PDA

View Full Version : Is it worth the effort?


pharmdc1
02-23-2007, 02:19 PM
I want your honest opinions on this. A friend and I have been installing irrigation systems on the side for about a year and are considering doing it full time now. We make great money per install job, but we don't do it very often. My question is, for those of you that have taken the leap, is it worth the effort to try to make a full time business out of it? Of course our wives say we are idiots for considering it, but we enjoy it and want to at least explore the option. I've heard from a couple of people here that we should plan on living broke for the first couple of years. I'm sure that it will be tough to start, but what does that mean in terms of numbers? Can any of you give me examples of how much you made starting out and what you went through to get where you are now. Would you do it again? Thanks for your input.

gusbuster
02-23-2007, 04:05 PM
In terms of numbers, there is always different variables.

For example, you start now, what are you going to do if a drought comes into play?...only likely work is going to be repairs.

How much real competition do you face?

What kind of equipment do you really need vs can get by by renting as needed?

Other things to look at:
Who's going to pay the mortgage\rent?
What about various insurances such as health, liability and if applicable w.c.?

Once you answer those questions, then you can actually come up with start up numbers.

If you live in an area where you truly have a season, what are you going to survive on during those off months?

There's no reason to be poor, but for poor planning.

If you mean by poor, not having the ability to buy that new super duper TV, then I wouldn't consider going on your own because a good business is always going to poor money back into the company to be more profitable in the long run. it's the ability to pay yourself more and more and still put money back into the company is the trick to any kind of company.

Just my 2 cents of thoughts

pharmdc1
02-23-2007, 05:19 PM
In terms of numbers, there is always different variables.

For example, you start now, what are you going to do if a drought comes into play?...only likely work is going to be repairs.

How much real competition do you face?

What kind of equipment do you really need vs can get by by renting as needed?

Other things to look at:
Who's going to pay the mortgage\rent?
What about various insurances such as health, liability and if applicable w.c.?

Once you answer those questions, then you can actually come up with start up numbers.

If you live in an area where you truly have a season, what are you going to survive on during those off months?

There's no reason to be poor, but for poor planning.

If you mean by poor, not having the ability to buy that new super duper TV, then I wouldn't consider going on your own because a good business is always going to poor money back into the company to be more profitable in the long run. it's the ability to pay yourself more and more and still put money back into the company is the trick to any kind of company.

Just my 2 cents of thoughts

What do you mean about mortgage/rent? For our individual homes? Our health insurance will be taken care of by our wives. We will need liability insurance, but as for WC, we won't start out with any employees, so I don't think that will be necessary. We could get a business loan to buy the equipment, but we will probably rent as needed to start. We do have a good bit of competion around, but they are mostly landscapers that also do irrigation, not strictly irrigation. The winter season is a concern that we have considered. It could be a time for some installs and backflow testing. To answer your question, the first few years, all we want is to be able to pay our bills at home and keep the business afloat. Do you think this is possible with us having a partnership or would it be better for one person to do it?

PSUturf
02-23-2007, 05:30 PM
It will depend on your startup costs. If you have to rent a building, buy a truck and trailer, buy a plow / trencher then it will be riskier. If you already own the equipment and can work out of your garage I would be more comfortable with turning it into a full time job.

I was in a similar situation a few years back. I used to help a friend who had a side business installing irrigation systems. Because his overhead was so low he made about $1000 from an average install (8 zones) after all expenses were paid. If you and your friend could average two installs per week you should do ok (without knowing how much income you need)

pharmdc1
02-23-2007, 05:59 PM
It will depend on your startup costs. If you have to rent a building, buy a truck and trailer, buy a plow / trencher then it will be riskier. If you already own the equipment and can work out of your garage I would be more comfortable with turning it into a full time job.

I was in a similar situation a few years back. I used to help a friend who had a side business installing irrigation systems. Because his overhead was so low he made about $1000 from an average install (8 zones) after all expenses were paid. If you and your friend could average two installs per week you should do ok (without knowing how much income you need)

We could potentially get by with just buying a trencher to start. We already have a truck and trailer. In the past we have just rented a trencher for each job. It would be a luxury to have a bobcat trencher and a mini-ex, but that would come later. We would need to pay ourselves 60 to 70K combined per year to make ends meet at home. Most installs we have done average about 4 to 5 zones, but we usually clear about $1500 for 4 zones. The only problem would be having the demand to install 2 systems per week.

justgeorge
02-23-2007, 06:07 PM
Where have you gotten your business from in the past doing it on the side? Advertising can get expensive if you're looking to add enough business to go full time. For example, in my area using Valpak, 30k homes is $900/month; 60k homes is $1600/month.

Also if everyone else in your area uses a vibratory plow instead of a trencher you'll want to go that direction; it would be hard to compete when you're trenching and everyone else is plowing.

George

pharmdc1
02-23-2007, 06:18 PM
Where have you gotten your business from in the past doing it on the side? Advertising can get expensive if you're looking to add enough business to go full time. For example, in my area using Valpak, 30k homes is $900/month; 60k homes is $1600/month.

Also if everyone else in your area uses a vibratory plow instead of a trencher you'll want to go that direction; it would be hard to compete when you're trenching and everyone else is plowing.

George

$900/month!! That is ridiculous. There's got to be a cheaper way. In our area, nobody that I know of uses a plow. Too many rocks and hard red clay. For our side jobs, it's just been word of mouth through friends. But that won't get us 2 jobs per week for sure.

koster_irrigation
02-23-2007, 07:11 PM
Thats ridiculous. Who wants to take calls from 30k or 60 thousand households. (Not that your going to get that many calls) Half would go to the projects, of whom dont know that a irrigation system is. Thats a complete waste of money.

Wet_Boots
02-23-2007, 07:58 PM
Getting known is where the "how long can you stand to lose money?" question comes in. If you can do service, you want to be in the phone book, and there's some lead time involved getting into a directory.

justgeorge
02-23-2007, 08:13 PM
Thats ridiculous. Who wants to take calls from 30k or 60 thousand households. (Not that your going to get that many calls) Half would go to the projects, of whom dont know that a irrigation system is. Thats a complete waste of money.
Nope they break the city down into groups of 10k homes each. I pick which areas they go to. Not to put in a plug for Valpak, but they don't even deliver to the downtown area (which would include "the projects").

SprinklerGuy
02-24-2007, 08:18 AM
I have also done a ValPak type...

It was partly to "blame" for my company growing from 100k per year to almost 1 million per year in just under 4 years. It is a tool...did it work better than other marketing? Maybe not...but it did bring in tons of work every month. I paid 1200 per month to mail 40k per month.....and you know what? If I could afford to do it or had the help to work the leads here in Colorado, I would do it again.

Your results may vary of course....but it does work, or at least it did work.

laylow1994
02-24-2007, 10:24 AM
when i first started i had a low overhead and we were profiting like 1000-1100 or so per install.... so as long as you can keep the work coming you should be good.....

pharmdc1
02-24-2007, 03:36 PM
I have also done a ValPak type...

It was partly to "blame" for my company growing from 100k per year to almost 1 million per year in just under 4 years. It is a tool...did it work better than other marketing? Maybe not...but it did bring in tons of work every month. I paid 1200 per month to mail 40k per month.....and you know what? If I could afford to do it or had the help to work the leads here in Colorado, I would do it again.

Your results may vary of course....but it does work, or at least it did work.

So did you do 100K your first year in the business? 1 million after 4 years is amazing! How many employees do you have? How is it possible to bring in that kind of money in one year? Mainly installs, repairs, what? Do you do anything else besides irrigation?

pharmdc1
02-24-2007, 03:41 PM
when i first started i had a low overhead and we were profiting like 1000-1100 or so per install.... so as long as you can keep the work coming you should be good.....

How many zones for your average install? How many could you turn over per week and with how many people? Are you still doing it and how well have you done? Thanks!

SprinklerGuy
02-25-2007, 08:24 AM
My company did it all in Arizona...landscape installs etc.

No my first year I did about 50 per day....3 days per week....;)

The first 2 years were lean....the next year was better...and then it exploded.

Good luck to you.....expect to suffer the first 2-3 years unless you pour money into marketing. Of course, you'll still suffer because that will bring your net down.

AWJ Services
02-25-2007, 12:22 PM
nobody that I know of uses a plow. Too many rocks and hard red clay.

Your soil should be no harder than ours and if you do not use a plow here then you would not get the job on a nice lawn.

It may be an avenue that would set you apart.

I have a good friend who owns an Irrigation buisness and I helped him alot this year too learn the trade.I also learned that it his a tough industry that requires hard work and attention too detail.
Most here give a 3 year warranty on new installs.



You mentioned you were profiting 1500 dollars on a 4 zone system but you also mentioned that you would have too rent equipment as well.
Just curious on what you charge per zone?
There is also more too determing profit than just subtracting materials from the overall job cost.

At that pace you will only need too install about 350 zones a year too reach your needed salary requirments.

pharmdc1
02-25-2007, 01:05 PM
Your soil should be no harder than ours and if you do not use a plow here then you would not get the job on a nice lawn.

It may be an avenue that would set you apart.

I have a good friend who owns an Irrigation buisness and I helped him alot this year too learn the trade.I also learned that it his a tough industry that requires hard work and attention too detail.
Most here give a 3 year warranty on new installs.



You mentioned you were profiting 1500 dollars on a 4 zone system but you also mentioned that you would have too rent equipment as well.
Just curious on what you charge per zone?
There is also more too determing profit than just subtracting materials from the overall job cost.

At that pace you will only need too install about 350 zones a year too reach your needed salary requirments.

We haven't gotten to the point of charging by zone. On our last job, we just charged the customer for the necessary parts and rental of the trencher. The $1500 was just for labor. That calculates to 375 in labor per zone. Is that close to what you get in GA? I imagine your soil is similar to ours. The thing we run into around here is huge beds of rock. Sometimes the trencher barely makes a dent in it. Would the plow actually work with all the rock? If so, I'm all for it. How did your friend do his first couple of years?

pharmdc1
02-25-2007, 01:19 PM
My company did it all in Arizona...landscape installs etc.

No my first year I did about 50 per day....3 days per week....;)

The first 2 years were lean....the next year was better...and then it exploded.

Good luck to you.....expect to suffer the first 2-3 years unless you pour money into marketing. Of course, you'll still suffer because that will bring your net down.

50 what per day? Hopefully not dollars!? How many jobs did you actually do your first couple of years? How many employees?

AWJ Services
02-25-2007, 01:33 PM
The plow does not like rock at all.
Not really sure how deep you put the pipe either.


If the ground is really hard we will throw out soaker hoses for a few days.

Usually though if you can trench through the rocks you can plow through them.
There are exceptions and your area may be entirely different than ours as far as soil.
The plow is just a great selling point for my Friends business.

The rate for "quality" irrigation companies are 550.00 a zone.
That assumes about 15 Gpm per zone and normal runs.
Each job will vary.
The problem with the pricing by zone is sometimes you win and sometimes you lose.
But here everyone uses this method so it is hard too defer from this method.

You have the right idea as far as profit is concerned.
Estimate all costs first! then add intended profit too determine job cost.

There will be a learning curve.

How did your friend do his first couple of years?

He went from plowing cable for the cable company too irrigation.

He would have actually been okay except he took on a partner and was taken advantage of.
He was left with about 30+k worth of debt and the partner left with 15k payment for a job.
The guy ended up being some sort of con artist and was very good at it.

He has recovered and has a great word of mouth business.
Last year his crew went back too Mexico(been with him 6 years).
He has struggled some with help since.
Thats were I came into the picture.
I wanted too learn and he needed the help.

He gets very slow from dec too feb but he is wide open the rest of the year.
Most jobs here are average 7 zones.

We just got done with a 23 zone job at a private residents .
We both had no other work at the time so we piled in and did 70% of it by ourselves.

His crew would average about 4 to 5 zones a day before they left and went back too Mexico.

He works off of 5 rotors per zone or 10 spray heads per zone.
Thats based off of the 15 GPM that the homeowners are guaranteed by the water department.
Not saying this is the right way too do it but just too help you understand the material cost.
He uses Hunter stuff.

pharmdc1
02-25-2007, 02:51 PM
The plow does not like rock at all.
Not really sure how deep you put the pipe either.


If the ground is really hard we will throw out soaker hoses for a few days.

Usually though if you can trench through the rocks you can plow through them.
There are exceptions and your area may be entirely different than ours as far as soil.
The plow is just a great selling point for my Friends business.

The rate for "quality" irrigation companies are 550.00 a zone.
That assumes about 15 Gpm per zone and normal runs.
Each job will vary.
The problem with the pricing by zone is sometimes you win and sometimes you lose.
But here everyone uses this method so it is hard too defer from this method.

You have the right idea as far as profit is concerned.
Estimate all costs first! then add intended profit too determine job cost.

There will be a learning curve.



He went from plowing cable for the cable company too irrigation.

He would have actually been okay except he took on a partner and was taken advantage of.
He was left with about 30+k worth of debt and the partner left with 15k payment for a job.
The guy ended up being some sort of con artist and was very good at it.

He has recovered and has a great word of mouth business.
Last year his crew went back too Mexico(been with him 6 years).
He has struggled some with help since.
Thats were I came into the picture.
I wanted too learn and he needed the help.

He gets very slow from dec too feb but he is wide open the rest of the year.
Most jobs here are average 7 zones.

We just got done with a 23 zone job at a private residents .
We both had no other work at the time so we piled in and did 70% of it by ourselves.

His crew would average about 4 to 5 zones a day before they left and went back too Mexico.

He works off of 5 rotors per zone or 10 spray heads per zone.
Thats based off of the 15 GPM that the homeowners are guaranteed by the water department.
Not saying this is the right way too do it but just too help you understand the material cost.
He uses Hunter stuff.

We usually bury mainline 12 in and laterals about 6 to 8. This is usually plenty deep enough considering our winters aren't all that cold. How does he keep the jobs rolling in? Lots of advertising? Also, is the 550 per zone just for labor or does that include parts too? Last 10 zone job ran about 250+ per zone for parts. But we did put average 6 rotors per zone.

Desertdweller
02-25-2007, 04:46 PM
Why are you so worried about just installs? I've owned a few irrigation companies and have always focused on service. One of the main things is Keeping the overhead down. Our first year we either rented a trencher as needed or had another installer pull pipe for us. The overhead on service is much less than installation. You can make enough money just doing service if you can get the jobs.

pharmdc1
02-25-2007, 05:05 PM
Why are you so worried about just installs? I've owned a few irrigation companies and have always focused on service. One of the main things is Keeping the overhead down. Our first year we either rented a trencher as needed or had another installer pull pipe for us. The overhead on service is much less than installation. You can make enough money just doing service if you can get the jobs.

We are focused on installs because that is what we have the experience in. Service would be an option to keep business going. How exactly to you approach service? Do you keep a lot of different parts by a lot of different companies in stock, or do you find the problem and then go to the supplier and buy it then? Do you just tell the customer to cut off the water supply til you can get out to look at it?

Desertdweller
02-25-2007, 05:38 PM
I have always just run out of a pickup using slide out trays and storage bins. We try to have 95% of the parts we need on the truck. Most people don't care if you replace a Toro spray head with a Rainbird so there isn't the need to carry every type. We try to have a couple of the most common valves on board and a couple clocks. Naturally all the fittings are the same. It really isn't that hard to have parts for most jobs with you. As you run out you restock.

bicmudpuppy
02-25-2007, 06:45 PM
We are focused on installs because that is what we have the experience in. Service would be an option to keep business going. How exactly to you approach service? Do you keep a lot of different parts by a lot of different companies in stock, or do you find the problem and then go to the supplier and buy it then? Do you just tell the customer to cut off the water supply til you can get out to look at it?

Having a replacement controller on your truck is important. Replacing the doa device with the exact same controller isn't. Stock what you can stand behind. That means what you can get support from at your local supply house. Valves are a different story. How far are you from a good supply house? At $15/ 1" valve, your not going to break the bank having a couple of the most common valves on your truck. Keep 3-4 of the brand you install and for the first month, every time you need a different valve, buy 3 instead of one. A good markup will mean your breaking even until you have inventory. The other parts, you can just carry what you install. Larger commercial equipment you can justify going to get the parts instead of having them on the truck. Now, if you have a customer that is all 1.5" or 2" brand X valves and your working on them a lot, stock a spare, but again, when you need one, buy two. Solenoids the same way, keep some of each style on hand. It doesn't matter if it says RB, Hardie, Toro on a small base solenoid, but have a bunch on the truck. RB DV style solenoids, have a few, etc.

FWIW, when I was driving a service truck in DFW, I probably had almost 10K in parts on an isuzu pup, but that was a lot of R-Co brass stuff too
Any good repair tech will get to the inventory point w/o costing you a lot of money with the need one buy two philosophy.

AWJ Services
02-25-2007, 07:03 PM
We usually bury mainline 12 in and laterals about 6 to 8. This is usually plenty deep enough considering our winters aren't all that cold. How does he keep the jobs rolling in? Lots of advertising? Also, is the 550 per zone just for labor or does that include parts too? Last 10 zone job ran about 250+ per zone for parts. But we did put average 6 rotors per zone.

He does everything the same.About 12 too 16 inches.

He got his start through the phone book and mailers.
After a few years word of mouth will keep you busy.
He does little advertising now.

550 a zone is parts and labor.