2015 lawn & landscape state of the industry report

State of the Industry The trends and data landscapers need to know to thrive in 2016.

Chuck Bowen

Editor and Associate Publisher

Lawn & Landscape

What we’ll cover today• The ‘average’ landscaper

• The state of the industry

• What customers think of you

• Key trends for 2016 and beyond

A post-recession industry

• The economic hangover is over

• Customers are spending again

• The market is consolidating (again)

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

Service breakdown

Fastest-growing service in 2015

2015 revenue

Revenue make-up by property

Will you turn a profit in 2015?

Price changes since 2012

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 studies in 2013 and 2014

• 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.

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

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

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.

Trend #2 – labor

How does labor hold you up?

How do you use the H-2B program?

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

Trend #4 – technology• Software systems

• Taylor Milliken

• Cub Cadet and Bluetooth

• Exmark and Red technology

• Mowz/Plowz/Pros.com

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

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

Ideas to steal• Technology (mobile devices, labor and back-office

management)

• Communication (text and email alerts)

• Recruitment and retention programs

• Make yourself more valuable to your clients

• Give them a heads up on services that you’ll be doing, upcoming weatherand options for services

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

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