I see the concept but how does the money work?

Discussion in 'Irrigation' started by FIMCO-MEISTER, Jul 1, 2010.


    Messages: 18,668

  2. SoCalLandscapeMgmt

    SoCalLandscapeMgmt LawnSite Silver Member
    Messages: 2,156

    yeah.... I'm not a master of strategic business plans by any means but I don't see how this guy is going to survive! His clients are only going to see their reductions in the first full year of use.... after that their use should stabalize and remain low.... so unless he gets the savings for the entire first year I don't see how he will make much money!
  3. djt22

    djt22 LawnSite Member
    from Ohio
    Messages: 113

    "Drake said he knew his concept would work because it didn’t require an association to spend $200,000 for the multiple irrigation controllers needed on the property. Instead, his company would give them away at no upfront cost, and his company would make money from the savings on their water bills."

    I could be wrong but in reading this I got the feeling maybe he is being paid for the controller and his services at the end of the year with the money left over in the budget. So if the HOA normally spends $40,000 a year on water and he saved 50%(just for easy numbers) he saved them $20,000 (before he got paid) They then pay him out of the $20,000 he saved and so the first year is not a true $20,000 savings maybe only a $10,000 savings?
  4. SoCalLandscapeMgmt

    SoCalLandscapeMgmt LawnSite Silver Member
    Messages: 2,156

    That's fine... he gets paid for the first year and the cost of the controllers. But what about years 2 through whenever? Somebody has to pay for the airtime and for his signal service. Is he just going to give that away indefinitely after he gets paid for the first year? That's the part that I don't see as being sustainable for the company for the long haul. It's almost like a pyramid scheme.... It will work fine as long as he can bring in new clients every year but what happens when that stops? It's not like he is the only guy with a weather based system out there.
  5. bcg

    bcg LawnSite Bronze Member
    from Tx
    Messages: 1,865

    Maybe it's a free hardware with an x year commitment to his management services at $y per year plus a one time payment of x% of your first year water savings to cover hardware. That would seem doable. He's got to have some ongoing revenue from the sites or it's not worthwhile. If annual management fee is say $5,000 and he saves them $20,000 in water the 1st year then it's a win win.

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