Profitability of building ponds

By Larry Shield, Product Editor

Upon entering the back yard in this Peoria, Ill. residence, visitors are greeted with a spectacular view of two cascading waterfalls. Kane Brothers charged the client $70,000. Small projects tend to be more profitable because the contractor does the job quickly and has the cash flow. With larger projects there?EUR??,,????'???s more of a chance to underestimate materials and make mistakes, said Chris Kane of Kane Brothers.

Each year landscape contractors have the opportunity to get involved in the pond building business and decide if this will be a good fit for them. How will this affect their company?EUR??,,????'???s bottom line? In other words, can the landscape contractor construct reliable ponds that can augment a customer?EUR??,,????'???s yard and still make a reasonable profit?

LCN interviewed three experts in the field of pond building to get their input on this niche industry and determine how profitable it can be.

Educate yourself first

For two decades Bryan Morse of Expanding Horizons has been designing and installing ponds for residences and gardens. He believes that in the hands of an educated landscape contractor pond building can be profitable. Plugging in a pond in only two days can be quite lucrative. The installer just needs to be wary of gophers, who can create all sorts of problems by digging through pond liners. Morse?EUR??,,????'???s solution is to pour concrete over the hole and then attach the pond liner, which avoids the problem of rodents.

Standing on the patio, the series of cascades on the right and left side direct the sound back at the Peoria, Ill. home. The client pays a monthly fee for service. Chris Kane of Kane Brothers said the maintenance portion of the business doesn?EUR??,,????'???t make as much profits as the design build portion because they need to build up their clientele.

?EUR??,,????'??In my opinion it?EUR??,,????'???s a good idea for the landscape contractor to do something he knows about,?EUR??,,????'?? said Morse. ?EUR??,,????'??A landscape contractor who?EUR??,,????'???s uneducated in this area ends up building substandard ponds. If a problem occurs it ends up giving us pond builders a bad reputation. It?EUR??,,????'???s just a matter of being educated.?EUR??,,????'??

Morse said his profit margin is around 50 percent, but that?EUR??,,????'???s because he knows how to use his staff and products efficiently. He uses his own backhoe loader combination to dig holes for ponds and other water features. There are many challenges to building ponds including figuring out how to balance a pool by setting up an ecosystem of snails, fish, oxygenated plants and lilies to help maintain the system. After installing a pond Morse provides his customers with some of the plant and animal life, but he doesn?EUR??,,????'???t have the extensive line of water plants that a nursery could supply.

Morse purchases most of his pumps from swimming pool wholesalers. Because so many submersible pumps failed after one to three years, he never puts his pumps in the ponds, but tries to make them as inconspicuous as possible by placing them behind or beside rocks.

Here an underlayment material, Mirafi 180N by Triumph Geosynthetics, is used to protect the liner from the ground and acts as a wick to remove methane gas underneath the liner. Typically the smaller residential projects with ponds in the $5,000 to $9,000 range are more profitable, because the projects have just enough steps involved where the client will seek a landscape contractor?EUR??,,????'???s help.

?EUR??,,????'??All landscape installations are labor-intensive,?EUR??,,????'?? said Morse. ?EUR??,,????'??My guys will dig a hole and carry some rocks. It just depends on who is doing the work for you. You can?EUR??,,????'???t always use your equipment like a trencher, for instance, if you?EUR??,,????'???re installing a waterfall. Sometimes it may require digging a hole with shovels. Some workers may not be as strong as others and be able to lift heavy rocks.?EUR??,,????'??

Make each and every pond count

?EUR??,,????'??Pond building will work for some landscape contractors and not for others,?EUR??,,????'?? said Bruce Tucker of Tucker Design Build Inc. ?EUR??,,????'??If you can build a pond and help manage it, this will work for you. You end up being married to the customer for six to 12 months after the installation, before they can take responsibility of the pond.?EUR??,,????'??

Tucker said some landscape contractors just spread themselves too thin and don?EUR??,,????'???t have the time to dedicate to maintaining the ponds they?EUR??,,????'???ve just built. Some contractors go under the false assumption that after the pond has been built, they?EUR??,,????'???re gone.

The lower pond in the Pan-Asian garden at Pikake Gardens in Valley Center, Calif. Projects like this can garnish profit margins up to 70 percent. On this $2.5 million project, Expanding Horizons originally made a margin of 70 percent, which was later negotiated down to 50 percent by the client.

?EUR??,,????'??I go to homes and see they already have the same pond kit, which I?EUR??,,????'???ve bought,?EUR??,,????'?? said Tucker. ?EUR??,,????'??What we can do is offer working designs. I?EUR??,,????'???m able to design ponds which come up to the edge of the grass, with pockets of rocks on one side.?EUR??,,????'??

Tucker said he builds about 12 to 14 ponds per year, but that side of the business has been lucrative. Typically his company charges between $4,500 and $50,000 per pond. The firm also constructs waterscapes, oases and paves driveways.

?EUR??,,????'??I became a pond distributor so I could diversify,?EUR??,,????'?? said Tucker. ?EUR??,,????'??Because we?EUR??,,????'???re in Florida we really don?EUR??,,????'???t have seasons. Having one opportunity in one level affords me the opportunity to get into another level we normally don?EUR??,,????'???t get. If someone is looking for a pond to be built and also wants some landscaping done, they may look in two different places. We like to be a one-stop shop and have both a landscape architect and landscape designer on staff, which gives us the opportunity to make more money.?EUR??,,????'??

Tucker said he would like to become a pond equipment distributor. Currently his firm distributes only fog systems. Nurseries typically sell plants to landscape contractors at wholesale prices, but Tucker said he doesn?EUR??,,????'???t see that same relationship between pond builders and pond distributors.

As far as liability issues go, Tucker said even though he buffers his ponds he worries about a young child walking into a pond and drowning. Ponds are often treated just like fountains in a public area. Tucker prefers to buffer his ponds with chicken wire in front yards or build a four-foot fence around a pond in the backyard. All this requires a certain amount of labor.

?EUR??,,????'??I think installing ponds is more labor-intensive than other landscape jobs, initially,?EUR??,,????'?? said Tucker. ?EUR??,,????'??You have to dig a hole and a shelf and get it just right. It?EUR??,,????'???s a concerted effort. You can build tiered levels with just two guys. After the initial part it?EUR??,,????'???s less labor-intensive. We can build a pond within eight hours.?EUR??,,????'??

This affects the bottom line because a small crew can finish a $6,000 pond in one day. It takes a lot less man hours than installing an oasis. Building the 12 to 14 ponds per year helps Tucker get some extra business and make more profit.

Justify to clients why their money is well-spent

Chris Kane of Kane Brothers, said the financial benefits of becoming a distributor is that the landscape contractor receives better discount pricing than if dealing directly with a wholesaler. The markup on buying pond products is greater if a contractor has to deal with a distributor?EUR??,,????'???s pricing. Depending on the product line, distributors typically sell products from several different companies, said Kane.

?EUR??,,????'??Typically distributors buy products at greater volumes. They?EUR??,,????'???re often required by manufacturers to meet a minimum order each month in order to remain distributors,?EUR??,,????'?? said Kane. ?EUR??,,????'??I think it?EUR??,,????'???s absolutely a good idea for landscape contractors to add pond building to their businesses, as long as they put forth the time to do it correctly. They also shouldn?EUR??,,????'???t wing it at the client?EUR??,,????'???s expense. Installing a pond is a little more involved than patio or groundwork. You have to deal with water filtration, water quality and the structure of the pond so it doesn?EUR??,,????'???t overflow.?EUR??,,????'??

The bog filtration system, on the right, is used to clarify the ponds, covering six acres of gardens and landscapes. Bryan Morse of Expanding Horizons said he was lucky to land a project where he had 100 percent creative freedom.

In terms of the construction, the landscape contractor is liable for the products and the pond. Kane said most cities have safety issues, such as the height of the fence around the pond. Contractors often have to guarantee proper water quality control so expensive fish such as koi don?EUR??,,????'???t die prematurely.

Ultimately landscape contractors need to educate themselves about the proper techniques of how to build ponds. Designing them with a bit of flair can beautify any landscape. But it?EUR??,,????'???s also important to build a self-sustaining pond that can operate as its own ecosystem. As long as a landscape contractor doesn?EUR??,,????'???t spread himself too thin he can supplement his profits by building ponds.

Remember to check your local, state and federal ordinances for safety issues regarding the location and depth of ponds, along with surrounding fences. Check out what liability issues are involved in building and maintaining ponds. Make sure to do your homework so you know which drains, filters, pumps, liners, oxygenating plants and animals will make the most successful pond for your customer.