Running a successful landscaping company is no easy feat.
To be able to perform services at a superior level, it takes a variety of equipment. And that can get expensive.
Financial constraints, along with additional factors such as supply chain issues, efficiency or convenience often lead to companies renting some equipment instead of purchasing it outright.
Do more while owning less
Ever since taking over the family business three years ago, David Warrick, owner of Warrick Properties Group in Hamilton, New Jersey, has quickly expanded the company. The first season he took over, the business did about $110,000 in revenue. Now, they are set to surpass $350,000 in 2021.
“Since we’ve been growing so rapidly, and most of the stuff my father had was old, I’ve been replacing most of the equipment. But I’ve also been adding some services that he didn’t offer,” Warrick says.
One of those services has been aeration. Warrick explains that initially, his crews were renting aerators to get the work done.
“It didn’t make sense to go out and spend $5,000 on an aerator when in the first season we did maybe five jobs,” he says. “I had my guys rent the machine for the day and I didn’t have to worry about servicing it, I didn’t have to worry about a payment, and I didn’t have to worry about it breaking down. We did the jobs, got them done and returned the machine. It was as simple as that.”Over in Indiana, Scott Murphy, owner of
Gator Lawn and Landscaping, says his company is renting equipment about 10 times a year as the business expands its services.
“We’re about 85% maintenance — that’s mostly what we do,” Murphy says. “The last year and a half, we’ve gotten a little more into some design/build and hardscaping.”
Murphy says that recently he’s been relying on renting more to acquire equipment that will help crews get work done faster and more efficiently.“We just did weed service for eight McDonalds here locally, and they’ve decided to go with rock instead of mulch. We did three installs with about 80 tons of rock,” he recalls. “So, we had to rent a Bobcat. If we had to do that with just shovels and wheelbarrows, we’d probably still be there.”
Crews were able to complete the job at about three locations per day with the rental equipment. Murphy adds the rental fee, which he incorporated into the pricing for the job, was well worth it.
“There was a time when we would have wheelbarrowed that 80 tons of rock, because we’re thinking it saves money on the rental machine,” he says. “But, if you look at the whole project, go ahead and rent that machine. You’re going to get the job done five times faster. For us, it’s a no-brainer.”
Larry Riddle, owner of Local Lawn Landscape in Comanche, Texas, says when he has a big tree job, he’ll always rent equipment to get the job done safely.
“I’ve got most of the equipment I need, but when we do rent, it’s normally a sky track if we got a big tree job with big limbs over a house or something,” he says.
Like Murphy, Riddle also rents equipment for hardscape jobs.
“I don’t have a skid-steer so if we have a big landscape job with a lot of gravel or heavy rocks to move, we’ll rent that,” he says.
Just like he did with the aerators, which the company now owns, Warrick says this year he’ll be renting more equipment to test out another new service.
“This season we started offering power seeding — and we’re doing the same thing,” he says. “We were kind of experimenting with it and finding out how to price it and how it’s going to work for us.
It doesn’t make sense to spend thousands on a piece of equipment if you don’t need it all the time. It was much easier to go rent the equipment when we needed it.”
And once a service is a proven success, then Warrick says he’s happy to make the financial commitment to purchase the equipment.
“Being able to prove the concept first with someone else’s machine is big,” he says.
Money saving substitute
The money he saves by renting equipment is the biggest advantage of going this route, Warrick says.
“To only have to spend $85 to rent a machine for four hours as opposed to an upfront payment of $4,000 or $5,000 for that same piece of equipment, or taking out a loan on it and paying $150 a month regardless of if you ever use it, is a massive pro,” he says.
In addition to the upfront cost of buying equipment, expenses for servicing and maintaining it are nonexistent when renting.
“It’s more cost effective for us to just go rent it for the day,” Murphy says. “We can spread that cost over, and when we’re done, we don’t have to service the machine or do maintenance on it. We just return it, and they take care of all that stuff.”
Since Gator Lawn and Landscaping still isn’t doing hardscape work all season long, Murphy says it’s better to rent the equipment on an as-needed basis.
“We’ve been pricing these things and they’re $60,000 dollars. And if you’re not using it weekly, it’s hard for us to justify buying a $60,000 piece of equipment that you’re going to use 10 times a year,” he says. “Hopefully, we’ll be in a position in the future where we need one every day, and then that might change things. For right now, it doesn’t make sense to spend that kind of money on something that’s going to sit unused most of the year.”
While Riddle also factors the rental cost into the job’s pricing, he says it’s the reason he sees renting as a last resort.
“The only disadvantage I see when it comes to renting is the cost,” he says. “I don’t like to have to pass the cost off to the customer for us to do a job. Therefore, I try to do it with what I have already. Sometimes it’s more efficient though to rent exactly what you need, but with me, I got almost everything we’ll need.”
Warrick adds that by saving on overhead and renting he’s able to continue increasing his company’s revenue. “As a growing company, it seems like money is always going out so not having to shell out that money is nice,” he says.
A make-or-break dealer
While Warrick does see the benefit in renting equipment, he says he’d rather rent through a dealer than a big box store — something that’s not feasible given his location.
“Unfortunately, we don’t have a good rental facility here,” he says. “I’m on the old-school side when it comes to that sort of thing. I’d much rather call up my local dealer and have that relationship.
“It’s much more structured and it’s not personal at all,” Warrick adds. “You go in and they say, ‘this is the price, and this is the deal.’ The time window is much more strict and everything.”Alternatively, Murphy says he works with a local dealer that is well-known and trustworthy.
“We rent through a local guy here and he’s been around for 50 years,” he says. “We have a really good relationship with him. The availability is nice because usually we can get it whenever we need it. We get with him and say, ‘We need this next Monday,’ and we can kind of reserve it.”
Reserving equipment ahead of time is something Warrick says just isn’t possible when working with big box stores.
“I’ve noticed there’s no guarantee of the equipment,” he says. “It’s first come, first served. Unfortunately, if I book four or five power seedings for today and my guys go to Home Depot in the morning and they get there and they don’t have them, well that’s it. Now we’re scrambling.”
Because of this, Warrick says its important to know how to adapt when these problems arise.
“Be flexible,” he says. “Especially during the peak season for certain services. If you can’t reserve a piece of equipment, be aware that you might have to change things up or go a different route.”
Riddle says that renting from a local dealer also saves time, as they’re closer to town than his ranch.
“Occasionally, we will rent a tractor because the rental place is so close,” he says. “If it’s convenient to rent as opposed to loading my tractors and dragging them 20 minutes into town, then we’ll rent one.”
However, another concern Riddle can have with renting is the quality of the equipment.
“One thing I’ve noticed with renting equipment is that it’s worn out when you do get it,” he says. “That’s one thing that drew me to get my own stuff. I think image means a lot when you’re out on the job so your equipment, your guys and your uniforms should all be nice.”
Murphy says the personal service he gets through his dealer is also beneficial for when things break down on the jobsite. He recalls a time where his dealer rushed right out to help him.
“One time it blew a track, and we don’t know what we’re doing or how to fix that machine,” Murphy recalls. “So, we called him, and he came right away. If you go to a big box store, they aren’t going to have somebody who can come out and help you. That’s huge for us.”