EDITOR'S NOTE: This week's special online features on the state of the landscape industry supplement our annual State of the Industry Report, which is included in the October 2001 issue and will be mailed to readers next week. Click here for a sneak peak of the Lawn & Landscape Top 100 companies for 2000.
Many contractors who offered multiple services this year had an advantage over those who focused on just one service.
"Being a full-service contractor is helpful," offered Kory Ballard, president, Perficut, Des Moines, Iowa. "It hasn't rained here in almost 10 weeks and we are in drought-like conditions. As maintenance slows, our irrigation division has seen record sales. I think the diverse companies will better handle any economic slowdown."
Many contractors who experienced extreme drought conditions this year noticed surprising growth in their irrigation divisions, and they are thankful for it. A late spring, wet June and very dry July limited Michael Hornung's lawn applications, but jump-started the irrigation division.
"People are feeling that irrigation is more of a necessity when they are building homes now," noticed Hornung, president, Valley Green, St. Cloud, Minn.
Irrigation growth also covered the loss in lighting business Hornung experienced. "Our lighting franchise did only half of what it did last year," he said. "Lighting is an extra - it's a nonessential item. We've started visiting customers on Christmas lighting early this year, so maybe that will help out."
But holiday lighting isn't predicted to experience strong growth this year either, according to Jeff Oxley, operations manager, Swingle Tree Co., Denver, Colo., who said that in the past couple months he has seen some signs of a recession in his area. "We'll be more hard-pressed come November," he said. "We do holiday lighting, and I don't think that's recession-proof. You can go to Home Depot and buy Christmas lights. People who have disposable income who don't want to do the work themselves - that's the only thing that is going to help us survive that market."
Some contractors are even expanding into different markets now to protect their businesses in case a recession moves their way. Robben Salyers, president, Jake's Gardens, Maple Plain, Minn., for instance, noticed that many contractors don't like doing bonded work, such as schools and parks, because these jobs are more administratively difficult and carry higher risks, so he bid more of this work.
"I decided to do more heavy schoolwork this year because the bonding referendums have been positive and in our favor," he said. "Also, fewer guys are bidding this work so there's less competition. They're fast-moving projects - they want you in after the last day of school and out before the first day of school. But, despite the extra work, these are safe projects."
By safe, Salyers means that schools have a budget for this work, and he won't have to fight to receive payment. Lately, this is becoming an issue for some contractors who have noticed that some potential clients have become too financially high-risk this year to pursue. "I'm concerned with mortgage delinquencies right now in the residential market - they are on an upswing," Salyers pointed out. "I have some clients that are high-risk because they are in over their heads in credit card debt and their mortgage is poor for awhile. I just have to watch them real carefully. I can't allow them to raise too high of a bill because that's when they become a problem."
The author is Managing Editor of Lawn & Landscape magazine.