Turf Magazine - May, 2013

FEATURES

Boulders, Mosquitoes and Other Opportunities

Novel and newer property management services expand the industry's possibilities
By Ron Hall


NaturaLawn of America is the most established company in the United States offering what it describes as organic-based lawn care. Founded in 1987, it has units in 23 states.
PHOTO COURTESY NATURALAWN OF AMERICA.

As the landscape and lawn care industries evolve, many company owners are seeking new services and new products to offer their clients. Their goal is twofold: to differentiate their companies from competitors and, also, to grow revenues.

Simultaneously, other entrepreneurs are rolling out and promoting franchises and business systems targeted to landscape companies. These include both established companies and startups, too. In some cases, these service offerings don't fit the picture most of us have of traditional landscaping or lawn care. For want of a better phrase, let's call them "non-mainstream" opportunities. They stretch the scope of outside property management beyond the arena of landscaping or lawn care - and, for the majority of owners, too far to be seriously considered. For example, Turf reported on in its December 2012 issue on a Connecticut-based company, We Do Lines, which offers parking lot striping franchises.

This past year we also reported on Philadelphia-area entrepreneur Josh Skolnick, founder of Monster Tree Service, a tree service franchise company. Mark Elson, director of franchise development, explained that franchisees receive five days of training, much of it focusing on business management, operations and recruiting and training responsible tree technicians.

"Our system is really geared to helping people who do not have any tree experience to learn the right way to produce and market work efficiently and still provide great service," he added.

Boulder Designs

When Eldean Bergman and his wife, Vickie, stayed at a campground at the Loretta Lynn Ranch during the 2010 Labor Day weekend, Bergman came prepared with a computer-generated image of a boulder honoring Lynn. Bergman is the owner of Boulder Designs and he and his wife are huge country music fans.

When the couple showed the image of the boulder they had generated to Lynn's manager, he immediately ordered it for Lynn's Museum - provided that Bergman could deliver it by Sept. 22 for a celebration honoring Lynn's 50 years in show business.

No problem.

Just over two weeks later the couple returned to Tennessee with the 5,000-pound boulder, which they temporarily placed near the stage for Lynn's public concert. It was a huge hit with Lynn and the overflow concert audience.

Boulder Designs is the newer of two franchise businesses founded and owned by Bergman, a spinoff of the Border Magic franchise, which he started in 1992. Border Magic is the "only franchised company in the United States that specializes in decorative landscape edging." He began offering Boulder Designs franchises in 2008 after seven years of research and development. Both companies are based in Rantoul, a city of about 13,000 in east central Illinois.

"We realized that Border Magic is an outside business and that our customers needed something that they can do inside in the winter to make money. That's when we came up with the idea of making these rocks," said Bergman. "At first we began offering little address rocks, that were only 150 to 200 pounds. But, we were surprised about how fast it took off, and we quickly learned that a lot of people wanted bigger rocks."

He also learned that landscape company owners were getting very good at selling the decorative concrete boulders that their employees could easily manufacture in their shops during short workdays or when weather didn't allow outside work.



Boulder Designs trains franchisees to manufacture boulders of any shape, size and with any graphic elements. Founder Eldean Bergman says it's something landscapers can do when they can't work outside.
PHOTO COURTESY BOULDER DESIGNS.

"It fit so perfectly with what I was doing and what I was looking for," said Robert Campbell, Apple Lawn Service, Crescent, Pa. "It's an inside business and my other businesses are outside businesses. In the winter when it doesn't snow and we're not doing snow, we can be inside making boulders. The same goes in the summer. When we would get three days of rain we would be hurting, but now we're working inside."

Campbell, who acquired a Boulder Designs franchise two years ago, converted 3,000 square feet of his 7,000-square-foot warehouse to boulder manufacturing. He said his employees quickly learned how to produce the enhanced concrete boulders - the small "cash-and-carry" ones and the larger ones, too.

He said initially he thought the boulders would be attractive mostly to his more affluent clients, but soon discovered that the appeal was much greater than that.

He said it generally takes about two to four weeks after receiving an order to manufacture and deliver a boulder. Much of that time is devoted to working with clients to produce exactly what they want in terms of shape, size and graphic elements. The manufacturing process, using materials purchased locally along with the special additives and processing equipment provided by the franchisor, can be as little as three or four hours for a smaller boulder to an entire day for a larger boulder.

Break Out The Checkbook

Buying a franchise is not something you decide on the spur of the moment and without proper due diligence. While there's a lot to consider before signing on that dotted line, the first question you're going to ask is the most obvious: "How much is it going to cost?" Start by considering this short list of costs involved in starting a franchise:

1. Initial investment fees: These fees typically cover the cost of training, support and site selection and territory protection. Investigate exactly what you will be getting from the franchisor for your fee.

2. Startup costs: These costs can vary significantly depending on what you're going to need in terms of available equipment, vehicles, office equipment and other typical items necessary for running a legitimate business. Find out if a new computer and software requirements are part of the franchise fee. If not, that's another cost.

3. Royalty fees: Established franchisors spend considerable time, effort and money building and maintaining their brands in the market. As franchisees benefit from this, they're expected to contribute financially. The royalty fee (usually in the 4 to 5 percent range in the green industry) often also covers support, including, in many cases, a certain level of administrative support.

4. Inventory and supplies: Again, this will vary depending on the service you will be delivering. You may need to buy new equipment, such as mowers, trimmers and edgers; or products such as fertilizers and pest controls in the case of lawn care. Be aware that you'll need to keep some extra supplies and parts on-hand in case of equipment breakdowns or other unexpected events.

5. Working capital: You will need a certain amount of day-to-day cash necessary to run your franchise. You need enough working capital to at least cover the time it takes to get it operational and generating sufficient cash to keep it going. Established green industry franchisors have good numbers to share with serious prospects.

"Boulder Designs can be a standalone business or a separate service within an established company. It's a perfect match for landscape companies," said Bergman. "They'll find out that they can make them whatever people want them to be and their customers love these rocks. It's a definite wow factor."

Building upon the initial success of the enhanced concrete rocks, Boulder Designs has since expanded its product offerings to include signage, benches, mailboxes and other enhanced concrete landscape products.

Boulder Designs was named as one of the top franchises in franchisee satisfaction by Franchise Business Review in 2013, and was also recognized by Entrepreneur magazine in its 2013 list of top franchises.

Eco-friendly lawn care

When all's said and done about eco-friendly lawn care service, more is said than done. Lawn care companies offering bio-rational pest controls and natural fertilizers as the primary components of their services still comprise less than 10 percent of the U.S. lawn application market. But, given the multi-billion-dollar size of the lawn care market, that's still a nice chunk of change. Demand for non-traditional lawn service continues to grow, albeit slowly.

NaturaLawn of America, based in Frederick, Md., is the best-known and most established company in organic-based/biological lawn care. The franchise company, which also sells organic products, has 65 service locations in 23 states. Founded in 1987, it's not too much of a stretch to label NaturaLawn of America as the pioneer of that segment of the lawn care market.

"In five years alone, NaturaLawn of America reduced the usage of petroleum-based fertilizers by over 12.5 million pounds and prevented over 5 million gallons of petroleum-based pesticides from entering into our environment as compared to traditional chemical lawn care," the company's website claims.

A more recent entry into the sustainable lawn care space is Bio Green USA promoting its "all-natural, bio-based fertilizer products" to independent service providers through a licensing agreement, rather than a franchising. The company offers training, ongoing support and protected territories, but does not charge license fees or collect royalties. Instead, service providers must purchase all fertilizer products from Bio Green USA, Inc. The fertilizer products are manufactured in the firm's Kearney, Neb., facility.

"We have what would be similar to a franchise except we don't charge anything to become a Bio Green licensee. We also co-brand with companies so that they don't have to change their existing image," said Founder John Perry, the owner of a lawn care company who began manufacturing the products in 2007. The company's manufacturing facility is in Kearney, Neb.

Mosquito spraying

Mosquito spraying might be an add-on service opportunity for companies that make several visits to customers' properties each growing season. Presently, there are at least three companies - Mosquito Authority, Mosquito Squad and Mosquito Joe - offering mosquito control franchises. Mosquito Joe is the newest. Founded in 2009 in Virginia Beach, Va., CEO Kevin Wilson said he began selling franchises in November 2012 and, as of mid-spring, had nine locations primed for the 2013 season with an additional 15 in the works for 2013.

Learning to provide a mosquito control business is a four-day process. "It's intensive; we just had a group go through the process and they were beat by the end," said Wilson. Training includes business development, technical and product information, certification, customer relations, software use, "and then we move into the field where we accompany a company technician on a property," said Wilson. The training also involves hands-on instruction in using the equipment and products.

Wilson said that property owners are receptive to the service because they realize that mosquitoes, apart from being a backyard nuisance, are a serious health hazard, too. He alluded to the 5,000 cases of mosquito-born West Nile Virus resulting in more than 200 deaths in the United States annually.

Wilson explained, "We're not here to scare people, but the truth is that the spraying by municipalities in spring and summer doesn't do a great deal of good on the homeowners property because mosquitoes usually only travel about 150 feet from where they hatch. Our chemicals are safe and attach to foliage for longer-term effectiveness; as the larva grow and consume the treated foliage our application continues to rid the area of pests. We'll re-spray when necessary, but that happens less than 1 percent of the time."



Mosquito Joe techs spray properties about every 21 days when conditions are favorable for mosquitoes. Clients are advised of the next application date via email.
PHOTO COURTESY MOSQUITO JOE.

The Mosquito Joe techs spray every 21 days during the season when the high-temperature hits or exceeds 55 degrees. As the next application date approaches, an email is sent as a follow-up advising the client of the next service. There's no contract; however, the company claims a high customer retention rate because its service is so effective.

The Pros and Cons of a Franchise

  • For some individuals, a franchise is probably the best way to enter an industry. It may also be a good way to add a new service to an existing business. Here are some of the advantages you can expect when buying a franchise:
  • Systems approach: Most franchisors offer proven systems for operating the business and generating profits. This is attractive to individuals who lack sales and marketing skills and realize they need help in building and managing operational systems.
  • Support: Being able to learn from others is hugely important in business. Small company owners often have little or no access to other individuals with business smarts. Most franchises offer business support and encourage networking and sharing among franchise holders.
  • Brand name: It's difficult to put a dollars-and-cents value to an established, well-known brand, but it's a considerable in most markets. It's a proven aid in acquiring customers.
  • Better deals on equipment and materials: In general, a franchise group can command price reductions on equipment and material purchases. The larger the franchise group, the more bargaining power it has with suppliers.
  • Easier recruiting: While it's not always the case, in many cases, a franchise business with a recognized name will be more recognizable to jobseekers than a lesser-known business.

Not everyone is cut out to be a franchisee. Nobody, including a franchisor, can promise success. A franchise will work for you only if you go into it willing to take responsibility for your own success. The franchise company provides what amounts to a business blueprint, some training and the agreed-upon support, but, ultimately it's up to the franchise owner's willingness to work hard and follow the plan that results in success. With those caveats in mind, let's look at some of the aspects of franchising that some people don't like.

  • Less freedom: Independent business owners call their own shots. That's why they got into business in the first place. Franchisees must share financial information and conform to uniform operating procedures.
  • Royalty fees: Every year franchisees make royalty payments. This pays for business and operational support, marketing and the right to use the recognized brand.
  • Higher start-up costs: Many successful and profitable landscapes companies start with little more than a truck and a mower. In fact, many industry leaders started that way. Uncounted others, however, failed because of lack of business knowledge.
  • Promises, promises: The level of training and support offered by franchises varies among companies, and if what the franchisor is offering seems unrealistically optimistic, dig deeper. Again, nobody can promise a new business owner success. Also, talk with franchisees before signing on the dotted line.

Ron Hall is editor-in-chief of Turf magazine. Contact him at rhall@mrpllc.com. Mike Ingles, a freelance writer based in Columbus, Ohio, also contributed to this report.