State of the Industry

What landscapers and lawn care operatorsneed to know to grow in in 2017.

Chuck BowenEditor and Associate Publisher

Lawn & Landscape

5 things we’ll cover today• What the ‘average’

landscaper looks like• The state of the industry• What customers think of you• Key trends for your business

in 2017 and beyond• How you can take advantage

of them to grow

The ‘average’ landscaper• (Caveat: This person doesn’t exist.)• But, in 2016 the average landscaper:

• Employs 10 people • Earns $339,000 in annual revenue • Pays himself about $59,000 (if he pays himself)• Pulls in net profit of 16 percent

• Does full-service landscaping for mostly residential accounts

• The owner is the primary salesman, especially in a design/build business

• He’s also still working in a production capacity during the day and doing back-office work in the evenings and weekends

30%

29%

24%

6%

6%5%

How do you pay yourself?Trial and error Weekly budget plus bonsues A little when it's slow; a lot when it's busyLike a crewmember, hourly A percentage of profit Other

Service by profits

Fastest-growing service in 2015

2015 revenue

Landscapers go mobile• 8 out of 10 contractors use a smartphone for

work. • About 60% of landscapers are on Facebook. The

next biggest platform is Linkedin, and then Twitter.

• They’re using these devices to take photos and text with their employees and customers, as well as to access urgent information like the weather reports on the go.

Customer perceptions• Grow the Market study in 2016• Homeowner and commercial property

managers• Shows challenges and promise

• Trust and price• Value of greenspaces• Planned work

Homeowner perceptions• 62% say landscape installations are prohibitively

expensive (down from 2013)• 73% say landscaping increases the value of their

home • 54% say green space around a home is an

important contributor to the environment • 46% say landscapers are professional

businesspeople• 39% trust the recommendations they get from

landscapers and LCOs they hire

Whom they ask first

But what about hardscaping/installs?

• 20% of homeowners are planning a major hardscape job in the next 2 years• Walkways• Patios• Outdoor kitchen

• More than half will likely hire a contractor

Property managers• What's most important when you decide

to hire a landscaper?• 52% say quality of work (jobs on time and

within budget)• Next highest is 19% a high level of customer

service• 8% relationship with the account manager

Why they fire• 69% – problems with services/jobs are

completed properly• 19% – poor customer service• 5% – poor communication

How to win their hearts• What one thing could a service provider do to

instill your confidence in their company?• 53% – have excellent communication• 13% – offer multiple services • 1% – at the bottom of the list is have the lowest bid

• You need good account managers who can communicate your company’s value to your commercial clients.

Key trends for 2017 and beyond1. Water, water, water 2. Labor challenges (H-2B vs. domestic)3. Stress4. Business systems/technology 5. M&A/private equity investment 6. Regulations

Trend #1 – water

Trend #1 – water• Rates are going up• It’s only getting drier• Infrastructure is crumbling• This is an opportunity

Source: 2015 Circle of Blue research

What you can do• Remember: Customers need water, want to save money• Expand irrigation services• Focus on water management • System upgrades• Permeable pavers

Trend #2 – labor• Biggest bottleneck for

landscapers, regardless of geography, services or size

• H-2B isn’t perfect, but it’s what we’ve got

• Other sources• Focus on recruitment

Trend #2 – labor

How does labor hold you up?

How do you use the H-2B program?

What you can do• Stop complaining• Develop a solid recruitment and retention plan• Attend the National Collegiate Landscape Competition

Trend #3 – technology• Software systems• Taylor Milliken• Cub Cadet and Bluetooth• Exmark and Red technology• Mowz/Plowz/Pros.com

What you can do • Automate and integrate what you can• Find a software that makes sense for you (and your team)• Use the data you have• Schedule time to review this on you calendar

Trend #4 – M&A/PE investment • KKR and BrightView is not LandCare USA by a

long shot• TruGreen buying Scotts LawnService• SiteOne on the move with more acquisitions • (And these are just the major ones)• Opportunities for you:

• Making your own acquisitions • Cashing out• Finding new, talented employees

What you can do • Test the waters for acquisitions or sales• Helps you fix what’s broken before you need to • Keep a lookout for good hires • Focus on your “local” message and make hay while the big guys are

busy with integration

Trend #5 – regulations• H2-B is consistently inconsistent • Minimum wage hikes in states and at the

federal level• Overtime regulations at the DOL• Patchwork regulations of other inputs • Stormwater taxes• WOTUS

What you can do • Join the National Association of Landscape Professionals• Join your state association • Talk with your local representatives• You pay taxes• You employ constituents • You invest in your community • Put a face on the industry

Trend #6• Trump overshadows

everything we’ve discussed today. • He could make these

changes worse or eliminate them entirely. • Time will tell if he can

work with Congress to change EPA, DOL, or H-2B

Final thought(s)• It’s a great time to be a landscaper – unprecedented optimism and

growth• The industry has a great story to tell and you are all ambassadors for

that story• As much as is wrong in the industry – H-2B and the labor crisis and

chemical regulations – a lot is right and it’s incumbent upon everyone in this room to spread that message and do something – anything – to effect some positive change, however small

Cool stuff from L&L• Our iOS app and new digital magazine• The Lawn Care Radio Network on iTunes• Our scholarship fund for college students • The Benchmarking Your Business web

app • Our many social media outlets

Questions, comments, concerns?• Chuck Bowen• cbowen@gie.net • 216-393-0227