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Why not do installs?

OKSooner

LawnSite Member
Location
Oklahoma
I've been doing irrigation repairs for three years now and I've had more than a couple of guys who seemed to know what they were talking about tell me to keep doing repairs and service, and that only - and not do design/install work.

My question is... Now that I've got some hands-on experience, why not start small (at my house) and begin doing some installs? I've had several people ask if I do installs and I've referred them to a guy who does good work.

Just for the record, I live in a State that doesn't have any licensing requirements... yet.

Comments invited.

Thanks. :usflag:
 

DanaMac

LawnSite Fanatic
I've done three installs since 2002. I prefer to do just the service and repairs. Overhead is lower. I feel that net profits can be higher due to less employees, and less equipment. With installs I believe there are more companies that will underbid each other to get the job. I see less competition in the service area. I also think injuries are lower on the service side as we're not dealing with trenchers, pullers/plows, tampers, trailers, etc. Service is SO much easier physically than installs.

If you can get a high end rate for the installs, maybe it outweighs everything. but if you're in the mid range price wise, and just another installer, then I don't think it's worth it.
 

bcg

LawnSite Bronze Member
Location
Tx
I think Fimco once said something to the effect that most systems are installed to the lowest price point using the cheapest materials available and that it's the service guy that gets to, over time, turn that poor system into a watering marvel. What he left out was that the service guy also gets to charge probably 3x what the original install cost was for the work done to make it right, plus he still gets the regular repair revenue.

Service is easier and more profitable unless you can charge $1500 - $2000 a zone. In Tx, you're luckey to get $1500 for a full 6 zone system. I imagine Ok is probably the same so why kill yourself for less?
 

mitchgo

LawnSite Gold Member
Location
Redmond, WA
I think it is good to do installs. We mostly do service.. Maybe 10 installs a year
I think it's good for your crew and tech's to help them be reminded on grasping the concept of sprinkler systems..

Anyone can repair a broken sprinkler head... Not everyone can design a zone properly.
 

Stuttering Stan

LawnSite Bronze Member
I'm in favor of doing both install and service. When a potential customer thinks of irrigation, you want them to remember your company for ANYTHING irrigation related. Whether it be repair or new install.
Have you ever seen a HVAC company do heat but not coolong?
 

DanaMac

LawnSite Fanatic
Have you ever seen a HVAC company do heat but not coolong?
I have seen HVAC companies do just service and no installs though. There's plenty of work around for it.

The only time my company has time to do installs, is half of August and all of September. That's the only time I will consider it. And even then it's not a cheap price. Even if we are dead with work. And honestly, I had 4 calls for installs last year. Two I gave bids for in March and April. Funny thing is I didn't get either one, but I got the winterization for one of them.
 
I'm in favor of doing both install and service. When a potential customer thinks of irrigation, you want them to remember your company for ANYTHING irrigation related. Whether it be repair or new install.
Have you ever seen a HVAC company do heat but not coolong?
Just don't take a pay cut. If you have all the service you want then save the installs for winter. I don't think most installers sit down and figure out the real math on their install net profits because if they did they wouldn't be installing them at the prices I'm hearing about. I guess if you stay busy enough at installs you can keep your head buried in a trench ostrich style.
 

Waterlogged

LawnSite Senior Member
Location
Texas
It really depends on where you are, what your market is like. I would put a pencil to it before you do an install. Some ideas to consider are:

In an average year in Texas we work 222 days/yr. You need to add up your overhead and divide it by the 222. That will give you per day overhead costs.

Many guys shoot for 1/3 parts cost, 1/3 labor, overhead and 1/3 profit as an overall, general framework when you are pricing an install. You usually don't want your profit to be under $500/day. I don't think profit should include your personal labor costs.

Length of install is a big factor. If it takes you four days to install a job that should take you two, you will lose your shirt. You are probably trenching, I know the guys up north can pull it in a day.

So compare the service profit figures with the estimated install profit figures and see how it looks.

I highly recommend that you take some classes on hydraulics and design before you do an install. It's actually more technical than it looks.

And the guys that are telling you not to do installs, are they doing installs :confused:

That's just my two cents. :)
 

bcg

LawnSite Bronze Member
Location
Tx
When you work it out, it's really hard to justify unless you can get a premium price. One guy in a service truck with a remote can easily average $1,000/day in gross. Figure that at most, $300 of that will be materials, $200 will be his pay, maybe another $100 in misc overhead costs and you've got $400/day in gross profit off one guy.

To knock out an average lot in a day doing an install, it's going to take 4 - 6 guys trenching it. If I got $2500 for that (and that would be pushing it here), you figure probably $1000 in material, $700 in labor, maybe $200 in other misc overhead costs and I've got a gross profit of $600 and a job I had to babysit all day.

Looking at it that way, which would you rather do, have 2, 3 or 4 service trucks with 1 guy each making $400/day in gross profit or 2, 3 or 4 install crews with an average of 5 guys each making $600/day in gross profit (or $120/worker in gross profit)? There will be a lot fewer headaches with the service guys and they are a lot more profitable per worker. To me, it's a no brainer.

If I can get an install job for my price, I'll do it but I'm not going to go looking for that work.
 

ARGOS

LawnSite Silver Member
I am working diligently to be purely T&M on installs. It is possible. I have a good friend that is a general contractor building homes on T&M. Forget commercial and spec homes. Affluent customers and a good reputation is what it takes.

Removes the guess work of service versus install.
 
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