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Profitable Pond Building: The Money is in the Water

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If youre in the green industry, it wont be a secret if I say that ponds are hot. As a testimonial to the legitimacy of the ponds phenomena, USA Today (July 11, 2003 issue) declared water features/ponds and decks to be the two things that homeowners would most like to add to their homes.

The fact of the matter is, historically, water has proven attractive to life forms around this planet, and when technology and good economic conditions come together simultaneously to make beautiful water features affordable to the average homeowner it adds up to a business opportunity. But how good and how profitable is the opportunity? This is a question Im asked all the time, so you shouldnt be surprised that I have this down to a science of sorts.

The Green Industry Stats
Water gardening is only one part of the exploding Green Industry. According to PK Data, a market tracking service, lawn and garden sales have doubled over the past decade and are approaching $40 billion in the US alone. Furthermore, this industry has been growing at about 8% annually over that same period of time. Compare this to the 3 to 5% average annual growth in our economy over the same period of time.
And although the actual number of participating households has remained fairly steady over the past decade, the sales per household have grown dramatically. Again in the words of PK Data, What is driving the industry is that individual households are spending a larger portion of disposable income on gardening items. This is great for those of us in the industry.

How About Water Gardening Specifically?
Now lets bring the focus in a little tighter and look specifically at the water gardening portion of things:

  1. Total retail sales in 2000 were about $945 million dollars.
  2. Sales are growing 9 to 10% annually.
  3. In the U.S. there is a 7% household penetration compared to 10 to 11% in Europe which leaves the U.S. market with lots of catching up to do

What does this all mean? Theres still a lot of room for waterscapes, ponds, etc.

A Few More Interesting Statistics
Of the people surveyed, over 60% said they have gardening or landscape projects that they want to start and finish within the next 12 months, and waterscapes ranked as one of the top three gardening or landscaping projects that they want to start or finish in the next year.

Photo courtesy: Aquascape Designs

Adding Pond Installation to Your Repertoire
General statistics can take you only so far in any industry. At Aquascape Designs, we do seminars around the country introducing landscape contractors to pond building. We conduct Build-A-Pond Day seminars for contactors who want a physical, hands-on, get-your-hands-dirty, pond building experience that shows (actually it requires active participation) them the 20 steps required to build a beautiful, naturally-balanced aquatic ecosystem in one day, profitably.
We break ground in the morning, and by 5 p.m. that same day, the whole class stands there looking at this beautiful water feature that emerges before their very eyes. At that point, you see steam start coming out of their heads as they begin to add up the numbers.

Pond Kit: $1,200
Rock and Gravel: $900
Labor: about $750 (figuring in the amount of laborers and pay)
Total $2,800

Then, they start thinking about what the beautiful feature in front of them would be worth to their customers. I throw a number into their heads: $7000, and before you know it, theyre doing the math. A 60 percent profit margin? Is that even possible? With ponds, it is!

When they compare that gross profit margin with other possibilities in the landscaping market, theyre blown away! And to think they woke up in the morning thinking 30 percent was good.

Theyve learned. Ponds are profitable and theyre here to stay.

The Future is Indeed Bright
Think about all the people you know, and ask yourself how many of these people have ponds? If youre anything like me youll answer, very few. The waterscape market is effectively in the infancy stages of its development, and has many miles to go before it runs out of steam.
Secondly, the green industry - with all its back to nature participants - is growing by leaps and bounds. The popularity of beautiful, naturally balanced water features is primarily a backlash response to the high-tech character of the modern work place. And the more high-tech we become, the more people are going to want to escape back into nature, and into a backyard paradise like a pond.

Repeat Business
Another factor that will interest you is that, in our experience, approximately 75% of our business comes from customers that weve previously done work for. So, although we do get new customers every year, the bulk of our projects are repeat business. Why is that? Because one pond is never good enough. Were remodeling, resizing, adding more ponds to properties the options are endless. And if youre a landscaper who has flowers, patios, walkways, and the like in their business model, dont forget that all of those things are needed to thoroughly enjoy a pond. More accessories, more profit.

A Good Place to Be
Im not going to sit here and tell you its easy. In order to make a profit, you have to understand the financials of your business. Only educated businessmen can succeed in making a profit with any venture. What I am saying is that if you have a good grasp on the business and financial side of your business, the water gardening industry is a pretty darn good (and profitable) place to be right now!

Editors Note: Ed Beaulieu is Vice President of Field Research for Aquascape Designs, Inc.Over the last 15 years he has successfully built hundreds of ponds. He has a B.S. in Zoology, with an emphasis in Entomology and Limnology.







 
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