IRRIGATION AND DRIP SYSTEM COMPANIES
How an Irrigation Company Can Protect Margin From Quote to Service
A quote goes out for a forty-acre drip layout on the strength of last month's pipe rates. By the time the order is confirmed, the price of pipe has moved and two installation crews are already on other sites. The dealer who brought the order wants sixty days to pay.
Our work is the commercial side of an irrigation business. How a quote becomes a margin, how material price swings are handled, how dealer credit is tracked, and what after-sales calls cost. System design, hydraulics and water-use advice stay with your engineers, and stay outside our advice.
Book a first callCOMMON CHALLENGES
What goes wrong in
irrigation and drip system companies.
- 01Quotes are priced from a rate list that was true on the quoting day, and nobody checks the quote against what the job cost once the installation is finished.
- 02Pipe, fittings and emitters are bought on credit or in advance, and a price swing between quoting and buying cuts the margin of every job still open.
- 03Dealers and distributors place orders for their own customers and take credit, and the company waits on the dealer's collection from the farmer.
- 04Orders come in a rush before the season, and installation crews, vehicles and stock cannot be stretched, so jobs are delayed and customers lose confidence.
- 05After-sales calls for a leak, a blocked line or a part are handled by whoever is free, at no charge. Nobody counts how many calls each job brings or what they cost.
NUMBERS TO TRACK
Count these
every week.
Margin on completed jobs
Quoted price less actual material, labour and transport, divided by the quoted price, per job.
Material cost movement on open jobs
Rate at purchase less rate at quote, as a share of the rate at quote, for each open job.
Dealer dues overdue
Dealer dues beyond the date promised, as a share of everything dealers owe.
Fittings stock cover
Value of fast-moving fittings in stock divided by the value crews used per day in the last busy month.
After-sales calls per job
Number of service visits in the three months after handover divided by jobs handed over, with cost per visit.
Timing and seasons: Orders often rise before sowing and when water is scarce, and in many places slow when rain makes sites hard to work. Plot your own orders by month for two years before planning crews and stock.
WORKED SAMPLE (ILLUSTRATIVE, NOT CLIENT DATA)
One project quote when material moves before buying (illustrative, not client data)
| Line | At quote | After material rises 10% |
|---|---|---|
| Quoted price | ₹3,50,000 | ₹3,50,000 |
| Material | ₹2,40,000 | ₹2,64,000 |
| Labour and transport | ₹40,000 | ₹40,000 |
| Total cost | ₹2,80,000 | ₹3,04,000 |
| Margin | ₹70,000 | ₹46,000 |
| Margin as share of price | 20.0% | 13.1% |
Made-up figures. A 10 percent rise on ₹2,40,000 of material adds ₹24,000, which takes the margin from ₹70,000 to ₹46,000. A revision rule on open quotes exists to catch this before the order is placed.
COMMON MISTAKES
What owners often
get wrong first.
- 01Quoting from a rate list that was true on the quoting day. The material cost movement on open jobs shows how much margin has already gone.
- 02Treating after-sales visits as goodwill. Calls per job, with cost per visit, show which job types should carry a service allowance.
- 03Extending dealer credit by relationship. Dealer dues overdue is the one number that tells you whose next order should be on advance.
OUR FOCUS AREAS
Where the work
usually starts.
- 01Quote versus actual cost for each completed job, with material, labour and transport on separate lines
- 02A material price log: rate at quote, rate at purchase, and the gap on each open job
- 03Dealer and distributor accounts with credit given, promised dates and amount overdue
- 04Season order book: confirmed, pending site visit and pending payment, with crew days each needs
- 05After-sales call log by job, with cause, visit cost and whether it was paid or free
- 06Stock of fast-moving fittings against what crews actually used in the last season
- 07A rule for revising a quote when material moves beyond a set share
START THIS WEEK
Things you can do
before you call anyone.
- Take the last ten completed jobs and write the quoted price, the material cost, labour and transport on one line each. The jobs with margin well below the rest are where the quote method is wrong.
- Hypothetical example: a quote of ₹1,00,000 with ₹60,000 of material and ₹15,000 of labour leaves ₹25,000, which is 25 percent. If material rises 10 percent before buying, material is ₹66,000 and the margin falls to ₹19,000, which is 19 percent.
- List every dealer with what they owe and how many days it is overdue. Hypothetical example: a dealer owes ₹1,80,000 against a limit of ₹1,50,000, which is ₹30,000 or 20 percent over. Call the largest and ask for a date, not a promise.
- Count the after-sales calls from the last two months and put a rupee cost on each visit. Look at which jobs came back most.
WHAT YOU GET
Start with the priorities
that matter most.
Your first sheet: a quote versus actual sheet for your last ten completed jobs, with material, labour, transport and after-sales cost against the price quoted
- A quote versus actual sheet for completed jobs, with margin by job type and by dealer
- A material price tracker and a quote revision rule that the sales person can apply
- A dealer dues list and a credit limit per dealer, built from past payment
- An after-sales call log with cost per call and a view of jobs that bring the most callbacks
Not the right fit when: System design, water requirement and soil or crop questions are for your engineers and the agricultural experts. We work on quotes, costs, credit and service records. A company that sells only through its own retail counter is nearer to /industries/agriculture/seed-fertiliser-and-agri-input-dealers.
HOW THE WORK RUNS
What happens after
you book.
- First call: you describe the business and the numbers you already track.
- Your first sheet: the one described under What you get, built from your own books.
- The rhythm: a regular review of margin on completed jobs, material cost movement on open jobs, dealer dues overdue, fittings stock cover, after-sales calls per job.
- What you hold at the end: a written sheet and a named owner for each number.
WHICH SERVICE FITS
Where we usually start
for this trade.
Financial Health Audit
A management-level review of margin by product, the cash cycle, receivables and costs, ending in indicators you track monthly. Not a statutory audit.
Business Audit
Financial Health Audit is part of Business Audit. See the full service if the problem is wider than one piece.
PROBLEMS THIS SHOWS UP AS
How owners in this trade
describe it.
Our revenue is growing, but our profit is not
Sales are up but the money left over is not. Find where margin leaks in pricing, discounts, rework and overheads, and what to check this week.
Cash is always tight, even when sales look good
Full order book but an empty account? See how collections, stock, credit terms and timing gaps drain cash, and how a 13-week forecast eases the squeeze.
COMMON QUESTIONS
Before you
get in touch.
HOW THIS DIFFERS
Close trades,
different work.
How this differs from Seed, fertiliser and agri-input dealers
An input dealer sells small repeat items on seasonal credit, while an irrigation company sells projects priced from a quote, installs them and carries after-sales calls.
How this differs from Farm equipment and tractor dealers
A machinery dealer sells units on finance and service contracts, while an irrigation company prices custom projects from material and crew costs.
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