Landscape and Irrigation recently conducted an electronic poll of its readers in the landscape contractor and lawn care service/maintenance contractor categories. The poll was conducted to determine how the economy has impacted businesses in these two segments during the past year and to gauge respondents’ feel for where their businesses are headed during the next six months. The results are presented here.
The past year in business
Not too surprisingly, many companies have been forced to make drastic changes during the past year. Only 24 percent of all respondents said that they have not been forced to make any changes during the past year, and it is “business as usual.” The majority of respondents have had to make changes in several areas:
50.7 percent of all respondents have had to reduce their labor force.
46.3 percent of all respondents have had to reduce the amount of equipment purchases.
26.9 percent of all respondents have had to cut their prices.
16.4 percent of all respondents have had to reduce their marketing and customer-service costs.
49.3 percent of all respondents have had to make other cost-cutting moves.
Equipment purchases this season
Closely reflecting the trend of the past year, 48.5 percent of all respondents do not plan to purchase any new equipment during the next six months. Thirty-two percent of all respondents do plan to purchase new handheld power equipment in the next six months, followed by mowers (25 percent); computers, GPS or other technology (14.7 percent); and new fleet vehicles (13.2 percent). Only a very small percentage of all respondents (2.9 percent) plan to purchase loaders or other large machinery in the coming months.
Once again mirroring the trend of the past year, 45.5 percent of all respondents do not plan any hiring or training in the next 6 months. However, many companies are planning some sort of improvement to their workforce in the coming months, with 24.2 percent of the respondents planning new full-time hires, 27.3 percent planning new part-time hires, and 22.7 percent planning some sort of formal training, accreditation or certification of their existing crews (obviously, many respondents plan to make more than one of these improvements in the coming months).
Evolving business models
Companies are obviously adapting to the down economy by evolving their business models. Only 14.9 percent of all respondents said that they do not anticipate any changes from their existing business model during the next six months. When it comes to changes to their business model, 70.1 percent of all respondents said they plan to increase their focus on their existing customer base and improved customer relations; 50.7 percent of all respondents said they plan operational
Only 24 percent of all respondents said that they have not been forced to make any changes during the past year, and it is “business as usual.”changes (adding or reducing the workforce, streamlining business functions, etc.); and 43.3 percent plan to increase marketing and promotional spending. Once again, many of the respondents are clearly planning on making several of these changes. Only 7.5 percent of all respondents anticipate a decrease in marketing or promotional spending.
When it comes to that business evolution, 43.1 percent of all respondents said that they are not likely to add to their existing services in the next 6 months. However, 27.7 percent of all respondents anticipate adding “environmental, green or sustainable offerings” to their existing business model. The trend toward “sustainable” offerings clearly outdistanced other potential new services, as only 10.8 percent of all respondents said that they plan to add irrigation installation to their services, 9.2 percent plan delve into the interior plantscaping arena, 9.2 percent look to add Christmas décor or other seasonal offerings, 7.7 percent will expand with design/build services, and 3.1 percent are planning to add pest control services (7.7 percent of our respondents already offer all of these services).
Our contractor poll is only a sampling of the industry, but it does reflect that most businesses have been impacted severely by the down economy. However, it also shows that professionals in our industry are continuing to market themselves, build customer relationships, and expand and evolve to meet changing client needs.