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DENVER, Colo. – The Associated Landscape Contractors of Colorado held a CEO Exchange in November to discuss the greatest challenges, trends and opportunities facing landscapers and lawn care operators in the Rocky Mountain State.
The discussion was moderated by ALCC president and CEO of Terracare Associates Dean Murphy. The panel consisted of:
- Jim McCutcheon, President and CEO of High Grove Partners in Atlanta, and President of PLANET’s board of directors.
- John Alderman, President and CEO of DBC Irrigation Supply
- Mike Leman, President and CEO of Singing Hills Landscape
- Zachary Johnson, President and CEO of Green Ink Designs, and a professor in the Landscape Design and Contracting program at Colorado State University
And while the event took place in Colorado, the trends and challenges they discussed are shared by landscapers across the country. Read on to see what they’re dealing with out west, and how you can learn from them.
1. Regulations and contractors’ seeming indifference. All the panelists complained of the ever-increasing burden of government regulation, especially the current debate about the EPA’s expansion of the Clean Water Act that could dramatically impact how the green industry applies chemicals. McCutcheon called on audience members to get more involved with their state associations and PLANET’s lobbying efforts. “The industry doesn’t take enough time to invest in regulations and pay attention to what’s happening the halls of government,” he says.
Click here to read more on the EPA''s Clean Water Act
2. The industry’s often negative perception. It’s no surprise that landscapers have a labor problem, and have for a long time. Johnson says he encounters parents of prospective students who don’t understand the career prospects for a landscaper. “All people want to be successful … and do good things for mankind,” he says. “The perception of the industry is that all we do is push dirt and mow lawns, and while we do those things, that’s not the extent of what we do. … The challenge is convincing parents of the opportunities that exist for their children in the landscape industry.” He added that the average starting salary for his landscape management students is $44,000.
Click here to read about finding employees in our State of the Industry report.
3. The dilemma of licensure. There was much discussion of the problem of low-ballers, and little agreement on how to define what, exactly, a low-baller is. Are they simply contractors who don’t operate professionally? Or have no insurance? Or just those who operate unsafely? The landscape industry’s low barriers to entry are at once a boon and a burden. Johnson suggested licensure as a possible answer. Alderman, from DBC Supply, says the distributor’s Texas operations report irrigation licenses have helped contractors compete against low-ballers, but aren’t a silver bullet.
4. Water. Colorado has been hit hard by drought in the past few years, and contractors have had to adapt. Alderman says the most important technology a contractor can use comes from the irrigation world, especially smart controllers. In the Austin and San Antonio markets where DBC operates, restrictions limit customers to watering once every two weeks. McCutcheon, who’s Atlanta-based business has had to deal with severe water shortages of its own, says water management services make the most economic sense of all “sustainable” services a contractor can offer. And Johnson, who also runs his own landscape company, says companies are going to have to retool to deal with a world with very little – or maybe even no – water for their landscapes. And Murphy, who’s company operates also operates in California, says he’s been adding more and more crews to remove turf from clients’ yards.
5. Healthcare. While the true impact of the Affordable Care Act on many small businesses remains to be seen, most landscapers are worried about it. McCutcheon, who employs 220 people and has always offered some sort of insurance, says under the new regulations, his employees will have worse health care and his company could lose as much as $300,000.
Click here to read about healthcare reform from our State of the Industry report.
Other notes:
- On service: McCutcheon says customers can’t differentiate your company by how well you mow, plant, water, etc. He’s not convinced that his customers, after a certain point, can tell the difference between a lawn mowed by his crews and one mowed by Brickman or Gibbs Landscape. You need to differentiate yourself by the level of service you offer customers. HighGrove, for example, is a certified real estate school, and offers continuing education courses for CEUs for real estate professionals, some of which are clients and many of whom are prospects.
- On Brickman and ValleyCrest fallout: One landscaper reported that he’d recently inked a new five-figure design job that would have gone to Brickman, but was now “too small” for the $2 billion-company to consider.
- On the key to success: Alderman, who sees tons of contractors come through his doors, says the best indicator for a landscaper’s success is whether he understands his costs. Failed landscapers often “grow themselves into failing,” he says. “Don’t be afraid to surround yourself with people who are smarter than you are … a team of people who can handle that piece if that’s not what you do well.”
- On understanding how you make money. McCutcheon stressed the importance of understanding the business side of your operation, and to run it like a business. “It doesn’t matter how big or small you are, you’ve got to focus on the business. You can’t survive if you don’t know how you make money. There’s a tremendous opportunity in the landscape industry to build wealth.”
- On true success: Leman shared this story about how to identify real success. He got a Facebook message from a daughter of one of his H-2B employees. It was a thank-you note. She had graduated from college and said that if her dad hadn’t worked for his company, that wouldn’t have happened.
- On options: Leman also shared this story about a job for a high-end residential client who, a year after construction, was having some problems with the pressure on his irrigation system. Leman told him he needed a 1-inch tap instead of a ¾-inch tap, at an extra cost of $10,000. They did the work, but turns out, the tap wasn’t the problem. The client demanded an immediate refund or he’d sue. Leman couldn’t afford either, but he fixed the problem. He reported that his designer – a frugal Minnesota native – hadn’t thought to offer the client a more robust (read: expensive) system. This customer, who ran a chain of car dealerships, explained the 20/70/10 rule of car sales: 20 percent want no options/base model, 70 percent want a couple of upgrades and 10 percent want it loaded. He wanted a loaded landscape.