Landscape and Irrigation and its sister publications -- Arbor Age, Outdoor Power Equipment and SportsTurf -- have embarked on an editorial quest to provide you with information about the current economy, the stimulus package, and what it all means to the green industry. Our findings will be presented during the coming weeks on our Web sites, followed by in-depth articles in our upcoming issues. In this installment, we spoke with Professional Landcare Network (PLANET) President Jason Cupp, CLP, and PLANET’s President-elect Bill Hildebolt, Ph.D., CTP, CTP-CSL.
The economy & the green industry, part one: PLANET optimism
Landscape and Irrigation and its sister publications — Arbor Age, Outdoor Power Equipment and SportsTurf — have embarked on an editorial quest to provide you with information about the current economy, the stimulus package, and what it all means to the green industry. Our findings will be presented during the coming weeks on our Web sites, followed by in-depth articles in our upcoming hard copy issues. In this installment, we spoke with Professional Landcare Network (PLANET) President Jason Cupp, CLP, and PLANET’s President-elect Bill Hildebolt, Ph.D., CTP, CTP-CSL.
L&I: Would you say that the passing of the economic stimulus is positive or negative for the professional lawn care and landscape industries, and why?
Hildebolt: The passing of the economic stimulus is a positive for the professional lawn care and landscape industry, as it includes a $35,000 life preserver for small businesses that are struggling to make payments on existing debt. The Small Business Administration will subsidize the interest on the loan, and small businesses will have a year before they have to start repaying it.
While the majority of the economic stimulus package represents spending programs, there is a small portion that offers tax breaks for individuals and businesses. Following are a few examples of tax benefits included in this bill that can be beneficial to businesses within our industry:
Bonus depreciation extended: To help boost new equipment purchases, “bonus depreciation” has been extended to allow a 50-percent “bonus” write-off for the cost of new equipment a business buys and starts using this year. This applies to businesses of all sizes that invest in tangible property or computer software, as well as in improvements to leased property. Bigger expensing write-offs for depreciable property: Higher expensing limits for depreciable property that expired in ‘08 have also been extended through ‘09. This allows businesses to immediately write off up to $250,000 of tangible personal property placed in service this year. This will allow you to recover the cost of major asset purchases; however, these provisions might not be around for long, so moving up equipment purchases to get the tax benefits now might make sense. Be sure to check with your tax adviser about state tax provisions since not all states conform to the federal bonus depreciation provisions. Estimated tax relief: Reporting income from a small business on your personal tax return will allow you to get a small break on the amount of estimated taxes required to avoid underpayment penalties. Tax breaks for hiring: The Work Opportunity Tax Credit (WOTC) Program has been expanded to include two new targeted groups — unemployed veterans and young people between 16 and 25 years old who haven’t been employed or attended school in the past six months. Those businesses that hire such individuals can qualify for a $2,400 tax credit per worker.
Cupp: There are infrastructure funds being used for various purposes to include highway work that uses green plants (beautification, etc.) that will give our members work at the state, city, and county levels. This will allow them to keep the contracts they already have in place. Overall, once the economy gets going again, all will benefit with the extra money to use on lawns and landscapes.
L&I: What type of feedback are you receiving from your members regarding the stimulus?
Hildebolt: Our members are in a holding pattern, as they wait to see how this will all work out. Each state will determine the amount of money companies receive and how they will and can spend it. We expect the state associations to help track that information. This is another reason state associations have to play active roles in the state legislative and regulatory process so they do not get overlooked. Those that work with regulators and their elected officials will be best able to benefit from any chances to bid on government contracts and to take advantage of any opportunities they discover. PLANET will continue to search for ways our members can benefit.
L&I: How has the recession affected your members most acutely?
Our members are not waiting for the current economic cycle to right itself. Instead, they are leveraging their creativity, experience, and resources to weather the storm and position their companies for future growth.
Cupp: There is no doubt that the current state of the economy is affecting everyone in the green industry. It seems as though every day the news headlines are painting another difficult picture of our financial future. However, we have found that our members are not waiting for the current economic cycle to right itself. Instead, they are leveraging their creativity, experience, and resources to weather the storm and position their companies for future growth.
We recently surveyed some of our members, asking them to share tangible ways they are weathering this storm. Examples included:
Marketing: This is not the time to keep a tight fist on marketing and promotional dollars, members told us. Instead, they will continue to promote and market their companies, albeit with a more focused effort. Operations: On the operations side, members tell us they’re walking a tightrope between providing excellent service and saving money, from vigilantly tracking all hours, looking at each job from a cost control standpoint, and applying Lean principles, to reducing staff travel and staging time. Finance: “Revenue” will be the watchword for 2009. Members are encouraged to focus on generating and collecting revenue, along with taking what one member refers to as “extraordinary efforts to study cash flow and plan for the next day, week, month, quarter, or year. Sales: Members want to keep the clients they have by making sure they interact with and maintain regular communication with each of them.
L&I: What are you recommending to your members — or doing for your members — during this economic downturn?
Cupp: As I sit and reflect on the impact that the economy has had on my own company, and how we all are attempting to weather the economic storm, I am reminded of PLANET’s incredible membership and association. PLANET — its leadership and staff — are completely committed to delivering outstanding membership value. In fact, there is nothing more valuable to me right now than my PLANET
Here are some of the things PLANET is doing to serve its members:
The PLANET Day of Service helps to raise visibility of member companies in their communities, and this can increase employee morale and lead to more business. This event is an awesome way to get much-needed exposure in your local community while serving your industry and association with a give-back mentality.
The PLANET Bookstore offers resources to assist members in operating their business. They can place their order online at LandcareNetwork.org or call 800-293-5542.
PLANET offers free membership to students who are enrolled in a PLANET-accredited program, belong to a PLANET student chapter, or participate in one of the industry’s leading events — Student Career Days, an excellent venue to find the best new team members for your company. Student members are exposed to member companies every time they receive PLANET information.
PLANET human resources, legal, safety, and public relations consultants provide no-cost advice to members. I personally have found the free services of these consultants to be worth thousands of dollars per year of PLANET membership value-added service.
The certification program has been strengthened and is growing. Certified individuals have an edge over the competition in the bidding process. As one of the first Certified Landscape Professionals in my community, I have found that certification provides a tremendous advantage over my competition — something very valuable in a selling environment.
PLANET’s affinity partner programs essentially pay for the cost of your membership. Current programs, such as Staples Business Advantage for discounted office products and American Profit Recovery for low-rate debt collection services, provide cost-saving opportunities to PLANET members.
PLANET’s safety programs, including its STARS Safe Company Program, CNA partnership, and many safety publications in the PLANET Bookstore, enhance workplace safety and can help reduce insurance premiums.
Hildebolt: As we plan for this year’s GIC conference, October 28–31, we are looking at bringing in speakers to discuss the economy and action plans for navigating it. It’s important that we continue this dialogue throughout the year and provide as much assistance as possible to our members.
L&I: What is your outlook on economy long term?
Cupp: As an industry that has enjoyed exceptionally strong economic and financial success over the past 10 years, we believe that economic stability will return based on the general public’s increasing awareness of the value of the products and services we deliver. Our messages on the environmental, aesthetic and economic benefits of healthy lawns and landscapes are being embraced by growing numbers of consumers. We will continue to aggressively promote these messages.
In December, Specialists in Business Information (SBI) released a study on the landscape industry that predicts that the industry will grow 10 percent over the next five years. This is growth at a slower pace than the industry has seen over the past five years but, in this economic climate, growth projections for any industry are extremely positive.
My hope too is that the industry will continue to embrace new technologies, including communication, to further strengthen the industry and elevate the industry’s role as a steward of the environment.
Hildebolt: In 2009, we believe that the H-2B cap will be raised, the economy will begin to show signs of improvement, and consumers everywhere will continue to recognize the environmental, aesthetic and economical benefits of maintaining their lawns, landscapes and community green spaces.
As more universities and laboratories study the importance of carbon sequestration in slowing global warming, all will come to realize the significance, and importance, of our products and services.