Landscaping companies have different opinions when it comes to their equipment purchases in 2011 – some are buying as they normally would, but others are cutting back on expenses.
Eric K. Weishaar, owner of Breckenridge Landscape, Design, Installation & Maintenance in New Berlin Wis., says he plans on buying another vehicle, a plow and a salt spreader – and maybe more.
“Depending on what happens here at the end of this year, what kind of maintenance contracts we get back, we may end up equipping another crew so that would include a truck, trailer, a large mower, small mower and all the other small equipment, “ Weishaar says.
Weishaar says he spent $57,000 on equipment in 2010 and plans on spending $30,000 in 2011. Because the company is growing, Weishaar needs the equipment, and he ranks equipment purchases high on his priority list of where to spend money.
“I definitely want to make sure the guys have everything they need to get things done,” he says.
Weishaar has the capital if he needs to buy more equipment but he says, “We’re just buying as needed kind of thing. As we see volume of work increase then we’ll go ahead and get what we need.”
Weishaar doesn’t need to buy new skid steers this year because his have less than 3,000 hours on them. But he keeps an eye on the amount of maintenance the equipment requires, and will replace equipment if repairs become a burden.
“There’s a point of diminishing returns where you look at equipment and you say, ‘Well, if I’ve got to put another 1,500 bucks into this mower that I could probably buy a new one for X amount, then it’s probably worth getting a new one.’ So, it just depends on the age and the wear and tear on it,” he says.
Pattie Fell, owner of Ransom Lawn Services, says business is going well for her El Paso, Texas-based company, and she doesn’t plan to change her equipment purchasing plans. Fell says she purchases about 70 pieces of equipment a year because the company has a large volume of work.
She plans on spending between $20,000 and $25,000 on equipment in 2011, and is considering adding a leaf blower and a chipper, a purchase she put off this year.
Brad Gelo, owner of Green Scene, also in El Paso, Texas, says he will also spend the same amount of money on equipment as he did in 2010. He estimates the company spends about $45,000 to $50,000 on lawn care equipment a year. That doesn’t include vehicles, but he hopes to only have to buy one truck this year, since he bought four trucks last year that cost about $22,000 each.
He plans on buying three tractors this year and about 30 pieces of smaller equipment that have to be replaced due to wear and tear. While he expects the company grow by about five percent in revenue, he says that doesn’t affect the type or amount of equipment he would buy. In fact, he says he’d put any extra money toward raises for his employees before he sunk it into buying more iron.
“If things get really good, I’m going to buy the same amount of trucks, the same amount of tools, but we would start working up some increases especially to our crew chiefs,” Gelo says.
Gelo says dealer loyalty plays a big role in his purchasing practices.
“My theory is the more business I do with one person, I become very important to them,” he says.
He also likes to buy the same brands so he can use the good parts as the machine wears down.
“I buy pretty much all steel equipment because as it gets old we can rip a carburetor off and we can use it,” Gelo says. “So that’s why I stay with the same thing. There might be some better stuff but having a bunch of old pieces we can rip down for nuts and bolts, it’s amazing how much that helps you.”
Dealer Loyalty
In Browns Summit, N.C., Todd Huffines, owner of Start 2 Finish, found that staying loyal to one dealer is a great way to do business, and one he will continue to practice in 2011. Huffines will check prices on bigger equipment or a special product but always finds his dealer is close to the average price. Beyond price, Huffines says it’s the service and relationship that keep him going back to a dealer.
“If my tractor broke and I need to demo a new one to get me through a job … he’ll bring it out there to me,” he says.
Huffines says he still has customers who call him and ask him questions even though he is done with the job. He expects the same service from the people he buys from.
“It’s hard for me to sell a quality service and the things that matter after the sale and then not have that same mentality with the people I do business with that I’m a customer of,” he says. “It’s not necessarily about the bottom line. It’s piece of mind.”
As far as how much equipment he plans to buy in 2011, Huffines says it all depends on how his balance sheet looks at the end of 2010. He plans to purchase between $50,000 and $100,000 of equipment, which he’ll try to find used when he can instead of purchasing it new.
“We’re going to find something that’s not wore out, but we’re not going to buy new equipment,” Huffines says.
Seeking Versatility
Along with buying used equipment, Huffines also wants versatile equipment. The more versatile a piece of equipment is the more assurance the company will have work to do every day.
“Whatever we purchase, it’s got to be dual-purpose,” he says. “Something we can use to do what we’re doing now, but also add another service.”
Don Teal, owner of Las Vegas-based Perennial Land Care, says he’s taking a wait-and-see approach on how the economy will do before deciding what equipment to purchase.
“We are actually growing slightly,” Teal says. “We are going to be up about 10 to 15 percent over last year, but we’re not putting on new equipment and we are not putting on manpower. We’re just trying to work smarter.”
And why isn’t buying additional equipment a way of working smarter?
“It’s very tough to get credit, unless you are paying cash .... That’s one of the predominant reasons,” he says.”And we don’t trust the economy right now.”
Teal says the company does rent equipment as needed, which has the benefit of not having to perform maintenance on the piece of equipment. He says they rent equipment about once a month, depending on how much construction they have to do.
“We don’t have enough demand to justify the upkeep on them,” he says. “That’s why we lease those anywhere from a day to a week at a time.”
The author is associate editor for Lawn & Landscape. Send him an e-mail at bhorn@gie.net.