When it comes to offering your irrigation services, where Is the money? When first involved in the business of designing, installing and servicing new irrigation systems, most newcomers focus their attention on new jobs. “Did you hear about that job being tendered for ABC Company? It’s a huge irrigation system with hundreds of sprinkler heads. Boy, would I love to land that one. I’m really going to sharpen my pencil to see if I can get it.”

Is this really where the money is? Do you have the experience required to pull this one off, or for that matter, to qualify to bid? Thankfully for the sake of the irrigation industry and the eventual owner, to bid on a consultant-designed project with exact construction specifications, you need to be an established company that has done similar work, and has certified and trained staff. Let’s get back to where most new players arrive—in the residential installation marketplace. The following scenarios should be an eye-opener on what to expect, and where money is made or lost. The dollar signs indicate the items where you can make money.

Scenario One
Installation of residential irrigation system, including:
Marketing Necessary if one wishes to let people know you are in business. Newcomers usually take out a large Yellow Pages ad that they find they cannot afford during the off months, December through March.

Client This year is already being called a re-bid year, where potential clients are receiving bids, selecting the ones they like and asking for a re-bid to drive the price lower — a bad game to play where only the client wins, and a sure way to work yourself right out of business.

Travel time Charge it! If you don’t, who pays? You do. But when it comes to giving FREE quotations, the norm in residential irrigation, guess who gets to pay for all that time involved in doing quotations? You do!

Site visit One more time—and yes it’s your FREE time that costs you plenty.

Meetings Not again, but oh yeah—you are the proud owner of lost revenue because quoting work costs you.

Walk around Time is on my side, but money is flowing out of my pocket. Hasty sketch Better be hasty—but RIGHT —or you will lose what you don’t even know is lost.

Quotation Finally, you can work out the numbers and submit your quote, along with everyone else, and pray you are the low bid.

Question: If you are the low bid, what do you know that allows you to do the work others cannot, and still make money? Oh — you forgot your labour cost or profit or thought that you needed the work, so just this one time, you would lower your profit. Did the parts distributor lower the cost of materials? I doubt it, and why should he? For that matter, how can you do work for no profit? I can’t, and nor should you.

Wait Did I get it? Did I get it? I sure hope so, because I really need the work — even though it is going to cost you to do the work, because you priced fast and forgot lots. Food lines are looking real good nowadays, if this is how you are going to go after business. The only successful person will be the client. And even he will lose when it comes to service, and he cannot get anyone to service his system because you are out of business.

If successful, you continue with:

Contract Get that contract signed and get your 40 per cent deposit up-front or at least before you start work.

Scheduling Wow, we landed one. Let’s fit him into our tight schedule so we don’t lose him. Remember, over-commit and under-deliver — if you want to go out of business.

Utilities Call One Call or other utility locate service to mark all utilities, so you do not cut through them. Arrange a meeting. Meet and review the findings. If you cut utilities and did not call, who gets to pay? One more time: your full pockets.

Materials Drive to supply house. Spend time selecting all of the materials required to create the new irrigation system. Load them up. Pay for them if you have not already established credit with the supplier. Drive back to the office.

Plumber If you are not connecting to the existing outside hose bib, only done if the water line coming inside to the basement is no larger than the hose bib supply line, usually one-half inch, call in the plumber. Planning on doing your own plumbing inside the client’s house? I hope your insurance company knows you are also a plumber, electrician, engineer, horticulturalist, landscaper and whatever else you offer services for — but are not licensed. It would love to know this so it can cancel your insurance that says you install irrigation systems ONLY! Oh? You didn’t bother to get insurance? Big mistake.

Load trucks Finally, let’s load all the parts, pipe, major irrigation components and everything else on the trucks and get to the job.

Equipment Load the pipe puller ($20,000 for a decent one) on the twin-axle trailer ($2,500 or more), pulled by the 4x4 plow truck ($35,000) which needs to meet all MTO regulations (yellow sticker on truck and trailer, circle-check book, log book, commercial insurance, etc.) before you leave the yard.

Travel time Let’s add this one up. A crew of four (two in each truck), one truck to pull vibratory plow equipment, one van to house all of the parts so we can get at them quickly — to save time — as time is money, right?

Job layout Finally, we fought the traffic because we left after 7 a.m., which took longer than estimated to travel to the jobsite. Who pays? You got it! Your pockets.

Installation Let’s try to make some of that lost time back on the install. You forgot to take your soil probe when you visited the site to give your quotation, and you thought the ground was like the others, and nice and loose. What? Hard packed clay, that now slows down the pipe pulling, dropping pipes as they are being pulled and stretching pipes so pipe that was not priced into the job is being wasted and now costing more, including the extra labour. Bummer — but welcome to irrigation (or as I often call it, IRRITATION).

Parts The worst. That one-inch insert T that costs $.75 is now going to cost you $20 by the time you have to leave the site, fight traffic and go and pick one up. Oh yeah, the slowdown in production because you left the crew alone will cost you — let’s say, $100.

Issues Can it get any worse? You betcha! Your trained staff forgot to fill the hole with expanding hydraulic cement that you drilled below grade into the basement, and tar the hole over to waterproof. Irrigation system has now watered the basement carpets. Your client, who you were hoping to receive a recommendation from, is suing you for damages, including lost time and aggravation to deal with YOUR problem.

Cleanup “What do you mean, you are going to leave my yard looking like this? I don’t want those scars on my lawn and demand you lay new sod.” Didn’t even think this one could happen do you? Well, welcome to IRRITATION.

Schedule You are now fed up and just want off this job that you could not wait to land — for no profit. It is costing you big-time and you just want the losses to stop. You are going to set up the schedule yourself so there are no issues. Think again. You set the wrong a.m. and p.m. setting, so the sprinklers are now coming on during the daytime (in violation of city by-law). Your customer received a $150 fine, and you now need to go back and reschedule the controller and face your more-than-ever ticked off client. The client you had told, “We are professionals and get the job done right the first time.”

Demo More time that you forgot about, and did not price into the job. No wonder you were awarded the job — you were very low, as the other contractors submitting quotes had lots of experience and would never have put in such a low price. Ok, get it over with, and demo the system to the owner. Luckily the guys got it right and it is a good job, so this goes well. Remember to tell them not to touch the scheduling.

Invoicing Residential is to be paid upon receipt of the invoice, at least this is usually the norm. Terms are for commercial work and you take the terms the company that hires you offers.

Collection Hopefully you won’t have any, because everyone is an honest Joe, right? Better think twice on this one. Make sure you have a signed contract and get your deposit cheque before work begins. You did do this, didn’t you? Bummer if you skipped this one, because the client is now fully in the driver’s seat and you might need to lien the project. You did ask and receive a property survey when you did your hasty sketch during your initial, non-paid site visit, didn’t you? If not, it now takes time lawyer time to search for the legal description to be able to lien the property within the 45-day limit.

Shutdown Finally, we can put this system to bed. Did you include the cost of the fall shut-down in your low bid? You did! Now you will not have a revenue stream coming in to help you pay for your year-round marketing bills and all those items that cost you money to be in business.

Warranty Oh yeah, you need to pass along the warranty. Manufacturers give up to five-year warranties on their major irrigation parts, and you did the same thing. You just lost another source of revenue. We have cold weather in the winter — they do not. There is no need to give a warranty longer than two years. The five-year warranty is for you — to help you survive. I hope you put in a contingency for travel time and onsite labour costs to take care of warranty issues.

Scenario two
Service call, existing irrigation system:
Marketing Same as installation. Marketing is always a cost of doing business, that needs to be included in your pricing for your service work — and for that matter, all other revenue-generating work.
Client Same as installation.

Scheduling Same as installation

Materials Same as installation

Load trucks Same as installation

Travel time We get to charge to drive from the office to the site and back, if you have created this form of service charge.

Service work We are in it for the money, and this hourly rate needs to make you money, or once more, you will price yourself out of business — so work this one out properly and do not miss anything.

Invoicing A necessary evil of doing business that costs, but at least it gets you your money. Collection If you do your work well, you might have only a few issues from working with the wrong type of client.

Shutdown Shutdown in not part of your contracting work, and can be sold as a service contract, so you make money during the no-income months (if you do irrigation only, which is getting harder to do and survive).

Warranty Offer a two-year warranty for parts, and one year on labour, and you are in the money again. If equipment fails, it will need to be replaced and your parts are priced at list or more, so you make money in most cases.

Lorne Haveruk is an Ontario-based water resource consultant, irrigation designer, author, speaker and educator