EarthWorks is working a most successful niche by targeting the Dallas-Fort Worth Metroplex’s largest and most opulent multifamily rental properties, including the luxury apartment complexes of Camden, Greystone and Zom. A full 85 percent of the company’s revenue comes from the maintenance and upgrade of these and other prestigious properties.
While most landscapers employ active sales teams and hard-hitting direct mail and social media campaigns to capture their market share, EarthWorks’ efforts in this realm are nil. Instead, the company focuses on some alternative marketing tactics that seem to be working well.
“We don’t have a single sales rep out there,” says Chris Lee, president of EarthWorks, who oversees all of the company’s operations. “With the commercial market, it’s all about word-of-mouth to obtain referrals, so we are actively involved with associations and community service projects that attract multifamily property management and other commercial real estate companies.”
EarthWorks also believes that a knowledgeable customer is a better partner who is also capable of spending more money when the timing is right. So the company offers customer education through free in-house classes in key areas such as landscape maintenance and budgeting, water conservation, irrigation systems and repair, as well as xeriscaping.
The company also provides its clients with complimentary landscape audits of potential property acquisitions and conceptual budgeting for on-site managers to further loyalties when it comes to bidding or rebidding. “We are now providing more and more consulting services,” says Lee. “We advise on landscaping due diligence, providing our clients with an estimated budget on what it takes to re-landscape. It helps them renegotiate on the assets. By offering this service to our core clients, we end up with a significant amount of work when it comes to new or rebids. For others, we provide this service for an hourly rate and with an option to offset it if we get their contract.”
Adding services to add revenue
Lee’s stepfather, Mark Chaffin, who still heads up special projects and facilities upgrades, started EarthWorks in 1979. Lee’s mother became chief accountant and continues in that role today. She also got her irrigation license and started the company’s growing irrigation division. Lee began working at the company 14 years ago, relocating to north Texas from Idaho, where he managed sales and operations at a new car dealership.
After joining EarthWorks, Lee added installation services to allow the company to move into bigger rehabs. He also purchased a small tree company to add tree installation, trimming and removal, as well as stump grinding services. The services now generate an average revenue of $45,000 per year.
Although north Texas has been cushioned from the downturned economy, it hasn’t been immune. “Over the past few years, new construction has slowed down, but here in Dallas it hasn’t stopped,” explains Lee. “Some of our clients experienced bankruptcies and foreclosures, but starting early last year our healthier clients have started spending capital money.”
Lee says it’s not uncommon now for investors to come in and buy a 40-year-old C-grade complex, converting it into an A-grade property. “They will borrow money to redesign it,” he says. “It can cost them $2 to $3 million to raise their residential profile, and landscaping will get a piece of that.”
To capitalize on this trend, EarthWorks partners with construction companies by providing landscape architecture services to make property upgrades, including entry updates, pool installations, and drainage and grading corrections. “Last year, we hired a landscape architect to design large-scale projects rather than working off blueprints handed to us by our clients,” says Lee. “We can draw up visualizations of projects and present them to investors. It’s a much more professional proposal.”
Cutting costs with sustainability measures
Like many landscapers, EarthWorks saw its revenues tumble starting mid-2008 through 2009, when it hit the low point of $10.8 million. Revenues rebounded to $14.5 million in 2011, reflecting a 30 percent growth.
That was attributed in part to cost-saving measures. The company now has two facilities where crews can save on fuel and work time by operating closer to assigned properties, whether in the north or south sectors of the metroplex. The first facility is located in Alvarado, a housing administration with a recent 2,500-square-foot expansion; the second is near the DFW Airport in Irving.
In the past, EarthWorks leased its fleet, but now it owns all its vehicles. Lee found too many hidden fees were built into the lease rate and realized he could borrow money a lot cheaper from the bank through direct purchasing.
Sustainability measures are also saving EarthWorks money. The company is converting its gas mowers to propane. Gas prices peak in the summer when crews are out doing the bulk of the work; yet, it’s reversed with propane, when prices peak in winter. “We like what we are seeing so far,” says Lee. “There is considerable cost savings as well as being a much cleaner fuel.”
EarthWorks is also recycling tree trimmings and grass clippings. It has contracted with a company that grinds waste into mulch that is then bagged and sold. The company also uses reusable canvas bags for all yard waste.
The biggest challenge left for EarthWorks, according to Lee, is the prolonged Texas drought. “Even though we’ve had recent good rains, we just lived through the hottest and driest summer ever recorded,” he notes. “There are severe watering restrictions in place. Now that standard typical vegetation is drying out, we are taking this opportunity to learn and then teach our clients about alternative native vegetation through xeriscaping and using smart irrigation.”
President: Chris Lee
Headquarters: Alvarado, Texas
Markets: Dallas-Fort Worth Metroplex, Texas
Services: Maintenance; installation; tree trimming and removal; and irrigation and repair
Employees: 300 peak season, 175 year-round