Two Veterans Of The Industry: Industry Insights

In the 22 years I have been in the green industry, I have really seen the industry mature. This evolution has increased rapidly over the past eight to 10 years. This fast pace of growth has stemmed from educated professionals working on business rather than skilled practitioners working in their businesses. Associations like Associated Landscape Contractors of America have led the way in raising the level of business acumen in the industry. Seminars and networking opportunities where best business practices are shared are now the norm rather than how to sessions on field techniques.

The direction now is an even heavier emphasis on becoming better businesspeople. If you do not, you will not survive. Competition is not just from down the street anymore. You will find challenges from:

• Large national corporations gaining a larger market share and driving down prices in the process;
• Clients who are more astute and demanding more; and
• Government regulatory agencies applying ever increasing pressure on small businesses.

This competition will be even more acute in the maintenance segment of industry. While more clients will be demanding maintenance services, more and more contractors will be making the move toward providing these services. Traditional installation contractors are now moving toward more maintenance due to its ease of replication. More contractors will move into the market due to the ease of entry.

Consolidation will be a part of this trend. Although consolidation is not happening at such a torrid pace as it occurred over the past two to three years, consolidation will still happen, but more on a state and regional level in a quiet way. The top businesspeople will look to grow their maintenance businesses through acquisition. This technique will provide not only market share but, more importantly, more top employees.

Lack of qualified employees will be the primary limiting factor to growth as the economy continues forward. Clients will continue to demand more services both on the residential and commercial fronts. Residential clients value their time at home and taking part in leisure activities. They will demand that contractors create a personal oasis and then maintain it. The growth in disposable income and dual-income families will fuel this.

On the commercial side, business owners and developers will continue to see the value of a well-designed and well-maintained landscape. They will use the landscape as their competitive advantage. With stress levels increasing in the workplace, astute owners will also look to the landscape as a way to provide a pleasant working environment.

With all of this demand, the key to taking advantage of the opportunities available will be getting your fair share of employees. With the pool shrinking, nontraditional sources of labor will come into play. This means cross-cultural workforces and the need to allow flexible work hours and days. Progressive contractors have moved in that direction. Others must move there now or have potential growth shackled by lack of employees.

The other solution to the labor crunch will be mechanization of traditional landscape functions. While some advances have come to the forefront, the industry still lags well behind others in mechanization. Dependence on hand labor will continue to stifle the industry’s growth as the pool labor dries up.

The other aspect of the need to reduce dependence on labor is the introduction of growth inhibitors and growth regulators. Advances by agricultural researchers have begun to provide tools to reduce plant growth, which will reduce labor requirements. The potential for phenomenal growth is there. Advances will be more fast paced than in mechanization, but both will help to reduce the dependence on labor.

Finally, the biggest area we need to improve on in the industry is recognizing the value of our services and charging appropriately for those services. Clients already recognize the value and are willing to pay for excellent service. They are also astute enough to know that contractors are all too willing to cut their prices to get jobs.

This price-cutting does not just come from small contractors. It also comes from some largest corporations that are looking to buy market share. In both cases, these price reductions do nothing but set the industry back years. It also reinforces the vicious cycle of not being able to pay top wages for top employees. Until we all take pride in what we do and price our product accordingly, we will continue to hurt ourselves by taking money out of our own pockets.

Russ Frith
President
Lawn Doctor, Marlboro, N.J.

Overall, I would say the industry has never been any stronger. I think anyone can see that when they look at the numbers.

By "the industry," I’m talking about every segment of the macro green industry down into the more tightly defined disciplines within the business, such as lawn care and landscape. But the market has expanded aggressively and consistently for the last few years.

I attribute this growth to a series of factors. First, within the different generations there is an entitlement mentality. This means that some people believe they are entitled to the better things in life, and our services help deliver that. That’s one aspect to the industry’s growth.

Still, the single most significant reason for the industry’s growth over the last 10 to 20 years would be the increasing number of dual-income households. They really fall into our category of people to target for lawn care service.

These people struggle to find leisure time and are willing to buy that leisure time by paying us to take care of their lawns, along with household cleaning, gutter cleaning and other similar services.

Some of these services are new to people other than the most affluent since the suburban homeowners used to do all of this work themselves. But we’re not perceived as a service for just the upper class anymore.

Looking to the future, there are certainly some issues to address. There is a real debate around the notion of being full service or being a specialist.

I can assure you that I participated in those same debates 20 years ago. My conclusion 20 years later is that there is a market demand for both models of business since they really perform two different services.

Certainly, there may be some geographic or socioeconomic conditions that might favor one approach more than the other, but if you take a broad, industry-wide look, I think there is a place for both businesses. I’m sure, however, that this debate will continue.

There are a couple of key areas for us to address in the future. For starters, we have to recognize that our world is getting smaller.

This makes life more difficult for small, local companies than it is for companies with a regional, multistate or national presence. The reason why is obvious on the surface.

Just consider the change in the ability and speed in which people communicate. You can see dramatic changes compared to where we were 100 years ago. There has been a real progression from wagon trains to the Pony Express, to rail, to the telegraph, to the telephone, to the point where now we have the ability to instantly communicate with each other.

We need to look at that and the implication of high-speed data connections. The reality is that the world is much smaller, thanks to the Internet.

That creates a lot of opportunities and some potential risks if you don’t recognize these changes. The reality is that we’re not living in a vacuum.

If any aspect of our businesses creates public concern, this has the potential to affect every business in our industry, regardless of its location. I’m talking about issues such as spills, pollution and water quality.

The changes and dynamics of relationships between different businesses have the potential to affect us in ways they never did before. Politicians make deals and tradeoffs very frequently. This is neither good nor bad, but it is reality.

We have legislation in New York that makes no sense and is based on political expedience vs. science. With the speed of and varying means of communication, to say: "Well, that’s New York, so it doesn’t affect me," is burying your head in the sand as a businessperson.

Every lawn care service provider’s responsibility is to be active and aware of the regulatory and political arenas. Don’t be lulled into the false sense that the other guy will fight for your rights to ensure that laws and regulations are fair and workable.

All politics are local. And grassroots movements are often the most effective way to limit or squash proposed bills or regulations that adversely affect our business.

So, what do we do now? We must move to the next level, and each business in the industry must recognize that we all have a lot of things in common. We should spend less time worrying about who is big and who is small, and instead we should focus on the issues that can adversely or positively affect all of our businesses.