Evolving Market ... Evolving Business

When Gary Mallory and three of his buddies launched a sprinkler company in 1973, little did they know that 35 years later the water supply in Albuquerque would be an issue. Little did they know that homeowners would be receiving “credits” for converting lawns to Xeriscape—the same lawns in which they were installing sprinkler systems.

Hindsight is 20/20, yet it’s opportune that the owners of Heads Up Landscape Contractors Inc. kept their eyes on the market and transitioned with it. Eight years after installing and repairing sprinkler systems, the company started offering landscape installation services. A few years later, it offered maintenance services to its customers. Today, Heads Up generates 70% of its $26 million in annual revenue from commercial installation projects and 30% from commercial maintenance accounts. The five-year plan is to even out the two service offerings.

“To say that we’ve changed our focus over the years is an understatement,” says company president Mallory, who has since bought out all his partners. “We still install and maintain irrigation systems for the landscapes we install, but even these systems have changed dramatically. New control technology plays an important role in controlling water usage, as does drip irrigation. Company-wide, we’re also spending more time educating our clients about changing their watering habits. For example, just resetting timers can save a half billion gallons of water a month in the city. That’s a lot of water, especially for an area that receives only eight inches a year from an average of 18 rain events.”

NEVER BORING

Mallory says he’s had a great career, and is happy that he and his three friends decided to go to work for themselves. “One thing is for sure,” he adds, “I haven’t been bored.” And there are plenty of challenges remaining to keep this owner and his management team occupied. That, too, is an understatement. The company goal to aggressively grow maintenance comes at a time when the H-2B program is in question, the economy is sluggish, and maintenance practices themselves are in transition to care for native landscapes.

“In maintenance, one of the biggest challenges is to find the people to get the job done,” Mallory emphasizes. “We’ve been relying on the guest worker program, and last year we had 100 H-2B employees. This year, their availability was questionable until late in the season, and who knows about next year. Our aggressive growth strategy in maintenance depends in large part on the availability of a reliable labor supply.”

One of the reasons Heads Up is targeting maintenance is because the service is, as Mallory puts it, “recession proof.” Unfortunately, companies aren’t so lucky. As this owner notes, the cost of everything—not only fuel but also irrigation pipe, fertilizer and anything else that is petroleum-based—has risen dramatically, just as the housing market is putting on the brakes. “We are in a market that is impacted by inflation while leaning toward a recession,” says Mallory. “Owners need to be creative and proactive to be profitable.”

Heads Up meets the challenge in several ways. The company now leases some of the larger equipment such as skid-steer loaders, tractors and trucks, and continually looks for ways to improve productivity. “In an effort to save time, we’re practicing lean management principles,” says Eric Spalsbury, maintenance account management supervisor. While driving around the yard, he points out several stations where maintenance crews load equipment, fuel up and resupply before heading into the field. Each of the stations has specific instructions detailing procedures.

“One of the first areas we targeted with ‘lean’ was the traffic pattern around our yard,” Spalsbury explains. “Just by rearranging stations and altering driving habits, we have saved 15 minutes per crewmember per day. With 22 maintenance crews, that adds up quickly.”