It’s been about two years since Georgia’s weather drastically changed from a wet climate to one where rainfall is scarce. And as landscape contractors grapple with strict water restrictions, a new threat – the dismal state of the nation’s economy – has entered the foreground, giving them one more thing to worry about in the Peach State.
It will take more than savvy business plans to keep these companies afloat. For those who want grow and prosper – or even survive to 2010 – they’ll need to be creative and open to pursuing new and different ventures.
| Forecasters Call for Rainy Winter |
According to the Old Farmer’s Almanac, Georgia may get some of the rain it’s been waiting for this year. In January, the southeast section of the United States, which is comprised of Georgia and the Carolinas, is expected to get 5.5 inches of rain – about 2 inches above Georgia’s normal precipitation for the month. February’s numbers climb even higher to 6 inches across the region – a jump of 4 inches above Georgia’s normal amount of rainfall. |
Dry Spell. Rain may have been plentiful in December, but experts agree Georgia’s drought is nowhere near finished.
“We’ve had really great rainfall, typical rainfall for December, but the problem is Lake Lanier is still about 15 feet below its normal, summer level,” says Mary Kay Woodworth, executive director of the Metro Atlanta Landscape & Turf Association. “If rainfall continues at a normal pace it will be full by the fall of 2009, but that’s all dependent on our average rainfall. You can’t predict the rain.”
With the drought came a new set of obstacles for contractors to tackle. To combat the lack of rainfall and rapid population growth in Atlanta, the state imposed watering restrictions in 2007 in an effort to reduce water consumption.
Woodworth says most of northern Georgia, including Atlanta, remains under Level 4 Drought Restrictions, the most strict variance, which only allows residents to hand water landscapes three times a week for 25 minutes each day. It also permits the watering of newly installed landscapes three times a week for 10 weeks.
Since the implementation of the restrictions in September 2007, Jim McCutcheon, CLP, CEO of HighGrove Partners in Austell, a northwest suburb of Atlanta, says the industry lost about a third of its market share value.
“The landscape and green industry in Georgia was about $8 billion prior to the September declaration,” he explains. “By the time everything shook out it lost about $3 billion in its market share.”
Aside from restrictions, the drought single-handedly took its toll on the industry as well.
“It’s very difficult,” says Dick Bare, CEO and president of Arbor-Nomics Turf in Norcross, a northeast suburb of Atlanta. “People are calling and saying, ‘Let’s suspend services until we see what’s going on with the drought.’ Most people are saying there’s no sense in paying for brown grass – it’s given a lot of neighborhoods an excuse to let their lawns go.”
Economic Hardships. As contractors struggle with watering restrictions and a lack of rainfall, the dismal state of the nation’s economy recently climbed into the forefront of problems that must be dealt with this year.
“The drought and water restrictions were one thing, but the economy – (specifically) the building market – was a double, triple whammy,” Woodworth says. “I think what we’ll probably see, as in any other industry, is some leveling out. It’s going to get worse before it gets better.
“It’s really tough,” she adds. “I think people are trying to maintain – some are reducing hours – just to keep costs down.”
And the state of the economy is not going to change overnight, says Tom Delaney, director of government affairs for the Professional Landcare Network. The collapse of the housing industry already has taken its toll on the green industry, in addition to labor challenges and fuel prices.
He cites unemployment as a double-edged sword. Although contractors aren’t getting the same amount of workers they did last year through H-2B visas, it may, in the end, be a good thing.
“It might not hurt as much to have less business,” he says. “It still may be fewer workers but maybe that’s needed because of the economy.”
For contractors like Bare, it could turn a year of flat profits into a positive.
“Business is going to be difficult,” he says. “Getting a sale now will be a lot more challenging. I think we’re going to see that flat is good – if you want to grow it’s going to be through expansion into other towns and cities. It’s not like it was before when we were able to just pick the low-hanging fruit.”
Creativity, Innovation Keys to Success. An economy in recession doesn’t have to be bad thing, McCutcheon says.
“I think one of the most important things right now is not to feel down in the dumps about it,” he says. “These tough times do go away and the ride up is typically longer and a lot more fun. Be creative and innovative with customers – now’s a great time to instill change in a company.”
For some contractors, Georgia’s hardships could give them the push they need to grow.
“The silver lining to all of this is the companies that had good business plans – those who are modern in the way they do business and have reacted (to the economy) will have a great opportunity,” Woodworth says. “(These factors) will continue to weed out the less professional landscape contractors. That’s a positive for the industry as we struggle with people undercutting prices. I think that will be beneficial when we come out of this.”
Bare also expects good to come from the drought and dreary economy – but only for companies willing to change the way they do business. There are several things contractors can do to increase their company’s appeal, they just have start looking for new ways to communicate with consumers.
“It just costs more to make a sale now,” he explains. “We’re looking into co-oping with other industries, maybe doing TV or getting a video billboard. We need to look at new ways rather than just direct mail and going door-to-door.
“We, as business people, have to do more networking and try to get with competitors or people in other industries. We need to pick the brains of innovators to figure out a different twist on what we can offer that’s different from our competitors. We just have to have different twists to figure things out and get ahead of the competition in these hard times so we get that phone to ring.”
McCutcheon agrees.
“If everybody plans to run their businesses the same way they did in 2008 and 2007 they won’t be here,” he says. “Those are the companies that won’t survive.”