Results with worries

State of the Industry Report - 2021 State of the Industry Report

Even with lack of labor to supply chain issues, some landscape and lawn care companies are still growing at an impressive pace.

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Illustration by Michael Marsicano

Dee Larson

Owner, Landscape Gal • Northfield, Minnesota

It’s been a banner year for the residential, custom design/build business as the pandemic continues to put an emphasis on outdoor living.

“2020 was record-breaking for us. It was really good and busy,” Larson says. “COVID definitely attributed to the success — especially here in the Midwest…2021 has been absolutely no different. We’re already nearly sold out for the year.”

But despite all the growth, Larson says COVID has exacerbated one problem — labor.

“The challenge, which happened before COVID too, is finding people who are willing to work with their hands,” she says. “Finding someone who is not afraid to work outdoors instead of in front of a computer is hard…It’s not just digging holes. There’s a lot of skill to it.”

To combat this, Larson says she’s been willing to pay up.

“Finding people to do the work is the most difficult part, to be honest,” she says. “As a result of that, you have to pay people a living wage. You have to pay them a wage they can raise a family on, a wage they can pay a mortgage on.”

With an already small team of just five employees, Larson says paying a fair wage is essential to keep them from looking for work elsewhere.

“I have one employee who drives quite a distance to work, and he thought he could drive somewhere closer to home and work for someone else,” she says. “He found my pay rate was $3 to $4 more an hour than they were willing to pay him for his skillset, so he stayed.”

It seems to be working out for Larson, who says her employees are incredibly loyal.

“The shortest tenure on my crew right now is two years. I’ve got some who’ve been here for seven or eight years — they’re long-term employees,” she says. “They really become cohesive as a team, too. And company culture becomes really important.”

However, Larson acknowledges that because she’s paying her team more, her rates have increased. While it’s caused some perspective clients to price compare a little more, Larson says she isn’t concerned.

“Often landscape projects have sticker shock because of that,” she says. “Then they shop around and find out that it’s really the going price, and then they commit… I don’t know if society is accustomed to (increases) already, but they’re not going to have a choice.”

Justin Lingo

Owner, Green Shade Trees Inc. • Yukon, Oklahoma

Last year, the company grew 100% and doubled in size. Revenue hit $8.4 million. For 2021, Lingo says he expects the growth to be closer to 30-40%.

“This year has been a challenge,” Lingo says. He adds the majority of issues are surrounding supply chain disruptions.

“Almost everything from plants to PVC pipe to equipment is four to six weeks at a minimum,” he says. ‘We’ve been waiting three months now for some new equipment to come in just because they don’t have a chip for it, or they don’t have a hydraulic valve or something else. That’s been our biggest frustration.”

As a commercial landscape company and tree farm that services the whole state of Oklahoma, Lingo says they rely on renting trucks to transport material.

“Trucking shortages are a big issue for us right now,” he says. “We can’t get semi-trucks to haul material for us because they are in such high demand.”

Additionally, Lingo says the supply chain problems has caused prices to skyrocket. For example, the company is paying about $100,000 per week just for PVC piping. Because of this, Lingo says they’ve been forced to rethink their job costing.

“Our new estimates that we put out reflect the current price at bidding, plus an allowance,” he explains. “We’re putting 10% allowance on all materials, whereas a couple years ago, we’d just bid it at what the rate was. We think it’s going to go higher, so we’re putting a higher rate on there.”

However, most jobs are booked a year or so out, so Lingo says they are taking a hit for materials in that regard.

“For the jobs we already have contracts on, we’re having to eat the increases,” he says. “So, there’s no change orders because of higher prices.”

Lingo says the increased prices is attributing to more competition when Green Shade goes out to bid.

“The market is tighter than it was before,” he says. “This spring was very tight. There are a lot of guys bidding for the same work, and as the year’s gone on, some of those companies have quit bidding as much just because there is a lot of work right now. So, everyone’s replaceable.”

Despite this, Lingo says the work keeps coming in.

“If someone calls us for a job right now, we’re four to six weeks out because we have such a backlog,” he says. “And that’s just our short-term jobs. We have long-term jobs that won’t be done until August of 2022 and work that won’t happen until 2023.”

Dan Walmsley

Owner, Island Environments • Hilton Head Island, South Carolina

Walmsley says open communication with his customers has led the full-service landscape company to new heights these past two years.

“2020 and 2021 have been phenomenal years for us sales wise,” he says. “In 2020, we saw 40% growth and then we’re on pace to beat that this year.”

Setting clear expectations with new customers is at the forefront of this growth.

“We have open and honest conversations with our clients,” Walmsley says. “We tell people right off the bat that we’re not the cheapest company and we’re not the most expensive, but you’ll get the most bang for your buck with us.”

Pricing competitively on the island can be tough at times. Walmsley says he’s had to fend off lowball offers.

“One of the bigger problems we have around here is that we’ve got about 64 registered companies on Hilton Head and probably another 40 or so that are unregistered,” he says. “Trying to establish pricing to compete with people who don’t have the overhead is hard, but so is getting the clientele to realize that the people who don’t have the overheard usually don’t have the knowledge or knowhow.”

Even so, Walmsley says he won’t let the threat keep him from losing quality just to deliver a lower price.

“We’re trying not to look at any competition,” he says. “We’re trying to look at ourselves and how can we be the best Island Environments tomorrow and how can we be better tomorrow than we are today. So, a lot of our focus going into the winter will be on how to improve our own processes and procedures to deliver the best we can for our clients.”

Walmsley says his team will be ramping up training during the offseason and he experts there to be a few internal promotions as well.

Quality is essential to Island Environments, and another threat to that has been the labor shortage.

“Currently, we have 30 employees,” Walmsley says. “Normally we are in the 38-40 range.”

In order not to lose quality, the company has transitioned to smaller crew sizes and is looking at making additional changes to its maintenance routes.

“We’ve tried having thinner crews,” he says. “We’re on the verge of evaluating whether or not we need to drop some maintenance accounts. Normally, we like to run three-man crews and we just don’t have the people to do that at the moment. So, two-man crews have been the norm for us this year other than for our prime accounts.”

Ken Silvers

Owner, Ken Silvers Lawn Care • Findlay, Ohio

When Silvers restarted his business in 2014, he admits things were pretty stagnant for the first few years, but not anymore.

“This year, things have doubled,” he says. “All because I answer the phone and I’m out there and I’m recognized.”

Silvers credits his spike in sales to really focusing on his branding along with social media promotion.

“I got my website and I’m all over Facebook, so I’m being found,” he says.

Silvers says he’s posting Facebook Stories daily — featuring everything from his dog, Molly, to his hats, his mowers and his truck.

“The people in Findlay know who Ken Silvers is,” he says. “They see my truck parked at coffee shops with the big, giant logo on it. People ask me if I’m Ken Silvers and they’ll say, ‘I see your truck all over town.’”

Utilizing google and staying on top of SEO has also allowed Silvers to reach a wider audience in his town. He recommends taking the time to fill out a detailed Google Business Profile.

Silver says by embracing his name as the company’s, people form more of a personal connection with him.

“My name’s on there, and I’m doing the service,” he says. “I’m not trying to hide behind some other name.”

Silvers had a different landscaping company back in the 1980s, and he says that one got quite large. But now, he says by staying small he’s able to deliver better, high-quality service.

“I used to be big, but I decided that’s not who I am,” he says. “I’m Ken Silvers and I want to service my customers and I have to have the time to do it. So, I won’t take on another customer if it takes away from the 30 or so I have now.”

Keeping his work within a close radius is also helping Silvers to grow the business.

“I’m not in a big, giant market,” he says. “I do not go outside of Findlay within five miles. I can’t afford to go 20 miles one way for a lawn. So, I stay small.”

Even being a one-man operation, Silvers says he’s able to keep up with the competition and charge a fair price.

“People aren’t charging enough,” he says. “I’m charging $10 to $15 more than most people.”

Kim Bius

Owner, Kim’s Home and Garden • Huntsville, Texas

The 36-year-old company Kim Bius runs offers many clients annuals, perennials, ornamentals and even wind chimes. But Kim’s Home and Garden also has a landscape design branch for multifamily, commercial and estate clients, and they’ve been taking new orders every day. Bius says the company is solidly booked through October.

“We’re the folks in the industry who people will come to if they want something incredible made,” Bius says.

With six employees in the division, Bius also cites the labor shortage as a reason for consternation, even amidst steady revenue flowing in. The division alone — led by a foreman and a landscape designer who’s been at the company for 20 years — has produced roughly $600,000 in revenue in 2021 and will continue to rise.

Yet the labor shortage is familiar territory for Bius. What wasn’t familiar this season was uncharacteristic weather in Texas pushing back the start of their season and holding up production overall. The Texas freeze in February and, later, 36 inches of rain in a month pushed back when the company got rolling.

“The weather has been bizarre in my part of Texas,” she says. “We didn’t get kicked off until late April.”

Bius says that thankfully, her team managed the storm well. Despite a foot of snow around Valentine’s Day, they took every plant they had into a retail facility just to keep the plants alive. Then, when it was over, they had two giant storage containers with heaters in them for the materials.

It’s been a while since Bius had to move swiftly like that for freezing weather: She says the day she opened on January 2 in 1985, there was a major ice storm. With a strong sense of déjà vu looming as she kept up-to-date with Texas weather reports this year, she opted to move quickly.

“I just had a feeling how bad it was going to be,” she says. “I didn’t want to lose $100,000 in plants. It was my dime, so let’s get it done.”

Kody Ketterling

Owner, K.J. Lawn Maintenance and Spraying • Twin Falls, Idaho

Strong relationships helped Kody Ketterling’s company deal with the early goings of COVID-19, and now they’re helping the Idaho-based company manage supply chain complications, too.

Interestingly, Ketterling says he’s never met two of his clients, and there was one he met last year who lives all the way out in Pennsylvania but owns a property in Idaho. But frequent communication via an app and Zoom meetings has allowed his five-person team to stay close with clients. Ketterling says that nobody has canceled their services with him despite delays in when jobs can get done caused by an industry-wide shortage in supplies.

“You’re set out six, seven, eight months – you better order before you even need to order,” Ketterling says, adding that his “one-stop shop” company has seen delays in getting parts. It’s not just irrigation sprayers or plant materials — it’s pretty much everything. “Everything’s just been pushed out weeks and weeks and weeks,” he says.

The company largely does commercial work and has dealt with a lack of materials by not maxing out the number of jobs the company can ordinarily take on; instead, they’re largely servicing the same clients they usually have, albeit some jobs take another day or two because labor is as scarce as supplies. What’s more, a heat wave earlier this summer put parts of the West Coast through dangerous temperatures, which meant plants were also more susceptible to dying off early. So, Ketterling contacted his customers and offered a compromise.

“We told all of our customers, ‘You can either do this and void your warranty, or you can let us wait until it cools down,’” he says. All of his customers opted for the latter.

Ketterling adds that his company benefits from having had many of their customers for five to 13 years, so those relationships helped in difficult conversations. Besides, it wasn’t as though other landscapers in the area weren’t also dealing with intense heat, labor shortages and supply chain issues.

“We strive on quality versus speed, so we work pretty close with our clients,” Ketterling says. “We don’t care if we know you (from in-person meetings) or not, our deal is to do it and to approach it as if you’re there all the time. We don’t skip steps.”

Dana Irwin

Vice president of operations and COO, ExperiGreen • Mishawaka, Indiana

With six locations spread across Indiana, Ohio, Illinois and North Carolina, ExperiGreen has operated since 2016 and does 98% of its chemical lawn care work at residential sites.

As a newer company, the early goings of COVID-19 were frightening — Irwin can readily admit that now. In the Detroit market, pandemic restrictions were particularly tricky to navigate, as they had been shut down all of April when the season started in 2020.

“That was all of production, all the sales, so that really hurt us right when the season started,” Irwin says. “I think people were just kind of freaked out.”

But that was then, and this is now: Irwin says during the pandemic, his team beefed up its digital marketing unit and the results have been “especially good.” The business grew amidst the early goings of COVID, but in 2021, the company is growing past its targets.

“I think our digital presence and our digital marketing has really taken off this year,” Irwin says. “We have our own marketing team with a marketing director and a digital marketing manager, and she has really done a lot for us in building our website, improving our website, making it more interactive.”

ExperiGreen puts up two blog posts a week during the season and keeps up with its social media platforms. Irwin says the renewed focus on digital presence during a time where face-to-face has declined has helped — the company even redid its website just before the pandemic began and digital sales have skyrocketed.

“We built up some digital credibility,” he says, adding his company’s clients (single family homeowners) were able to still spend during COVID and were aided by stimulus money. “I think that demographic is a lot more confident about their economic situation, their job security.”

Of course, not all is perfect for ExperiGreen, but Irwin says their problems are issues the whole industry faces, namely labor. The unemployment rate continues to create high competition among companies trying to fill their trucks with new employees, and that also means a race to pay the best in the area has intensified.

“You’ve probably heard this from other guys, but the recruiting, hiring, staffing situation has just gotten that much more difficult this year,” Irwin says. “It’s tougher than it ever has been, and we’re paying more, too.”