By Jim Cory. Contractor Mark Peterson had a problem. The owner of the landscape company he'd used for 15 years had decided to get out of the business, and Peterson didn't like the level of service provided by the new owners. So when clients needed landscaping as part of a job, Peterson began referring them to a short list of landscapers he knew. That, too, proved unsatisfactory.
"The experience clients were getting at the end of the landscaping project was not the same experience they were getting at the end of the remodel," says Peterson, whose company, M/A/Peterson in Edina, Minn., last year generated $6 million in sales. So he decided to start his own landscaping division.
To get it off the ground, the remodeler hired a pair of landscapers who already worked part-time for his company as laborers. All told, he invested about $50,000 in a Bobcat, a used dump truck, miscellaneous equipment, and indirect labor costs.
In 2001, the first year of operation, Peterson and his brother, Dave, handled sales, and an illustrator on staff, trained in landscape design, produced the design work. Pricing jobs, he learned, wasn't the same as pricing remodeling. Perishability of products requires higher markups. Pricing "depends on the product, the risk, and whether there's a guarantee," Peterson says. First year revenues were $400,000.
This year Peterson will hire a full-time landscape architect who will also sell projects. He expects the division to generate a half million dollars in sales. After that, "it will depend on the person we get to design and sell and whether we manage it as a stand-alone business or a service strictly offered to clients." Eventually, Peterson hopes landscaping jobs will bring in remodeling work. "We won't know or understand until we take it to the next level."