Do you have low-ballers in your market? I’m sure you do. I get emails and calls almost daily from readers complaining about guys who price their work at dangerous levels, don’t carry insurance and have poor safety practices.
But Michael LaPorte, president of Commercial Scapes in Bristow, Va., isn’t one of those guys. He’s been in business for 21 years, and runs a successful, $6.5 million design/build company with 50 employees. He’s smart and knows what he has to do to compete.
The gist of it is this: Someone referred to LaPorte’s company as a low-baller, and he took offense at that. He’s not a low-baller; he just knows his numbers and can price aggressively to compete in the already hyper-competitive DC market.
Here’s what he had to say in a message to me and L&L columnist Jim Huston:
Mr. Bowen & Mr. Huston,
Recently I have heard the term “low-baller” in reference to my company and I have also read the about low balling and low-ballers in Lawn & Landscape magazine.
While I am positive there are companies that do not understand their cost and are desperately trying to get work just to get started or to keep the doors open. I also believe there has been a sense of entitlement with landscape owners and operators doing the same business practices they did five years ago.
We have had to change a lot of practices while keeping some of our best practices. We have been aggressively going after commercial installation work while still making a profit. I had heard from a supplier that several of his customers were complaining about our pricing and referring to us as “a low-ball outfit.”
I have to say I found this offensive because we feel like we work hard lowering cost and self-performing work to save money.
I realize we do a lot of things other landscape owners and operators won’t do, but to be competitive and profitable this is what we have to do. Now when I hear someone referencing low balling or a low-baller it makes me wonder if that term was ever used to describe Sam Walton? I am just trying to bring another point of view and maybe the solution is to look internally and fix what I can instead of externally where I can fix nothing.
Here’s what he and his crews do to run things as efficiently as possible (formatting mine):
- Our start time is 5:00 am so we can get on the road and beat traffic.
- Our trucks are loaded the night before by a two-man crew that comes in the evening and loads and fuels up all the crew and delivery trucks.
- We have a tractor trailer that travels to growers picking up plant material controlling inventory and purchasing less expensive plant material, taking advantage of quantity discounts.
- We purchased two older sod harvesters with a piggy back fork lift to harvest and deliver sod. This has cut our price for sod in half.
- For the last ten years we have owned a topsoil plant so we could screen and mix our own compost and topsoil.
- We recently purchased two dump trucks to deliver topsoil and bulk materials. In the past we hired dump trucks on an hourly basis.
I called LaPorte up and we talked a lot about his market and what he’s seeing. Things are tight, but he’s shifted his concentration away from the stagnant retail construction sector and instead now gets a lot of work from hospitals, parks and community centers.
“The housing market’s bad – but it’s not Florida, not Arizona, not Nevada,” he says. “We’ve had to scramble to keep (business), but it is out there.”
He said a lot of his colleagues focus on how big their competition is and worry about what companies like Brickman are doing.
“There’s a lot of room in the market. You can’t be a Brickman,” LaPorte says. “There’s room for a niche. Brickman is very good at a lot of different facets. You can’t beat Brickman.”
Scott Brickman and his team run a great company. But that company does more than $800 million a year, and can compete at a level of volume that most other landscapers just can’t. It’s impossible. Spending any time worrying about what they do – or anyone else does –with their pricing is a waste of energy.
All you can do is what LaPorte did: Change how you operate to find a niche and become more efficient, more competitive.
In his response to LaPorte, Jim articulated a definition for low-baller that I think is solid: “Whenever I use the term ‘low-baller,’ I’m referring to a contractor who reduces prices without doing the appropriate cost-benefit analysis. The primary concern of the low-baller is usually cash flow, not profitability.”
Michael LaPorte isn’t a low-baller. He’s smart. You can’t be both.