We talk to contractors about their smart buying strategies when it comes to the equipment that does the heavy(and sometimes light) lifting to get the job done.
Tight budgets can put a squeeze on equipment expenditures – but pushing veteran equipment past its limit will jack up maintenance and repair costs. No one wants to pour hard-earned profits into keeping tired equipment alive.
Many contractors who held off on buying equipment during the recession are buying again, restoring their fleets and retiring the old soldiers that spend more time in the shop than the field. This month, Lawn & Landscape spoke with three landscape firms to find out how they buy smart.
Dave Rykbost is an early adopter of equipment technology. “I like to think of myself as a pioneer,” he says, quickly adding that he might not be the very first to buy a new toy. “But I do like to have the latest and greatest equipment as opposed to buying something that’s not so good,” he says.
He’d rather buy more power now than realize in the field that he could use an extra 10 horses.
Efficiency can depend largely on the equipment that’s running in the field, and Rykbost is eager to branch out if he figures an advancement will ultimately propel his bottom line. “I’ve had a mulch blower for 15 years, and at the time when I bought mine, there was just me and one other guy in the area that had one,” he says.
Rykbost isn’t boasting about his fleet. In fact, equipment expenditures have been modest at Dave’s Landscaping in Hudson, Mass., since 2008, which was a big spending year. The company bought five trucks, a slew of mowers and covered trailers because Rykbost acquired another business. “We had an increase in work to do,” he says.
The following years were less eventful in terms of equipment purchases. But by 2012, Rykbost says his repairs were “majorly up.” Specifically, the numbers had jumped by about $80,000 for equipment repair and parts. That was following a heavy winter. The snow season destroyed trucks, plows and more. “With snow, there is lagging repairs – they don’t necessarily happen right after the snow storm,” Rykbost says.
He tracks usage and repairs and buys accordingly. Trucks usually last for 10 years “I should probably sell them in five or six years instead,” he says.
Rykbost constantly seeks the next best thing – but he minds his financials. “Anytime we can shift away from labor and more on equipment, we are going to be better off,” he says, explaining a more powerful tractor purchase at year-end 2013 to assist with blowing snow in condo complexes. “We are going to try doing something a new and better way,” he says.
Last year’s expansion called for new heavy equipment at Thomas Turfgrass in New Braunfels, Texas. The company was adding another farm, where it cultivates sod and sprigs for a range of clients from company headquarters to backyards. Today, the company is 100 percent growing, filling and installing turf.
The 15 tractors in the Thomas Turfgrass fleet range from 60 to 100 horsepower. “They are used for mowing and cultivating fields before we plant,” he says. Thomas can expect the tractors to last about eight years. “Then we’ll probably keep them at least another four years,” he says. It’s time to trade them out when repairs pile up. “We’ll look at the function or age of the equipment, maybe the way it has been treated, but hopefully the latter is not the case,” he says. “It’s usually just age.”
Thomas doesn’t always seek out brand-new tractors. These are significant investments, and equipment auctions can be a goldmine if machines are properly checked out before purchase. Thomas will send his in-house mechanic to an auction to review any options.
“There have been some instances where there were hidden problems we didn’t realize – mainly electrical problems – and that burned us a little. But for the most part, we’ve had good experiences,” Thomas says.
He makes sure not to purchase a used tractor with more than 2,000 hours on it, and mowers should not exceed four years of age. About 20 percent of Thomas Turfgrass equipment is used. To make it last, an in-house mechanic meets with employees at least every two weeks to remind them about equipment care basics.
“We try to continually train our people, and we find that we have to remind them about what they are supposed to do,” Thomas says. Routine tasks like checking oil and water daily and air filters weekly can be overlooked. “When we are cultivating (soil), we may have a lot of dust, so those air filters may need to be changed or cleaned every day,” he says.
“The companies that make their equipment last longer are the ones that are going to make more money,” says Jed Taylor, president and CEO of Columbia Landcare in Columbia, Mo.
Contractors in the green industry have two variables to “combat” that will destroy profitability, he says. One is labor. The other is equipment. Both are difficult to manage, which is why Columbia Landcare works to train its crews so they can take the best care of equipment possible. Safety training videos demonstrate the basics of gas engines and how to operate equipment.
“All new-hires are required to go through a certain number of those (video) courses before they can set foot on a job site so they get a basic knowledge of how the equipment works,” Taylor says.
Then, the responsibility of ongoing training and overseeing equipment use falls on supervisors in the field. “Management must constantly remind crews – it’s a daily battle,” says Taylor, adding that “stuff happens” to equipment, and issues must be dealt with on the spot. A daytime mechanic handles minor repairs – flat tires and other basics.
Two evening mechanics change mower blades, oil and filters, hit the grease points and fuel up equipment so machines are ready to go in the morning. When major repairs crop up – and they do on a regular basis with commercial crews that run hard – equipment goes to the care of dealerships where Columbia Landcare holds longtime relationships.
“There are companies that jump around to different dealerships to save a dollar here or there, but there is something to be said for sticking with a relationship, because in the long-run you will save money,” Taylor says.
As for purchases, Columbia Landcare is in the third year (out of five) of a propane transition that will result in a total propane mower fleet. So far, the fuel savings are significant, with propane running about $1.60 a gallon compared to $3.50-plus for gas.
As for less maintenance because of cleaner-burning propane: Taylor isn’t seeing that yet. “We run that equipment so hard that eight times out of 10, the bodies of the mowers fail before the engines do,” he says.
Meanwhile, the company is getting a rebate of $1,500 per mower from a state program. “That basically pays for the added expense of buying the propane mower, which makes it a wash and a no-brainer,” he says of the decision.
Taylor sets expectations for how long equipment should last if it is cared for properly. Trucks should get 10 years – trailers can last 12 or more years. Mowers range from four to six years, and skid-steer loaders run as long as possible. “That might go from six to 10 years, depending on what they are doing and where they are going,” Taylor says.
“When you get into older equipment, you have repairs and that chews up your P&L,” Taylor says. And he’s watching that, because as he said, the companies that care for equipment reap the rewards at the bottom line. At the end of the day, he says, “That is the philosophy we follow.”