[Olive Branch]

I'm just looking for a little feedback on our company model. We are a Landscape Design and Installation Management Company. We don't own trucks, skids, and tools or employ any laborers. We design projects and then act as the GC for these projects. We also do designs for other landscape installation companies around our area.

We are getting ready to wrap up our 4th year in business and have been growing each year. Although we haven't hit the desired sales we would like, I feel like they are only a few seasons away.

We are one of the only companies in our area that is modeled like this. I know there are plenty of design firms around the country that operate like us and are successful. Can a design and management firm be successful in the midwest?

[Stonehenge]

It's hard to say - we don't do what you do, and I don't know of any in our market that do. But we're in a pretty small, tight market. Not a lot of room for another profit center between the materials and the end use.

But other midwest markets DO have cos that provide this kind of service, so if you're making it work, keep doing what you're doing. Just do more of it.

[ds99ds]

I am in my first year providing a similar service. I have been doing the installations with a temporary catch-as-catch-can crew but lately my marketing efforts have been producing more activity and interest and I have all I can handle meeting clients, writing proposals, designing projects. I'm starting to hire small landscaping firms to do the installation, although I'm still designing, buying the plants, and owning the job. One guy charges $25/hour/man although he is only 21 yrs old. The other guy is a more experienced, successful, by-the-books masonry & landscaping contractor and he will charge me $35/hr/man, but I believe I will get what I'm paying for.

I work in Fairfield county, CT, so this is a very high cost and high priced market.

Can I ask you how profitable you are and why you think that this business model might be insufficient? Seems like you provide a valuable and complete service my designing and managing the installation. I would think (and I am planning for my business) to do the same. I expect to make less profit per job, but I don't have employees or equipment, so I am in fact paying for that convenience in decreased profit. However, I'm still expecting to make 30-35% profit per job.

Any feedback you can provide is appreciated.

David

[Mac]

David, with those labor rates, you should be able to make those margins but as your labor realizes they can hardly make it on those rates, you are going to have to either raise your prices or cut your margins - I think. For your sake, I hope im wrong.

[cklandscapingorlando]

This is very common down here.Alot of guy's do the design but I'm not sure about the gc part.If you find that you need more maybe charge just for the design and maybe a flat fee or % for the job and hand it to a contractor.Hell I wish I had one of you guys throwing work at me.

[Chris Heiler]

I've been operating as an independent designer and general contractor for the last 5 years. It's been going well for me here in Michigan.

There aren't many others in my area that work like me (mostly design/build companies) but I feel like that gives me a big advantage.

[Olive Branch]

It is good to know that I am not alone out there. Currently I have one employee who has a landscape design degree. He handles a lot of the design load and I handle most of the sales and project management. Although I do a fair amount of design work through out the year.

Currently we charge for our designs, our fee is $60/hr and we offer a industry rate to other landscape companies. We would love to gross btwn 50 & 60k in designs. Last year we almost hit 40k but it looks like we will be a little shy of that this year.

Our project management side of things has grown over the past year but we are still short of where we need to be. This year we will gross around 300k in installations. Our profit percentage on most of our jobs is btwn 10 -15%. It is hard to get much more as a gc. As a minimum to keep doing what we are doing we need to gross at least 500k in projects. I don't think this should be to hard to achieve within the next couple of seasons.

We also have a small retail location where we sell, sculpture, pots, furniture etc.

Our overhead is very low since we don't have a bunch of equipment or space to lease. If you have done the math above you can see that these numbers for two employees are very conservative. We do what we do because we love it but it would be nice to get a little more return from it.

I know in service industries like ours it takes time for our customer base to grow. Four years is not very long, I think we just really got going this last year. How long has it taken some of you?

[molson]

i'd love to see your web site and how you're marketing. sounds like you're doing pretty well, congrats.

[Olive Branch]

Our website is OliveBranchOutdoor.com - Home, I thought this was in my profile but it wasn't, sorry. I just added it.

[cklandscapingorlando]

Well if you ever come south I'd love to bid on some of your work.I do most of my own design work but any installs are great.I need to find some guys like you down here.

[molson]

well done. i have in-laws out in the millard neighborhood who are thinking of doing some work... i'll pass your site on.
cheers.

[Inspired]

I would talk to some Licensed General Contractors in your area and see what you can learn from them. My father was a GC for many years and he said 20% was an average gross mark-up on subs.

Additionally, think about raising your base rate. A wise man once told me (no, seriously) if you have few complaints about the quality of your work and yet, you are running out of time, you need to charge more for your time.

I base my fees on 75.00 per hour and there are much better designers then I on this forum. I'll bet you could inch up your rates a bit.

Just my .02

[Nebraska]

Are you continuing to funnel that work to the same few contractors as in the beginning? The same contractors that they themselves, then and now, are struggling to just get by?

[Olive Branch]

We keep a pretty good group of installation contractors around us. We use companies that work well with us and have the resources to get our work accomplished. We do a lot of projects that include a multitude of elements so a company that can handle patios, large walls, large boulder work, plantings etc are good companies for us. I'm not sure if this answers your question.

[Chris Heiler]

Here are a couple of my thoughts and suggestions based on my experience running a company very similiar to yours-

1. I think your current revenue and profit margin suits itself better to only 1 employee versus 2. You're right when you say you need to be doing 40-60K in design and 500K in construction. You have to in order to support 2 people.

2. I looked at your website and judging by your work you should be charging at least $75 per hour right now. You should continue to increase this each year until you are in the $90-100 range and evaluate if the market can bear it.

3. If you want to reach 60K in design, I think you need to raise your standard design fee (like I mentioned above) and slowly transition away from "wholesale" design for other contractors (unless they pay your standard fee). Work for only those that will pay you your fee!!!

4. You said your profit on construction is 10-15%. Is this pure profit? I would aim for a standard 15% pure profit (no less than 12%). For example, if your mason charges you $10,000 for a job, is your markup on that $1,500 or $1,760? Because if you only markup that 10K by $1,500 you are NOT making 15% pure profit.

So basically, raise your rates :-) It looks like you guys are doing good work so this really shouldn't be a problem.

Just my 2 cents anyway...