Blue skies ahead

State of the Industry Report - 2016 State of the Industry Report

Contractors forecast steady growth for the industry heading into next year.

October 21, 2016
Katie Tuttle
© Matt Collins

Confidence in the industry is high.

In our State of the Industry survey, we asked respondents how confident they were that the green industry will grow in 2017. When we asked the same question back in 2011, 20 percent of respondents said they were not confident in the industry at all. This year, that number dropped and only 2 percent said they had no confidence in the industry’s growth.

“I know the industry is going to grow,” says Daniel L. McCurry, branch manager of Father Nature Landscapes in Birmingham, Alabama.

“People are craving what we have and it could be because the labor force sucks so bad, people are having a tough time finding companies that really care about the details because the laborers don’t really care much about the details.”

In 2015, with 28 to 32 fulltime employees, Father Nature Landscapes had a revenue of $4.2 million. Currently, the company offers design/planning, outdoor living rooms, plantings, driveways, custom mailboxes and hardscape services.

“We have more leads than we know what to do with,” McCurry says. “Right now, we’re sending work away.”

Because of a lack of skilled employees, the company currently subcontracts out portions of excavation, irrigation, driveways, tree work, block and brick work, electrical, plumbing and carpentry, depending on schedule and technical skill.

Chris Capone, office manager at Capone Landscape in Wakefield, Massachusetts, says the economy – as well as the company’s reputation – is the reasoning behind this.

Capone Landscape provides maintenance, lawn service, fertilizing, aeration, spring and fall clean-up and remulching as the bulk of its business. Last year’s revenue was $1 million.

“We just went through the busiest spring ever,” she says. “We were drowning this spring, absolutely drowning in work. We feel as though the business will continue to grow into 2017.”

“We’ve seen an uptick of younger people asking us to maintain their property, whereas before they’d maintain it themselves.” Chris Capone, Capone Landscape

She also credits this growth to the younger generations, who are growing up with different ideals than their parents and grandparents.

“I think that the younger generation has decided that they can afford to have their lawn mowed, which is the bulk of our business,” she says, “We’ve seen an uptick of younger people asking us to maintain their property, whereas before they’d maintain it themselves.”

Going south up North.

While confidence in the industry is strong for contractors, there are problems in some parts of North America. In Canada, the shift has come in the opposite direction, and it’s happened in the past few months.

Darren Kovacs, COO and founder of Exact ET in Calgary, Alberta, Canada says the oil and gas industries are the major market drivers in his area. Within the past six to 12 months, they took a bigger drop than anyone in the area anticipated, which has resulted in people being tighter with their money.

“The market isn’t what it was,” he says. “There’s so many people in that (oil and gas) industry it really impacts. For example, there’s been a significant number of business closures, I think 4,000 this year alone in the Calgary area, because of the indirect relationship with the oil and gas.”

However, he says they’re staying optimistic about 2017 and into 2018 because oil and gas markets are reciprocal.

“So, by that time around I can see that either companies have become extremely efficient in what they’re doing, and naturally they can survive on a lower value for oil, or by that time I think the market’s going to come around,” he says. “There’s still a fair amount of investment that’s gone into this area. As soon as it comes around I think the market’s going to be good.”

To market, or not.

McCurry credits some of the revenue growth to grassroots marketing, such as advertising on Facebook.

“You can get your name around so easily for less money than you’ve ever been able to,” he says. “We’ve cut our marketing budget back to ridiculous numbers. We might hit half a percent in marketing.”

McCurry says that with Facebook, his company is able to target a specific client based on a set of qualifications, including age, what services they might want and where they’re located.

The cost isn’t high, and McCurry says they’ve been able to reach more potential clients than ever.

“The wealth is being spread massively,” he says. “We’re very acute in how we market. We don’t broadcast market, we just try to communicate to our clients. We have more leads than we know what to do with.”

In Shelton, Connecticut, Robert Hansen, owner of Robert Hansen Landscape, which currently employs eight to nine full-time employees and a total of 21 in season, doesn’t credit the growth to marketing.

“I have friends in the business and they’re way more adept to the younger generation with social Media,” he says.

“I don’t do any advertisement at all, other than through our website or word of mouth.”

He says the growth is because a lot of homeowners, as well as business owners, are looking to hire others to do their landscaping, maintenance and yard work.

“Nobody wants to do it themselves, and I think that opens a market for landscapers,” he says. “There’s plenty of work out there. Plenty of competition out there too, but it’s not competition that really affects us in our area.”

Capone doesn’t advertise either, something that is surprising since her company had so many inquiries this spring.

“Phone ringing off the hook, and we did zero advertising,” she says. “I was telling people, ‘I’m sorry, I can’t attend to that work right now,’ if they called in April, but, by the end of July, we could probably get to it. And some people wait for us.”

The political climate.

Normally, a year with a presidential election can cause uncertainty in the business, but, while McCurry has heard a few customers mentioning they’d have to cancel his services based on the outcome of the election, he isn’t worried about a big drop-off.

“You know, I think a lot of people are scared right now, and I feel like a lot of people are going to find, just like Y2K, the day after the election the world isn’t going to melt,” McCurry says.

“We have a lot of people that are still doing work with us, and a lot of them are threatening to say after Hillary or after Trump, we’re going to have to massively cut back, but how many times over the past 20 years have we heard people say that?”

“People are craving what we have and it could be because the labor force sucks so bad, people are having a tough time finding companies that really care about the details because the laborers don’t really care much about the details.” Daniel L. McCurry, Father Nature Landscapes

Capone says she doesn’t see much of an effect on her company, although she doesn’t know if that rings true for others in the industry.

“We’re very fortunate that all of our employees are here legally,” she says. “I’m sure there are landscapers out there who will be hit hard.”

McCurry says we’ve all experienced these Armageddon-type moments in life and it takes an emotionally mature person to understand what your client is going through and is patient about it.

“People go through their emotional ups and downs,” he says. “Everything’s going to come back and balance out.”

Being in Canada, Kovacs says he doesn’t know how the upcoming election might impact his business.

“There’s a direct relationship between Canada and the U.S.,” he says. “They’re the largest trading partners.”

Into the future.

Confidence is high, but do landscapers see it waning anytime soon?

“I feel confident in my business,” Hansen says. “I can’t answer for other people, but I see continued growth. We’re to the point where we can keep growing. We always have work.”

Capone says she also doesn’t see her company losing confidence, but isn’t as sure about other companies.

“Landscapers who are out there and have specific crews just for design or construction, they were the ones hurting in 2008,” she says.

“We don’t expose ourselves to that level. Grass always grows and here in the Northeast, there’s always people who need their lawn mowed.”