Profits in Turf and Pavement

Tony and Wendy Miller started from scratch EA Outdoor Services, LLC, which offers landscape construction, maintenance and snow removal. The Millers eventually leveraged that successful business to start EA Asphalt Services (and the related EA Trucking). They run their three businesses from the company headquarters in Greenfield, IN, and branches in Indianapolis, IN, and Fort Wayne, IN, serving properties and property management firms throughout seven states: Indiana, Illinois, Iowa, Kentucky, Michigan, Missouri and Ohio.

EA Outdoor Services, run by Tony, has just under 100 employees who generate $4 million in snow removal, $3 million in landscape construction, $2 million in landscape maintenance, and $1 million for landscape upselling including plant replacement.

EA Asphalt Services, run by Wendy, employs roughly 20 people who generate $4 million in pavement construction-related sales including mill and fill overlays, concrete flatwork, patching and new paving, and an additional $2.5 million in pavement maintenance services including striping, sealcoating and cracksealing.

Both businesses focus only on commercial work, and employees from one company do not cross over to the other except for snow removal services.

Asphalt roots in landscaping

Tony Miller says his landscape company's big break came in 2008 when a property owner that hired them to handle all Indiana locations asked them to take on landscaping and snow removal for all of its locations in the six surrounding states plus Wisconsin. Tony said “yes” (except for Wisconsin).

Through 2009 EA Outdoors only did landscaping and snow removal, subbing out any pavement repairs needed as a result of damage caused by snow removal. “We just referred that work to a contractor that did pavement repairs,” Tony says. “We didn’t get a percentage or anything, we just made the referrals to help the client.”

As it turned out, the timing was perfect as a local paving contractor had gone out of business and was selling its equipment. “We saw an opportunity to expand services to our current customers and to bring customers we don’t have into the company,” Tony says. “We decided we could use the diversity of services to bring paving customers to the landscape side and bring landscape customers to the asphalt side.”

Tony says many landscape customers—as much as 60%—asked the company at one time or another about performing pavement maintenance work. “They said ‘If you did this type of work, we could use you; we would certainly look at your numbers.' We were providing a good service for them and they wanted more,” Tony says.

So EA Outdoors bought paving equipment from a company that went out of business, and in 2011 established EA Asphalt Services. “From an equipment standpoint it enabled us to suddenly have a base of equipment to get us started,” Tony recalls. “Then we needed someone to run the asphalt operations."

And luck was with them there, too, as the person they subcontracted the work to, Steve Metz, was ready to make a change. So they hired Metz, who is now director of EA Asphalt Services’ asphalt operations, because they knew him and had worked with him.

Tony says the initial growth was a challenge, adding that the acquisition of a paving company and the larger equipment forced EA Outdoor Services to add one new location. “The building we had was great for stacking mowers but not as good for storing pavers and other types of pavement maintenance equipment,” Tony says.

Two cohesive industries

Wendy Miller says there are a lot of similarities between the two industries, which made it easier to diversify from landscape into pavement. “Both industries run crews, both schedule work, both are trying to complete X number of jobs in a designated time, and both seasons are similar,” Wendy says. Plus, both work closely with property managers or general contractors to win the bid and get the work done.

“There are fewer jobs in asphalt, but bigger dollars and bigger dollars per job. In landscape maintenance you have to cut a lot of grass to make big money, but in asphalt there can be a lot of money in each job,” Wendy says.

Tony adds that the two industries also complement each other from an environmental standpoint. “One of the biggest things for us is how cohesive they are and how green paving really is,” he says. “That’s important for landscapers coming from the green to the black side.”

“On the green side we’re always planting and maintaining living things, and we reuse plants in the mulch and do all sorts of things relating to a green environment," Tony continues. "When you think of asphalt, you think of smelly and hot and every stereotype you can think of—and a lot of that is true. But what a lot of people don’t realize is that asphalt is really a very 'green' product too. It’s one of the most recycled materials there is."

Cross-promotion grows both businesses

Tony says that the two EA companies make a strong effort to cross-promote services:

  • 30% of asphalt customers came from landscape
  • 25% of landscape customers came from asphalt
  • Thus, 70-75% of customers are unique to one service or the other

“One of our goals for 2014 is to increase the number of customers from EA Outdoor to EA Asphalt and Asphalt to Outdoor,” Tony says. “We want to provide a total EA experience for all our customers. What we’re working on now is how we do that.

“We’re trying to look at it strategically,” Tony continues. “How can we show (customers) that price is price but service is a different aspect of it? We are focusing on making it clear how working with one company to solve all your outdoor needs makes life easier for them. We want to make it clear to them that we can pretty much take ownership of their entire property and show them how we can take care of all their needs versus going to a different vendor for each need.”

Wendy says that their salespeople work for one EA company only, “but can talk the language of both companies.” If a project comes up that could use both Asphalt and Outdoor Services, the salespeople do their takeoffs separately because "that’s where their skills are.” Then takeoffs are combined into the final bid by the sales rep who has the relationship. “If it’s a landscape job, landscape takes the lead and the asphalt guy is backup, and vice versa,” Wendy explains.

“Whatever needs the client has, that’s what we go in with at first," Wendy continues. "But we also let them know that, ‘By the way, did you know we also do this and this and this, and maybe we can help you there?’ The more business you can do with one company, the less likely they are to go somewhere else. The kind of people we deal with—property owners and managers who are very busy—would rather call one person to take care of their needs.  We want EA to be that person."

Wendy says it makes perfect sense to sell and self-perform both services because “we’re out there anyway and can see issues and address them for the client. If we’re doing regular maintenance, we can inform the client of things going on and can cross sell to them to take care of whatever the problem is. We can save them time, and that saves them money, and that makes us that more valuable to them.”