2015 lawn & landscape state of the industry report
TRANSCRIPT
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State of the Industry The trends and data landscapers need to know to thrive in 2016.
Chuck Bowen
Editor and Associate Publisher
Lawn & Landscape
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What we’ll cover today• The ‘average’ landscaper
• The state of the industry
• What customers think of you
• Key trends for 2016 and beyond
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A post-recession industry
• The economic hangover is over
• Customers are spending again
• The market is consolidating (again)
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The ‘average’ landscaper• (Caveat: This person doesn’t exist.)
• But, in 2015 the average landscaper:• Employs 6 people • Earns $217,000 in annual revenue • Pays himself about $50,000• Pulls in net profit of 14 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
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Service breakdown
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Fastest-growing service in 2015
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2015 revenue
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Revenue make-up by property
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Will you turn a profit in 2015?
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Price changes since 2012
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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.
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Customer perceptions• Grow the Market studies in 2013 and 2014
• Homeowner and commercial property managers
• Shows challenges and promise• Trust and price
• Value of greenspaces
• Planned work
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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
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Whom they ask first
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But what about hardscaping/installs?
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• 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
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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
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Why they fire• 69% – problems with services/jobs are completed
properly
• 19% – poor customer service
• 5% – poor communication
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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.
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6 key trends for 2016 and beyond1. Water, water, water
2. Labor challenges (H-2B vs. domestic)
3. Stress
4. Business systems/technology
5. M&A/private equity investment
6. Regulations
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Trend #1 – water
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Trend #1 – water• Rates are going up
• It’s only getting drier
• Infrastructure is crumbling
• This is an opportunity
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Source: 2015 Circle of Blue research
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Trend #2 – labor• You need a recruiting and
retention program
• This requires investment of money and time for training
• What’s going on with H-2B? That’s a great question. Let me know if you have the answer.
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Trend #2 – labor
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How does labor hold you up?
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How do you use the H-2B program?
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Trend #3 – stress• Not new, but more openness to discuss it
• “My truck feels more like a prison every day.”
• Aging owners stuck with no place to turn
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Trend #4 – technology• Software systems
• Taylor Milliken
• Cub Cadet and Bluetooth
• Exmark and Red technology
• Mowz/Plowz/Pros.com
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Trend #5 – M&A/PE investment • KKR and BrightView is not LandCare 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
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Trend #6 – regulations• H2-B is consistently inconsistent
• Minimum wage hikes in states and at the federal level
• Overtime regulations coming down from the DOL
• Patchwork regulations of other inputs
• Stormwater taxes
• WOTUS
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Ideas to steal• Technology (mobile devices, labor and back-office
management)
• Communication (text and email alerts)
• Recruitment and retention programs
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• Make yourself more valuable to your clients
• Give them a heads up on services that you’ll be doing, upcoming weatherand options for services
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Final thought(s)
• It’s a great time to be a landscaper
• 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
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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
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Questions, comments, concerns?• Chuck Bowen
• 216-393-0227