Designed to Last

There’s really no way to sugarcoat the current economic crisis. Between foreclosures, unemployment, tightening credit and cautious consumers, businesses both large and small are learning to survive. For the companies that are fortunate enough to continue working, certain changes are in order to weather the storm.

Sun City Landscapes, a top design landscaping firm based in Las Vegas, is one of those smart and successful companies that prospered to a national status in the economic boom days, but today, the company is focused on preparing to endure and succeed despite the downturn. Led by owners Al Luchterhand and Louie Polish Jr., the company first emerged to service homebuilders in the once booming Vegas residential market. However, with the housing market tapering off — for example, Las Vegas’ weekly sales in July 2007 were 321 compared to 66 in March 2009 — Sun City has worked to adapt its business to take on projects from a variety of clients, trim down on unused equipment, eliminate excessive overhead and be as efficient as possible.

“The residential market has definitely come to a standstill,” explains Luchterhand. “New homes are selling but not at a steady pace, and the resale market is flooded from foreclosures. Business has slowed for every trade and some have had to close up shop. The trades that are left are the ones that have prepared for the downturn.”

Sun City’s primary focus is offering landscape and grading services, specifically for homebuilders such as Pulte Homes, Lennar and William Lyon Homes, to name a few. The company’s list of projects includes single family home subdivisions (with around 40 units), all the way up to master planned communities with anywhere from 1,000 to 8,000 units.

However, with the residential market taking traumatic hits — around the country but especially in Las Vegas — the company has been forced to diversify its offerings to include more services to a broader client base. This has led Sun City to focus more on custom projects for homes, as well as getting licenses for other specialties including swimming pools, concrete and masonry work. On top of those services, the company also offers amenities like seat walls, barbecues and outdoor kitchen areas.

“Back in the day when we were busy, homebuilders were about 90 to 95 percent of our business,” says Polish. “Before, we were doing 6,000 or 7,000 homes a year for the builders and that’s back when they were building about 30,000 homes a year. Now they’re going to be lucky to build around 5,000 homes in 2009, so it put a drastic cut in our business. We’ve been able to diversify our client base and now 15 to 20 percent of our work is coming from the private sector.”

Maintaining current clients and attracting new ones has become Sun City’s core focus, along with cutting costs, consolidating equipment and lowering rates for the same quality work. A bright spot in these tough times is supply costs. Thanks to job costing and finding vendors that provide materials at lower prices, Sun City has been able to transfer material savings into better prices for its clientele.

“The one thing we’ve been pretty fortunate with right now is the supply,” says Polish. “I think we’re getting some better prices on supplies than we have in a long time, especially on materials like plants and trees. Saving your clients money will ensure continued business.”

But that’s not enough: The company has also been compelled to dedicate a portion of its budget to advertising in local magazines — an expense it never had to worry about in the past. Despite people seeing the Sun City Landscapes’ name around town for the past 20 years, Luchterhand and Polish want to get their faces out there and let others know the company is available for a variety of projects.

“We never spent a lot of money on advertising, marketing and sales because business just came to us through our reputation,” says Polish. “Right now any job is a good job, so we’re spending more money and time on advertising to show people the diversity we have and what we can offer.”

Equipped for Work

There’s no question that for a company to be successful, it has to be built with hard-working employees and reputable equipment. Sun City Landscapes has worked diligently to keep a workforce of dedicated individuals and machinery a part of its business equation.

At its peak of operation, the company once had nearly 500 employees on its payroll. However, over time and as the economy shifted, the company has trimmed its employee count to 80 — a cut that has been difficult, but necessary to survive.

“It’s a terrible position to be in and we hate letting go of people who have been committed to us and our company for all these years,” says Polish. “It’s like your family, but we have to remember that in the big picture our commitment is to Sun City Landscapes and we get paid to make those hard decisions.”

Because of those tough choices, Luchterhand and Polish have gained plenty of business wisdom. They now know that reducing your employee count should be a primary move.

“Unfortunately, one thing we’ve learned it’s difficult to let go of employees,” says Polish. “Right now the market is in a total spiral; it’s like falling off of a 1,000-ft cliff. We’ve always been the nice guys and kept people around for as long as possible, but it does become a quick financial burden.”

Although reducing their payroll by nearly 70 percent hasn’t been an easy task, the owners do appreciate the employees they have been able to keep. Given a noticeable drop in projects and salaries, retaining their smaller staff has been a blessing. With the employees the company has been fortunate enough to hold on to, Luchterhand and Polish work to keep them in the loop of day-to-day business operations. Through this practice, everyone involved in Sun City Landscapes has a general knowledge of where the company is taking hits and gaining progress, so there are no surprises when drastic decisions need to be made.

“It’s just one of those preventative things we do,” says Luchterhand. “Our managers and employees have always been involved in our financial state. The more they are up to speed on that, the easier it is to swallow when cuts in pay or staff are made. They thoroughly understand what we’re going through and that’s important for running our business.”

Similar to its staff, Sun City has also scaled down its equipment fleet to adapt to the changing economic times. Years ago — when business was at an all-time high — the company easily required more than 100 pieces of machinery to meet deadlines. However, Luchterhand and Polish have always focused on trimming machine costs to be prepared for when work slowed down and equipment stood still.

“We’ve always worked to keep our overhead low,” explains Polish. “We have never gotten overcommitted with too many vehicle or equipment payments, and that’s definitely helped us now. Obviously, when the market goes down as it has, getting rid of equipment is not a real easy task to do and when you do get rid of it, you’re taking big hits on values.”

Even though it may not be as massive as it once was, the company’s smaller fleet still consists of hard-working pieces including: Caterpillar loaders, backhoes and skid steers; John Deere skip loaders; Bobcat skid steers; and a mix of Peterbilt, Freightliner and Ford trucks. To keep these machines safe and running efficiently, the owners had GPS systems installed in 2002. With the technology, the company can track the whereabouts of its equipment to deter theft, improve on service call durations and of course save money.

“We have GPS systems in all our vehicles and equipment,” says Luchterhand. “It has been a definite asset to the organization in the past as we were able to find stolen equipment. The best attribute about the GPS is the ability for the dealerships to find the equipment and service it at regular intervals when the machine is on downtime. This allows us not to have any downtime during regular working hours.”

Sun City also has installed GPS on the trucks that crews use to get to and from jobsites. Through the systems, the company’s safety director can monitor the speeds of the trucks and alert drivers to slow down — increasing safety through lessening the potential for an accident. And although GPS sounds like an expensive chunk of an already tight budget (the annual expense to run GPS is around $420 per vehicle), the owners do stress that it’s an investment worth making.

“The GPS systems have helped tremendously,” says Polish. “It’s an initial upfront expense, but you ultimately have to look at the savings. It helps with locating equipment, as well as on insurance costs and keeping our crews safe.”

A Bright Outlook

With thousands of projects under its belt, Sun City Landscapes still finds pride in the designs it has created over the years and plans to continue with its craft. Although larger residential projects may be becoming a thing of the past, clients can still look to them as a great reference for the services the company provides.

“It’s nice to go back and look at projects we did five or six years ago — the homes, streetscapes and parks — there’s so much self-satisfaction in what we do,” says Luchterhand. “We basically take the desert dirt and make it beautiful.”

As for keeping busy in 2009, the company is planning to focus more on the private sector of their business such as individual property owners. The large master plan community projects that once consumed Sun City’s schedules are in limbo as the residential market continues to suffer. Although the number of larger projects may be limited in the upcoming year, the company and its crews remain optimistic. By staying confident in their business and continuing to diversify the company’s offerings, the owners plan to come out of the current economic turmoil on the right foot and hopefully ahead of the competition.

“No one has a crystal ball to say when this is going to turn around and how much it’s going to turn around,” says Polish. “But when it does come back around, there’s going to be a lot less landscapers in Las Vegas, and a lot less of us to choose from. Right now is a great time to gain market share, so when things begin to look up we’ll be in a much stronger position. We may not have the volume that we had before, but we’ll still be in a good position.”

Pam Stask is assistant editor of Compact Equipment, based in Peninsula, Ohio.

Five Ways to Survive in a Stormy Economy

The Owners of Sun City Landscapes Offer Advice on Staying Afloat in Turbulent Times

1. Keep Overhead Low

Don’t get bogged down with having too many vehicle or equipment payments. We kept reinvesting our money into the company and that’s definitely helped us now. Our key to success when growing the business was keeping track of a lot and not spending money on things we couldn’t get rid of when work slowed down.

2. Diversify Your Services

We always worked on production homes for the builders and will continue to do so, along with the streetscapes and parks. During this downturn, we have found it necessary to obtain other licenses to broaden our scope of work. Obtaining our swimming pool, concrete and masonry licenses have helped gain work from markets that we previously did not have, mainly the custom market, which enabled the company to keep on working.

3. Out-of-the-Box Thinking

You can’t do things the way you used to — you have to think a lot differently. Every week we’re trying to think of a new way of doing business. We were in growing mode for basically 18 years and now these past couple of years we’re going in the other direction.

4. Don’t Forget What You Know

Sometimes you get in panic mode and you forget what you know. You learned a lot of things growing your business, so you just have to step back and use that knowledge. You need to do things a little differently, but you can’t forget what got you there.

5. Everyone Is a Salesperson

We eventually came to the realization that we never really spent a lot of money on marketing. It just came because of our reputation. Right now, a lot of our business is coming from word of mouth. You could be getting a haircut and talking to the person next to you about what you do and that can eventually turn into a job.