When It Comes to Costing Out an Irrigation System

							When It Comes to Costing Out an Irrigation System ...




                                                        By Phillip Meeks

                   One proof of professionalism is in the costing. That’s a cold, hard fact of
                    the business world, and one upon which fly-by-nighters can easily get
                                                  snagged.
                 It isn’t to say, however, that consumers always get what they pay for — although this
                 usually proves true as well — or that some quality services aren’t more reasonable
                 than others. What this does imply is that the more experience a landscape contracting
                 company has, the more precision will be found in the costing phase of the process. This
                 therefore improves your profit margins, while giving your clients the best deal possible.

                 Because so many factors that relate to irrigation costing lie
                 beneath the surface (literally), this may be one of the most
                 difficult-to-estimate offerings in the contractor’s bag. It’s
                 important, then, to take your time in doing your analysis.
                 More so than in any other portion of your business,
                 become well-acquainted with a property’s limitations and
                 the client’s preferences before you cost an irrigation
                 system.

                 Two seemingly identical situations can be totally different
                 in terms of water pressure and access, utilities and the
                 homeowner’s ideals. Thus, it pays to do your homework for
                 each project, rather than relying totally upon general rules of thumb.
When It Comes to Costing Out an Irrigation System ...




                 Read the literature
                 Like in any other industry, irrigation is constantly being refined through the
                 development of newer materials and more high-tech controllers. One of the best ways
                 to keep tight reigns on your costing abilities is to stay up to date on the new products
                 in the marketplace. Maybe you don’t have the time or inclination to attend every trade
                 show that comes down the pike, but you may be able to carve out a few minutes every
                 week for some basic product research.

                 Technology is one of the few things in this world that gets more affordable as time
                 progresses. A controller with all the bells and whistles may be cheaper today than one
                 with just the basic functions a few years back. However, don’t pay for features your
                 client will never use. Know your choices. Read the product reviews in green industry
                 publications. If you have Internet access, check the Web sites of manufacturers
                 regularly to see if there’s anything new out there that can give customers more for
                 their dollar. From one year to the next, it may be possible to meet the exact same
                 irrigation need using less expensive and more reliable materials.

                 (By the way, have you ever ordered a product online and noticed a little box on the
                 form? Beside it might be a message like, “Please send me occasional updates on XYZ
                 Company’s new products.” Check that box. It means more mail, but it may also put
                 you a half-step ahead of your competitors.)
                 Says Jason Cupp, president of The Kincaide Company in Overland Park, Kansas, “I still
                 see contractors installing items such as controllers and heads that are the older
                 technology. I think they do that for two reasons: it’s what they know, and are
                 comfortable with; and they’re cheaper products, because they’re on the bottom of the
                 pole technologically. This is bad for a couple of reasons: the customer ultimately gets
                 an outdated product, and the pricing for the industry suffers because his price might be
                 cheaper than the new standard.”

                 Another point to note: clients may be willing to pay more for technology that will help
                 save them money in the long run. President Frank Coleman of the Tucker,
                 Georgia-based Visionscapes, shares this example: “We just finished landscaping The
                 Mall at Stonecrest in Lithonia, Georgia, just outside Atlanta. It’s a large regional mall
                 that covers more than 100 acres. We implemented a new radio FM Band computerized
                 system to manage the irrigation both on- and offsite.

                 This system monitors flow rates, so that if a head on a zone breaks, the system shuts
                 off and sends the computer a message stating there is a problem with zone number
                 100. This saves both time and, more importantly, money. The system has a full
                 weather station that monitors the weather, and will turn the system off if it’s too windy
                 outside, or if it just rained. This feature alone will pay for the system in less than a
                 year.”

                 Know thyself
When It Comes to Costing Out an Irrigation System ...


                 It’s a point that’s been made time and time again, but it warrants repeating: unless
                 you know the intricacies of your own company inside and out, you’ll never be able to
                 maximize your bottom line. Strive to know your crews’ abilities. How efficient are they?
                 Also, try to account for every cent of overhead that affects your company.

                 Cupp says, “I feel that some contractors submit lower bids to clients because they
                 don’t fully understand the difference between gross and net. They look at an irrigation
                 system and tell the client that the cost will be $3000. A contractor such as myself
                 would charge $4500 for the same system. The lower-bid contractor simply looks at the
                 revenue and thinks, ‘Wow, that’s a lot of money.’ They don’t take into consideration
                 the costs of labor, parts and overhead — the indirect costs. I see this all the time in our
                 industry, and it hurts us significantly.”

                 Having a firm grasp on such incidental costs associated with an irrigation project will
                 permit you to factor these into your estimate, and you’ll be much less likely to lose
                 money.

                 Know your subcontractors
                 Farmed-out components of an irrigation system can make or break a landscape
                 professional, depending upon the subcontractor’s expertise. In such a case, what you’ll
                 want to do is strive to work with those irrigation companies that have just as much
                 practical experience as you. Better yet, find somebody with even more experience, and
                 then it becomes a learning opportunity.
                 Says Coleman, “Several years ago, we renovated a large commercial property that had
                 a 20-year old hydraulic system. Our subcontractor installed all new valves, heads,
                 wiring and controllers. In pricing the job, he assumed that he would be able to use
                 existing PVC to go under roadways and sidewalks. He found some, but not many, and
                 was required to bore in numerous areas to gain access to the necessary landscape
                 beds. In this situation, he lost money due to underestimating the project.”

                 Over- and under-design by subcontractors can also be a detriment, says Coleman.
                 Over-design can price you out of a job, while under-design can lead to lesser coverage
                 and thus to a loss of vegetation. “Either way,” he says, “it’s a losing situation.”

                 Sure, seeking answers to so many questions is time consuming, but it’s sure to pay off
                 in the long run. “There’s a large handful of contractors (at least in my market) who
                 shoot from the hip for their pricing,” says Cupp. “They have no idea what parts go into
                 a system or what the labor factor is. They ‘throw out a number’ and hope to get the
                 business. I believe there are critical questions you have to have answered to accurately
                 set the cost of an irrigation system.”

                                                Not even the most experienced irrigation contractor is
                                                likely to maximize his or her profit with every installation.
                                                Some challenges just can’t be predicted; some clients can’t
                                                be pleased. However, you can definitely improve your odds
                                                by carefully considering the project’s parameters. Before
                                                you quote a figure, become well-versed with the client’s
                                                wants and needs. Know the features the property will
                                                support — and the ones it won’t. Become a walking
                                                reference book of your labor expenses, employee
                                                capabilities, overhead costs and other incidentals. Also,
                                                read everything you can get your hands on regarding new
                 products in your field: the pros and cons of each, their costs, their potential to replace
                 costlier or less efficient products and so on.

                 Anybody can, as Jason Cupp says, “shoot from the hip” when it comes to pricing an
                 irrigation job, but it’s your obligation as a professional in this industry to take careful
When It Comes to Costing Out an Irrigation System ...


                 aim. Hit too high and you lose business, too low and you lose profit. Sighting from
                 behind the proper knowledge, though, will increase your chances of being right on
                 target.

                 February 2002