Turf Magazine - April, 2014

NORTH FEATURES

Talk About Diversification!

Pennsylvania entrepreneur adds landscape services to her rental business
By J.F. Pirro


Michelle O'Donnell, center, owner of 82 Rents and Services, with her team.
Photos by Keith A. Muccilli/Keith Muccilli Photography, LLC.

In Michelle L. O'Donnell's mind, it's simple: Bigger is not better. She says that her southeastern Pa.-based company, 82 Rents and Services, Inc., does not benchmark others. It benchmarks itself.

"If we're making money and our employees are happy and our customers are happy, that's all I need," says O'Donnell. "That's what every business should be about, making sure all your employees have jobs. Knock on wood (and she does), we've stayed the course. If you're grounded and you know your direction and have a plan to stay on course, you're fine. You can't be all things to all people."

82 Rents was founded in 1999 as a construction equipment rental, service and sales company servicing portions of Pennsylvania, New Jersey and Maryland. In 2004, the company expanded to party rentals and event planning. In 2008, when the economy started to fall apart in construction, it diversified to focus less on construction rental and more on landscape construction services and, more recently, on maintenance, as well.

82 Rents has 15 full-time and six part-time seasonal employees. About 65 percent of the company's business is commercial landscape construction. The focus is on federal and state work. About 35 percent of its business is landscape maintenance, residential and commercial.

82 Rents and Services, Inc.

Owner: Michelle L. O'Donnell

Founded: 1999

Headquarters: Chester Springs Pa.

Markets: Tri-state area, primarily focusing on a 100-mile radius

Services: Commercial landscape and lawn maintenance services

Employees:15 Full Time, 6 part time

Website: http://www.82rents.com

82 Rents is, O'Donnell admits, an awkward name for the type of company her company has evolved into - and she admits she has struggled with it. But she's sticking with it because the company maintains a smaller equipment rental business. The name has been around long enough to be recognizable in her market. There's no plan to change the company name, although she says she may add a catchy tagline.

Also, she does not plan to move again.

"The future is here. This is a good location," she says of Chester Springs, Pa., an affluent unincorporated community in Chester County about 30 miles northwest of Philadelphia. 82 Rents moved from nearby Elverson in July 2013 to address what O'Donnell says is the biggest challenge for any landscape company: having the right shop space and organized shop space.

Her company is now sited on prime Pa. Route 100 frontage midway between Pottstown and Dowingtown. The company's previous site on Route 82 (hence the company name) was much smaller than the current one. She purchased just over 6 acres along Rt. 100, and sited her company on 3 acres. A wholesale landscape business rents a portion of the property. A flagstone contractor is considering renting another portion.

"You don't need a showy office, but it has to be organized and efficient shop space. If your space is not organized, that's wasted money," says O'Donnell. "It's cost-effective in the long run to have space that meets your needs. If you have too much space, then you fill it with stuff you don't need."

Making the transition

Formerly a Husqvarna dealer, O'Donnell wasn't bashful about asking rental customers questions about their businesses. What she learned piqued her interest in landscaping. She learned that some successful landscapers had started in careers unrelated to turf and landscape management. One customer had been an account and another customer had been a school teacher, she recalls.

That encouraged her to look more closely at career possibilities within the landscape industry even though this was a big switch from her previous careers.

Earlier in her life, she worked in the healthcare industry. Relying on what she learned in earning an executive MBA from Drexel University, she served as a regional vice president, managed hospital, nursing home and retirement complex kitchens. The experience drilled home the importance of safety, which has been a main consideration for her ever since. She stressed safety even in her rental business.



Liz Kulp, landscape project manager, Marvin Colona, estimator, and Rob Leighton, general manager, work on a project for one of their clients.

"We have never had a piece of equipment fall off a trailer. There were times when I wouldn't rent a chain saw to a customer. Safety, safety, safety," she says.

Initially, 82 Rents had a couple of partners, including O'Donnell's husband, Sean, though he was a silent partner. She purchased the company outright in September 2001.

Largely because of the 2008-2009 Recession she ditched the rollers, pavers and other large pieces of construction equipment, but kept the landscape-oriented equipment.

"The construction rental equipment business is capital intensive. I either had to add $1 million in metal or be out of the business. But I didn't totally want to be out of the business," she says.

O'Donnell took a look at existing contracts and work she was already doing in public sector landscaping, work for the Pennsylvania Department of Transportation, for example, and other municipalities, and saw an opportunity for growth. Many of the new clients were former longtime rental customers. She was already familiar with the bidding wars for such jobs and also working with highly regulated entities from her healthcare days.

In 2012, she bought a small 10-year-old lawn maintenance company based in Boyertown that had been owned by two teachers and her current general manager, Rob Leighton.

Last year, contracts with 30 residential customers, everyone from high-end 20- or 30-acre farmettes to community HOAs, was busy enough to bring in $680,000 in lawn business on top of the nearly $1 million in construction landscaping, equipment and a still-active party rental business.

Lack of business sense keeps many business owners from being successful, says O'Donnell. This includes not knowing, or understanding, costs, she adds.

"We zero-base every job, and still someone will tell me that the guy down the street (a competitor) is charging $100 for the same job, so we should charge $100. We're going to charge $110 because if we don't we may be out of business. Longevity."

No gimmicks

Some people have a strong work ethic and some people don't, she says. A strong-willed Italian father who founded and ran a small business shaped her work ethic. It also came from being the oldest child in the family and from having worked since she was 12, selling hot dogs at a gas station in Phoenixville outside of Kimberton where she grew up. She rode her bike 8 miles just to get to the gas station. Then, she worked in the restaurant business. Early on, she learned the value of money, and that all businesses are about people (customers and employees), time and money.

She's convinced that success also comes from being balanced, from continually trying to succeed, but also from appreciating the success you do finally achieve.

O'Donnell's business philosophy is "slow and steady. It's about hitting a lot of singles, not home runs." While the economy is forcing her to run as lean an operation as he can, she says her compavny continues to grow as everyone on her team "buys into our model."

A key part of that model is service diversification.

When she chatted with landscape contractors who were renting equipment from her she learned that many of them specialized in a single service, such as paver installations, walls or lawn service.

"But what happens if that market goes away?" she asks. "Then, they have to scramble. I've always said that you shouldn't have all your eggs in one basket."

The diversity, O'Donnell also professes, allows her to have an ever-present carrot to dangle in front of her employees. The carrot is upward mobility. One of her employees might start in the residential lawn service side, but there is always the opportunity to move into the commercial side, to use bigger equipment or to make more money.

Diverse exposure also helps bring in business. "I like for someone to see our trucks at a lawn job we're doing at a development up the street, and then to see we do party rentals, too," O'Donnell says. "Then maybe later they'll have a patio for us to add on, too."

Most of the landscape construction work is in soil erosion contracts, mostly for the state, and mostly filtration sock jobs, including, for example, a recent 2-mile filtration sock. Filled with compost and mulch, those materials come from the business next door, Sweetwater.



Michelle O'Donnell, left, with Diane Grejdus, bookkeeper. O'Donnell says, "you don't need a showy office, but it has to be organized and efficient."

There's also Pennsylvania streetscape work in recent towns like Phoenixville and Jenkintown, and even a recent acquisition of four of 12 sections of the borough of Pottstown to maintain. Each section was a line item specification-job.

82 Rents' own municipality, Upper Uwchlan Township, was also expected to bid out property maintenance this year. "They have figured out that it's cheaper to seek a local bid than to do it themselves," O'Donnell says.

All government work is lowest-bid, and it also helps that she's certified Women Business Enterprise (WBE) in case a certain job has a mandate on it for minority hires, and women in the turf and landscape business are still minorities, though a growing minority.

She's remains up to date on the Penn DOT's specification manuals and frequent supplements, which have more pages that it's even worth trying to count. "They even tell me how to sneeze," O'Donnell jokes as she pages through one manual on a nearby desk. "It's part of the business, though, and we like to do things by the book."

The author is an experienced reporter and writer who lives in Quakertown, Pa. Contact him at jfpirro@enter.net.