PDA

View Full Version : Diversifying


Mike M
08-04-2008, 08:24 AM
Curious if anyone here is, or is considering, diversifying; either going inside with lv lighting and working as a designer with EC's during new construction, or, expanding your design/build business with water features or putting greens, etc.

Unique has a great shot of a putting green, beautifully illuminated and well landscaped.

irrig8r
08-04-2008, 09:30 AM
Do you think there's a big market for putting greens? A Google search yielded a lot of hits....and a lot of ads.... you might be onto something...

TXNSLighting
08-04-2008, 09:47 AM
Do you think there's a big market for putting greens? A Google search yielded a lot of hits....and a lot of ads.... you might be onto something...

There are three companies that I have seen here in the DFW area that only do putting greens. So it seems like it could be a big thing. I think water features would also be a good thing to get into.

If you want to see a bad a$$ water feature, talk to Tim Ryan

David Gretzmier
08-04-2008, 03:40 PM
We do Christmas and Landscape lighting, have 4 very nice maintenance accounts, I have done some deck work and built a couple "pondless" water features this year, some rock/bed construction work, some landscape light service work, some irrigation repair and install, etc. In my market it is a good thing I have been doing landscape/lawn stuff for over 25 years. I really could not feed a family of 6 on just landscape lights in 2008.

I do see a day when that could happen with maybe 5 years of marketing and saturation here. I really don't think my experience is a matter of the economy in general, as I have done 3-4 times the landscape light jobs I did last year, but rather getting the word out to all folks who are in the demographic that buy the landscape light projects. If the landscape light side of my business grows like it did this year, in 5 years this will be a full time for 2 guys "off christmas light season" business. In 8 years it will probably be cutting into my christmas light business and need to be run seperately.

David Gretzmier
08-04-2008, 03:43 PM
oh yeah, I used to own a business with a partner who had paid big bucks for a putting green "franchise". in 3 years we included that fact in catalogs, brochures, web marketing, etc. we sold 1 putting green. I would not count on putting greens to be a revenue creating stream.

Mark B
08-04-2008, 04:03 PM
Well I do backhoe service as well. I do some digging at the local university. They hire me to dig from point A to point B and install 4" conduit. I'm also am looking to go to work for a bigger company. I am alittle worried about winter coming.

INTEGRA Bespoke Lighting
08-04-2008, 06:37 PM
Diversification can eat up a lot of time and capital. Think about it.. for a small operation, do you really have the time and wherewithall to open another business in a complimentary trade (water features etc).

I gave this a lot of thought. And I talk to my advisors about it too.. They helped me focus a lot and have started me down the path of Vertical Integration. This is another way to diversify your business and holdings.

By vertically integrating your business, you are getting involved in multiple layers of the same industry. It is an excellent strategy for sustained growth as well as sheltering you from any downturns.

Do some looking into this yourself before you venture off into a completely different direction.

Best of luck.

Mike M
08-04-2008, 07:08 PM
Okay. Mixed responses.

What I like about the putting greens is the lifestyle and upscale clients. Same demographic as lighting (at least the lighting jobs I'm able to get).

I also like the low cost of entry to the market. I can go to a training session, come back, advertise, and rent the stuff I need per sale. I can install the plants, lighting, and a putting green, all in one project.

That's what I'm getting at. Utilizing the network of people who trust me for design/install of lighting systems to design/install other things they can enjoy.

What the heck is vertical integration? If it's over 24' you can count me out.

INTEGRA Bespoke Lighting
08-04-2008, 07:33 PM
Most businesses you deal with on a daily basis are vertically integrated in some manner Mike. Look into it.

Would you rather be paid one time per transaction or two, three or even four times per transaction?

Have a great day.

David Gretzmier
08-04-2008, 08:31 PM
vertical integration was introduced by carnegie. In his steel business, he figured out he could make alot more money if he owned the iron ore mine, the coal mine to smelt the steel, a railroad,tug boats and trucks to transport to folks that buy it. and I believe he owned a company to build the factories and the equipment to make steel, not sure about that.

I think James may be suggesting building your own lights, and wire and trans, but maybe not. I build my own lights for special applications, but only because I like to build lights and yes, I can do it for less money in materials, but I do spend time to make them. I know that James is on a path to build LED lights, but that may not be for you.

I again do not reccomend putting greens unless you have a a 1 million person market. the demographics are the same as landscape lighting, but more limited, as 95% of your buyers will be either golfers or folks with young children. we had a market of around 300k and sold one. with a full time sales guy strongly suggesting them on every client and perspective client we had.

Mike M
08-04-2008, 09:12 PM
Mike Gambino has Gambino fixtures and Gambino transformers. That, is vertical integration. But you need the numbers to succeed.

My topic of diversifying has to do with the demographic and relationships I am building.

In addition to having the numbers, too much vertical stuff = limitations. A restaurant growing chickens doesn't sell hamburgers.

In fact, the other reason I bring up diversifying a little, has to do with adapting and surviving. Smart investors don't want to expose too much in one sector, so they would consider anything "vertical" to be a little redundant. If the chicken joint has poor sales, so will the chicken farm.

On the other hand, one stop shopping is a big deal these days. In my region, most people didn't grow up here, and their home in this town may not be their only one. They travel a lot, too. So they like to call as few people as possible when they want something. The landscapers here have one model: be everything. The same guy designs/installs plants, irrigation, hardscapes, etc., and also cuts the lawn and services everything.

I don't want to be too generalized, but why not look at some additional and relevant creative design/build concepts to offer my building network of clients and friends? I'm not saying I definitely want to do this or have the resources, but I'm curious what other lawnsite guys are doing for business strategies during this "unspoken" sucky economy?

I ain't ever goin back inside to work under fluorescent lights, that's for shoot sure.

INTEGRA Bespoke Lighting
08-04-2008, 09:38 PM
Actually Mike, MG's "private label" branding is not exactly vertical integration as he has no financial interest in the companies that are producing the products he is using. (as far as I am aware that is.)

Vertical Integration has everything to do with what David G. described... where one company has their finger in the pie at many levels, and receives net proceeds from each and every level in which they are involved.

There are many different ways to achieve this beyond the obvious, and it does not have to pigeon hole you into one transaction scheme. Remember, that each of your operating divisions is ready and able to provide goods and services to a wide range of customers, not just the parent company.

irrig8r
08-04-2008, 09:55 PM
You have to get a feel for your local market, and how you fit into it...

Mine includes a demand for irrigation troubleshooting and renovation, as well as new lighting and lighting maintenance and repairs.

There are other needs I've served in the past, like landscape maintenance, and full landscape installations. Being successful at those requires capital outlay for equipment, access to reasonably priced yard and shop space, day to day HR issues, lots of risk exposure, and planning and performing tasks that at this point in my career tend to bore me.

There's also a lot of cut rate competition, from contractors hiring undocumented workers to those workers starting their own mow-and-blow operations w/o benefit of license, insurance, etc.

The work I perform requires less physical labor and more mental agility and measurable skills of the sort that get better with practice (experience) and so they suit me better at this point in my career.

To drop the irrigation business and focus entirely on lighting would be a stupid move for my situation and experience level in my particular market. I have a reputation to live up to.

My customers have come to expect my abilities to solve their problems in those two main areas: lighting and irrigation. The variety of problem solving tasks I encounter keeps me challenged, interested, and fresh.

If putting greens or water features do it for you, more power to you!

James has some interesting ideas, and I'm sure they work for him.

Lite4
08-05-2008, 03:24 PM
Putting greens are a good source of revenue, but they are difficult to capture. I have installed around 30 or so over the past 6 years. Both the sand filled and sand less varieties. If you thought generating sales was tough for lighting, try putting greens. You may deal with the same 3-4% of the top wage earners like lighting, but you are further excluding yourself to diehard golfers and those with the yard space to install such a feature.
I have been doing some landscaping and waterfeatures to supplement my lighting, but only for the clients I am already doing lighting for now. My business name is fairly new in my area so referral business just isn't there yet. In lean times I don't have a problem with utilizing my other skills to keep bread on the table until things pick up.

Mark B
08-05-2008, 05:05 PM
Well for me I have to do other things. I get bored just doing lighitng or irrigation all the time. I mainly do just irritation repair or lighting work. Then in the summer months when school is out Elon hires me to do underground work. It is fun at times for the change of pace.

I"m sure some will think it is bad to do several different trades, but you do whatever floats your boat.

NightLightingFX
08-05-2008, 05:15 PM
I tried diversifying a little. This is my second year as a Petstop dealer. I really enjoy the work but I have struggled getting enough business. Marketing, and getting the community to know about a new business is hard. My community just doesn't seem to see the value of my Petstop product. I get quite a bit of calls but people don't want to spend $1000 on a product that 100% guarantees thier pet will be safe or thier money back. I don't think that is an unreasonable price. I guess the pet owners in my area are cheapscapes. As far as diversifying, I would only do it if it is something you are passionate about. I personally love animals so I really do enjoy installing and training pets on the petstop system. I also love outdoor lighting. If you love golf and are a golf freak, it might be worth looking into. But if the only reason you want to get into the golf green business is $$$. I don't think it is worth the risk.
~Ned

tdf
09-02-2008, 09:39 PM
I just read you are a PetStop Dealer. I was one of the first 10 nationwide dealers. Man, I blew that opportunity. I had a traditional fence biz and contacted John Purtell about the product and in a week I was on my way to Cincy and in another week I was a dealer with no money paid to start. Petstop is such a great product and I found it easy to sell against the other brands. I just got burned out with all the fencing and let it go. I regret that one big time. Blaine and John are great guys and I wouldn't be suprised if they lead Petstop to becoming the #1 brand in the country.

Sorry for the hijack.

JoeyD
09-03-2008, 12:28 PM
When thinking about Putting greens you should think about synthetic lawns also. They are becoming increasingly popular especially in areas of drought. I know sprinkler guys hate them but they are being installed on more and more yards where peole are tired of constant lawn maintenance.

JohnnyRoyale
09-03-2008, 02:30 PM
Offering a mix of services isn't a bad idea, however, finding the right people to be able to exponentially grow that business model may be a little trickier than you think. That of course depends on how BIG you want your business to get, and who your client is.

For us, operating three different divisions throughout the summer is definitely a balancing act. All three are landscape related, yet very different.

Mike M
09-03-2008, 09:31 PM
Cool--can you tell me more about your divisions?

JohnnyRoyale
09-04-2008, 05:42 AM
During the summer we operate three different divisions,
-commercial/industrial/institutional/municipal groundskeeping and grass cuting,
-commercial/industrial/municipal landscape construction,
-residential inground pools and landscape design/build.

We don't do any residential maintenance.

Aside from that, we rent heavy equipment and dump trucks with operators by the hour to a select short list of clients (plumbers, general contractors, etc) as required, as well as the odd material supply to other fellow landscapers.

We subcontract all of the specialized work, ie: concrete finishing, carpentry, lighting, plumbing, electrical, to a select few quality, proven performers.

Although two of them are landscape construction related, they are quite different and the manpower on each side can't be necessarily switched over, as mindsets, scope of work, details, work conditions, etc are completely different and most employees will typically 'fit' into one, maybe two of the above. I am yet to find one well versed in all divisions of our company.

We originally started as a residential grass cutting operation, and in 13 or so years, we have expanded exponentially to emcompass all of the above-and my two partners and I have done very well.

Today, my (our) priorities have changed, and keeping everything in check is a challenge in itself. I have it in me to simplify things further over the next couple of years and focus only on the municipal/public sector, as thats where I find the easiest type of work to staff, and guaranteed money.

Mike M
09-04-2008, 07:04 AM
Sounds like a very successful business, thanks for the info!

NightLightingFX
09-08-2008, 09:45 PM
Speaking of putting greens, this one I lit-up. The home owner made the putting green himself. The pic is a little blurry. Sometimes I forget to focus and my pic viewer on my camera isn't very good. Alot of times you can't tell how good the pic really is until you take it home and see it on the computer.

The Lighting Geek
09-08-2008, 11:45 PM
You can use a flashlight and light the area so your camera can adjust the focus. Turn the focus to manual and kill the flashlight. Some cameras have hard time focusing in low light levels. I have used this technique when I don't have enough ambient light.

NightLightingFX
09-08-2008, 11:57 PM
I will try the flash light tech. it sounds like a good idea. If I remember to focus I will set my camera on auto focus to focus but like I said sometimes I forget to focus it and then my camera's viewer doesn't always alow me to see if it is out of focus or not. I have to get into the habit of always setting my focus.

bmwsmity
09-09-2008, 10:02 AM
I had to diversify this year....and I should have done it earlier on in the year.

I started doing Irrigation... I didn't really have my heart in it, and I still don't like it as much as lighting, but it's actually kind of fun to me. Maybe that's because I really enjoy the additional knowledge required for design - more of a challenge.

I had always planned on doing irrigation in the future, simply because many of the lighting companies in my area are a combo of irrigation and lighting, and i have many lighting customers who have someone else do their irrigation - too close for comfort to me.

Lighting was just crap for me this year, mostly due to lack of marketing budget and other constraints that limited me.

So far, I've just now completed one install, but have done 6-7 designs and have a good grasp on bidding/design now. I plan to make irrigation a HUGE part of my business next year, if anything to make it possible for me to have a better marketing budget for lighting.

In regards to detracting from lighting...for me it actually helps my lighting, because many of the irrigation leads I've spoken with want lighting as well, so it kind of goes hand in hand... now I understand why so many other companies in my area use this business model...

One other thing to keep in mind guys is to offer maintenance programs. These are great at keeping yourself in front of your current customers - people who are easy to sell more lights to! Additionally, they add consistency to your revenue stream and keep your work looking good for the neighbors to envy. I've really started pushing these programs, and so far I've had a great response.

Good luck to everyone!

Lite4
09-09-2008, 10:16 AM
I managed to get away from landscaping for all of about 2 months before having to pick up a few landscape jobs to keep bread on the table. I may just keep going this way until things turn around. Ned, I am going back up to Montana at the end of Sept. to install a 5600 sq. ft. synthetic putting green if you want to learn how to do them. Let me know, you could come and help put it together.

JoeyD
09-09-2008, 10:20 AM
Sell some Augustas Tim!!!!

http://www.uniquelighting.com/product_pages/AUGUSTA.htm

Lite4
09-09-2008, 10:57 AM
Joey,
I am not dealing directly with the homeowner yet. My brother in law sells and installs the synthetic football fields we all see on saturday and sundays. He also sells synthetic greens and doesn't have the time to get this one installed with his crews as they are spread out across different parts of the country. So he asked if I wanted to do it. So I will be dealing with the homeowner at some point when I get onsite. I am definitely going to try to sell some lighting while I am there. The cups we install for the synthetic greens have a steel sleeve the cup slides into, if there is wire run to each hole can the old cups be taken out of the sleeves and the new ones installed in their place?

JoeyD
09-09-2008, 11:05 AM
It sounds as if it would be really easy to retro fit with the Augusta being that you have an outer sleeve between the cup and the green. The problem with retro fitting these lights usually lies with having to take the old cup/sleeve out and putting a new one in. The cup and sleeve we have is standard diameter so it should just go in and out for you.

Lite4
09-10-2008, 12:58 AM
Thanks Joey,
I will look up the specs on them.