for those jobs only makes sense. “What we’ve learned,” Borst says of subcontracting, “is that we are good at coordinating jobs, but we don’t necessarily have to be doing the whole job.”
A fast way to burn a client relationship is to make design changes without written orders. In New Jersey and many other states, there is actually consumer fraud legislature requiring customer approval and signature.
“This has really been tested in the courts,” Borst says, noting that while he hasn’t been accused in court of neglecting to process change orders and get customers to sign off on those, other firms have suffered consequences.
Borst has learned the hard way by losing money on jobs. “We have done extra work not written in documents and had clients say, ‘We’re not paying for that because you don’t have documentation,’” he says. “We are guilty as much as the client. There were times, looking back, when the client deliberately had all intentions of not paying for the work when he said yes. And there were times when it was just as much our fault because we weren’t clear that the work was going to cost extra.”
Every change, every material, every design amendment is put on paper and presented to clients for a signature before any work is performed. “We do a change order right on site if necessary and we assign a price to each (extra),” Borst says.
A policy of equal importance centers on the type of work Borst will not do, no matter if a client requests it. And that can be summed up as any project request for mediocre work. (And, yes, some people actually do request this.) “We’ve had people ask us to cut corners, and we’ve walked away from projects because of that,” Borst says. For instance, a client fixing up a house to sell wanted a simple walkway and asked that Borst not use as much gravel base to lower the expense. “I wouldn’t do it. What if he sold the house and someone found out I did the walkway and it failed in a year? I could have made money on that, but I don’t feel like it’s worth putting my name on it to earn those dollars.”
Integrity and exceptional customer service are unspoken bylaws at Borst’s firm. And after nearly two decades of operating with high standards, Borst says he continues to gain new business because the firm continues to meet the high expectations clients set.
Every backyard dream is treated with attention to detail and personal care.
“We have creative people on staff,” Borst says. “They come up with ideas and portray them in designs that people get excited about.”
This is one of three stories that ran in Lawn & Landscape's Business Builder e-newsletter. To continue reading about Borst Landscape & Design:
Hiring happy people: Attitude is just as important as skill.
Get recognized: How to apply for (and win) awards.