Renovation nation

Renovation nation

New construction has dropped off in virtually every region across the country. Savvy contractors have turned to more-reliable landscape renovation work.

June 22, 2011

With new construction drying up in most areas and customers tightening their purse strings because of the economy, renovation work has become a growing part of landscape companies’ business, nationwide. While that may mean smaller projects, many companies say it’s also meant more steady work. And since an update can be easier to sell than a complete replacement, landscape business owners seem to be embracing this growing part of business.

“In most markets, certainly ours, it’s very rare to do a total redo on a landscape nowadays, even on an existing home,” says Andrew Blanchford, president of Blanchford Landscape Contractors in Bozeman, Mont. “And new construction has really dried out. So it’s been a natural transition to start doing more renovation work.”

Blanchford says that while his area has fared better than other parts of the country, since new construction still exists to some degree, those jobs have gotten more competitive than ever. “New construction is probably 10-20 percent of what it once was,” he says. “Those big jobs are fewer and far between. We’re certainly interested when one of those types of jobs comes up, but so are 30 other contractors. The property owners get that and they fight for the lowest price. That’s why renovation work has been nice. In fact, most of our landscape work right now is renovation-oriented.”

For Bertog Landscape Co. in Wheeling, Ill., it seems that lately, renovation work is a large majority of business as well. Linda Farrington, landscape architect, says that a lot of the work is in small projects – and they can start to stack up.

“The property owner may have an area they’re tired of or maybe a patio is falling in and they need it fixed,” she says. “We’ll repair the patio but then find that an area next to it is overgrown so we’ll suggest taking care of that area. Over time, we may do much of the property, but we’re finding that even if the client wants to do their entire landscape, they typically want to do it in phases. Maybe it’s the patio one year, the front yard the next. Those big, one-time jobs are less common.”

Dave Hanson, senior vice president at ValleyCrest Landscape Maintenance, part of ValleyCrest Landscape Cos., says that he’s also finding renovations are a much bigger part of business than in previous years. He believes the increase in renovation work has largely been due to the amount of unoccupied commercial real estate space on the market. Property owners want to do what they can to differentiate their building from the next. This has meant increasing renovation work for the company, which focuses on 100 percent commercial clientele.

“There are large inventories of unoccupied space that people want to lease or rent as opposed to developing something brand new,” says Hanson. “What we’re seeing more and more is that, as the economy slowly turns an uptick in the request for proposals to spruce up buildings, renovate sites and add attractiveness to landscapes is merging. What the owners are working on is getting that space leased or divested and that means making sure the first thing people see is not just the building, but a beautiful landscape.”

Challenges to confront.

While renovation projects may be smaller scale than new installations, they can also be more time-consuming and sometimes more challenging. Farrington says renovations can be difficult because you’re dealing with existing structures.

“For instance, we may have to work with existing pavers that wouldn’t have been our first pick to use,” she says. “Or maybe we have to work around a crazy layout that makes our job more difficult to do. Because of these factors, it can end up taking a lot more time.”

Renovation work may also mean the ability to work under pressure and even change plans at the last minute based on what is and isn’t working. “With renovations, you definitely run into more logistical issues,” Hanson says. “You may want to plunk in a specimen tree, but may have limited access to that area so you have to modify the plan.

“There’s just a lot more to think about. In other words, with a renovation job, you have the frame and the picture is there, but you have to re-work the elements in that picture. It can mean moving things around but you always have to take into consideration what’s already there. That means it can involve a lot more planning.”

Hanson says that along with more forethought and planning, renovation work may also mean changing the order of how you normally do things.

“But we like the challenge,” he says. “Renovation work challenges us to think outside the box and come up with how to solve those problems. It certainly shows the value an experienced landscape partner brings to the table.”

Solving the problems that arise also means listening to the customer and making sure you’re on target with what they want. This is especially true at residential sites, where you’re dealing with people’s personal “stuff.”

“They may be attached to things in their backyard whether it’s a tree or maybe even just their grass,” says Blanchford.

“Doing renovation work means taking more time to listen to the client. A lot of these clients are very attached to their properties and you want to make sure that the renovations you’re making only make them happier with the property in the end,” he adds.

Of course, one of the frustrating aspects of this type of work, which often does require more time and patience, is that it doesn’t pay as well as the big, all-at-once type of jobs used to pay. “Our average job size has gone from new construction being maybe $75,000 for a single job to getting $25,000 or less for the average renovation job,” Blanchford says. “Just the other day we sold a $10,000 patio job. That’s a nice little job, but it’s definitely a big difference from where we used to be. And you have to consider that you need to talk to way more clients to get to that $100,000 in sales that used to be earned in maybe one or two jobs.”

Making the sale.

Greater sustainability is a strong selling point for renovation work, today.

Sustainable landscaping has become a hot topic and it’s one reason why many property owners might consider a property renovation in the first place.

“A lot of the marketplace today is very green conscious,” says Hanson. “Increasing sustainability by, for instance, putting in plant material that doesn’t need to be trimmed as often or might be more pest-resistant or use less water, is very attractive to customers. (You’re looking to) not only reduce maintenance costs but other out-of-pocket expenses as well – water being a big one.”

Water might actually be the best place to start the conversation with customers.

“Irrigation is something we definitely bring up to our customers,” says Blanchford. “But we can do a lot to help make the property more sustainable. We can incorporate produce so that the homeowners can grow their own food or we can look at more native and drought-tolerant plants that won’t require as much watering. There’s a lot that can be done to make the property more eco-friendly and it’s definitely something we’re finding customers are interested in hearing about.”

Blanchford’s company, which brought in $900,000 last year and focuses primarily on residential customers, has also found a niche with getting involved with projects through their maintenance division. When the company gets on to the property to do some maintenance work, employees are then able to identify problems that require renovation work if the homeowner so desires.

“We’ve been able to find some phenomenal upsells with that strategy,” says Blanchford. “It was probably 20 percent of our revenue last year and we turned one of those jobs that just started as maintenance, into a $100,000 renovation project.”

In the end, all three say that making sales has meant doing a lot of follow-up and really staying on top of clients. “We usually go out and meet clients face-to-face,” Farrington says. “We’ve found that can make a difference.”

The author is a frequent contributor to Lawn & Landscape.