DESIGN/BUILD: Waterfall Windfall

Ever since his youth, Christopher Bell has witnessed concrete and asphalt taking over his native San Francisco Bay area. This saddened him, so he took inspiration from the backpacking trips he used to take to bring that scenery back to the city. The result – the addition of water feature installation and maintenance to his service mix six years ago. “I thought it would be great for people to have some nature in their backyards,” says the owner of Alliance Land and Waterscapes in Prunedale, Calif.

Bell enjoys the fact that he can bring ponds and waterfalls to customers’ backyards and that no two are exactly alike. He, like many other contractors, has discovered an add-on service that stretches his imagination and his bottom line.

OVERFLOWING INDUSTRY. Small beginnings have become huge for some waterscape contractors and the industry as a whole. “It’s a wide-open business,” Bell says. “In the late 1990s, there was a surge of contractors jumping into water features, and I think there are now 60,000 to 70,000 water garden installers in North America.”

In fact, 30.3 percent of contractors offer waterscape services, according to Lawn & Landscape research. And while 24.3 percent of contractors said they purchased water feature products in the past 12 months, 27.5 percent said they plan to purchase them in the next 12 months – a 3.2 percent increase.

Bell has been in the landscape industry 26 years but started designing, servicing and repairing water features six years ago. For the first five years he was pushing “a water garden in every home, business and institution,” he says. “My mantra is that everyone deserves a waterfall. It’s just natural that people love the sound.” A customer favorite is a waterfall with a stream, he adds.

Like Bell, Paul Holdeman, owner of The Pond Gnome in Peoria, Ariz., started installing and maintaining water gardens six years ago after he met a professional in the business who got him excited about the craft.

The first few years were slow because nobody knew about the product or had faith in it. “People feared that ponds would be high-maintenance,” Holdeman says. “But once we got some in the ground and had our annual pond tour, that changed things.” He is referring to his annual Parade of Ponds, held every April, where prospective customers tour established ponds to get a water feature education. This helps to ease customers’ maintenance fears and often convinces them to let The Pond Gnome build ponds in their yards, he says.

Holdeman says the service is going well. He made $250,000 last year with the four-man crew. This year he has seven employees dedicated to water features and they plan on making $500,000. In March, he was already booked with installation appointments for the following four months.

Residential water features have been around for as long as 40 years, says Sean Murray, national consumer sales manager of Little Giant Pumps, Oklahoma City, Okla. But the industry has only started to really take off in the past decade, adds Kevin McCurly, sales manager at OASE, Corona, Calif.

As the water feature business booms, so does pond size. It’s not uncommon today to see 5,000- to 10,000-gallon ponds, Murray says. While pond size averaged 500 to 800 gallons five to seven years ago, the average pond size today is 1,000 to 1,200 gallons, McCurly says.

DIGGING WATER FEATURES. Installing water features can be challenging because it is one of the only aspects of landscaping that combines light, movement, sound and color, McCurly says. And because cookie cutter designs are not appealing to customers, “every pond should be unique,” he adds, pointing out lighting and landscaping as water feature add-on services.
 “It’s about adapting to a particular setting more than digging a hole and putting water in it,” agrees Andreas Szabados, North American marketing manager at OASE.
 Likewise, just because the products used to build a pond are of good quality doesn’t mean a quality pond will result. That is up to the contractor, Szabados says. For instance, Holdeman has three criteria for water features he and his three-man crew install – they must be beautiful, profitable and low-maintenance.
 The tools used to build ponds vary from company to company. Holdeman prefers picks and shovels vs. backhoes and other large machinery. As a result, the crew can start jobs earlier in the morning because they don’t have to worry about loud machinery waking the neighbors. The crew can also fit their tools through tight spaces, such as 36-inch gates, which are ubiquitous with their residential client base, he says.
 The only machinery Holdeman’s crew uses is a crane to set boulders that range in size up to 1 ton for waterfalls. Other necessities include wheelbarrows, dirt, rocks, a rubber membrane and a filter system. With a four-man crew, they can dig a 10-foot hole in one-half day. It takes about five days to complete a project.
 Bell rents equipment as needed. One of the best tools is the 24-inch box dolly, he says, adding that he also has rented skid-steer loaders and excavators for water feature installations. In 2005, he spent roughly $10,000 on rental equipment. He uses the equipment for larger features that involve lifting a half-ton or heavier boulders. The customer picks up the cost when rentals are used on the job. It takes Bell’s crew anywhere from one to four days to build a water garden.
RETENTION SUGGESTIONS. While some waterscape contractors market directly to homeowners, others get business from colleagues whose services stop short of ponds. “Some landscape contractors realize it’s not their forte and contract the work to someone who specializes in waterscapes,” Bell says. “About 15 percent of my business comes from other landscape contractors.”

No matter where they get the work, contractors should strive for less maintenance-prone issues and build for longevity, Szabados suggests. “Every pump failure is a callback for a company,” he says, adding callbacks deplete profit because of the additional labor cost required to fix problems.

Other failures occur when a swimming pool pump has been installed, Holdeman says, adding they are not ideal for ponds because they are too expensive to be running around the clock, which is how long a pond pump should run. Holdeman is sometimes called upon to fix jobs other waterscape contractors left behind, which include concrete ponds that aren’t balanced and those that leave rocks rolling to the middle of the pond. “There are more bad ponds going around than good,” he says, adding that the problem usually isn’t the materials, but the way it was installed. Last year, half of Holdeman’s business was rebuilds.

And the installation or rebuild is just the start. “It’s by no means the end of the relationship with the client,” Holdeman says, pointing to pond maintenance as an add-on service opportunity.

But for contractors not ready to offer maintenance or for clients who don’t want it, providing customers with basic pond care tips is crucial for a happy customer and long-lasting pond. To communicate with its clients, The Pond Gnome sends out a newsletter that addresses the changing seasons and pond care. “If you install water features you have got to stick with the client to make it work,” Holdeman says.

Give customers more information than just the cost of labor and installing the equipment, Szabados agrees. “Customers feel a contractor should be able to give information about the care of the water feature,” he explains. “I’ve seen many cases where the contractor builds something only to have the customer call later and ask why the pond is filled with algae.”

In fact, before adding water features to their service menus, contractors need to “know a little background on pond biology and why certain things happen,” Szabados advises.

Contractors can even become certified waterscapers. No states require certification to install and maintain water features, but some waterscape product manufacturers offer courses and certification, Murray says.

All in all, the ultimate formula for a successful waterscape contractor is 1/3 background, 1/3 installation and 1/3 business savvy, Szabados says.

PONDERING COST. To stay in the business of water feature installation, Holdeman recommends keeping profit margins up. “People price ponds too low,” he explains. “People think $1,000 for a pond is enough but not if you want to be around for that customer in two years.” With 50-percent profit margins, Holdeman’s jobs average $8,000 to $10,000 each.
   
Similarly, Bell’s clients typically pay about $8,000 for a pond that takes one day to complete. The price grows exponentially for each additional day of work. In 2004, he installed 90 water features and the average cost was $6,580. Most of the jobs took one day each. Last year, his crew completed 55 water features, with the average job costing $12,500. While the jobs took longer to complete, which decreased the number of ponds they were able to install, the sizes and prices of the ponds allowed Bell to bring in more money.

Bell starts planning in March for jobs that run November through February. He frequently has renovations scheduled during this time. During April through August, he’s consistently booked up to six weeks in advance with new installations.

When setting prices, contractors should not focus on competitors’ prices. Instead, they should focus on making a profit, Szabados says.

And getting your feet wet with smaller jobs at first is best, Holdeman advises. “Don’t feel like you’ve got to handle a $25,000 job right out of the gate,” he says. “Those can put you out of business.”

The most important key to a booming business is continued customer service and education, Holdeman says. “If you want good word of mouth, you’ve got to stick with people after the pond is installed.”