Special Report: Economic Spotlight

It’s no secret that landscapers have opinions – lots of them. This includes our 2008 and 2009 Landscaper of the Year classes. These men and women come from across the United States; exhibit stellar landscape design, installation, and maintenance abilities; and they possess savvy business management skills. In short, they exemplify what it takes to be successful in the green industry. We asked this hand-picked crew how they’re dealing with the downturn and what advice they’d give to other landscapers. The consensus: Now is the time to streamline your operations and press forward with marketing. Here are some exerpts of what they told us. To read all of the questions and the unedited responses, please visit our website at www.totalandscapecare.net.

1. How has the economy affected your business recently?

Our design backlog this year is twice what it was last year. Maintenance is the same and we are emphasizing it in our marketing campaign. It’s too early to tell about installation. Customers are just now considering our landscape proposals. – Bill Lillie, owner, Sprigs and Twigs Landscapes, CT

A poor fourth quarter 2008 definitely hurt our business. We went into the off season with less cash reserve and a lower back log than the previous couple of years. That’s the bad news. In terms of good news, we are examining everything we do – from systems and processes to our mission statement. This tough time has been a blessing in disguise as we determine where we are and where we really want to be. It’s an exciting time and a perfect time to flex our reputation, experience, and future capability. -Roger Grothe, president, Aloha Landscaping, MN

The maintenance business is stable as “the grass still grows.” The only area that is slightly affected is our enhancement business as the discretionary funds are being spent more deliberately. -Brian Golembiewski, president, Paramount Landscape, AZ

We have eliminated waste in our company from old contracts, tightening cell phone bills, insurance policies, fuel consumption, overtime, and employees not pulling their weight are now gone. From a bad standpoint, there is less total revenue for us to earn, but our profit might go up. -Corbin D. Snow, president, Snowknows, VA

We’re expecting a substantial increase (20 percent plus) in retail, where we were up 19.6 percent last year. Based on current volume of leads, we expect design to be slightly up by 5 to 8 percent and based on current sales and customer contacts from last year, we expect a modest increase of 2 percent in installations. Maintenance: No increase expected. -Mark D. Halla, steward, The Mustard Seed Landscaping and Garden Center, MN

We are already seeing major “lowballing” for jobs this spring in the southeastern Idaho market. We are doing more marketing this year to ensure getting enough work and have enrolled in the “Working Smarter Training Challenge” to get all of us better trained to be more efficient. -Jerry Merrill, president, Merrill Quality Landscapes, ID

Both design and installation are reduced. It is allowing our maintenance division to be streamlined and work more efficiently. -Eric Brand, owner P and L Landscaping, NH

People are a little apprehensive to do the entire project all at once. Instead they are taking a two- or three-year plan. -Gary Anderson, president, Gary Anderson Landscaping, MN

All areas of our business have been affected which has led not only us but other landscapers to venture into more maintenance work for stability, which is also causing the maintenance side of businesses to lower their prices. -George A. Pacheco Jr., president, Pacheco Brothers Gardening, CA

The economy has affected us for the better. It has forced us to get better at what we do, continuously improve, and eliminate waste in our organization. -Todd Reinhart, CEO, Reinhart Grounds Maintenance, IL

We’ve seen a negative effect to both design and installation. Design is down 25%, and construction is down 10 to 12%. -Dave Nelson, owner, Land Expressions, WA

The downfall in the economy has affected our business for the better. We have spent more on advertising and marketing over the past six months than ever before, because we know what will happen if we neglect marketing, which is easy to do when money is tight. Our clients seem to be putting more into their homes with the intent of spending more time at home. Some other landscape companies have gone out of business, which has narrowed the competition a bit. -Shay Grant, co-owner, Grant Garden Group, GA

2. Will your equipment budget be cut this year?

Yes, but mostly because the negative news accounts have me concerned. I’m planning on 20% less revenue than last year, but I’m reacting to the negative news like everyone else. From what I can see from customers, we’re going to have a strong year. -Bill Lillie
We do not have plans to purchase any equipment this year. We will take a wait-and-see attitude and maybe make adjustments in the third quarter if things are stabilizing and our backlog is sufficient. -Roger Grothe

With a slowdown in growth, new equipment needs that are a result of growth will also slow down. However, replacement rates of equipment that is used up will be the same as last year. -Brian Golembiewski

3. Have you instituted price increases, fuel surcharges, etc. and if so, what was the response of your clients?

No. In fact, we have informed our customers that we will not be raising prices as a result of the economy as a good-faith gesture. -Brian Golembiewski

Yes, but there’s been no response [from clients] because it is built into the contract and doesn’t leap out as an increase. -Robert Bangs, owner Windswept Gardens, ME

No price increase on labor. Added a 2% surcharge to all bids but also added a 5% prepayment discount. -Mark D. Halla

We have absolutely held prices from last year and tried to add value for each customer. Raising prices would be suicide. For our maintenance accounts, we are offering “Landscapes for Life,” an extended warrantee program on their gardens as long as we do the maintenance. -Bill Lillie

We raised our prices when we felt we needed to cover those cost increases and then held the line on price increases this year instead of doing our normal yearly increase. We felt like our customers would react negatively to “nickel and diming” for fuel surcharges. -Jerry Merrill

4. What marketing methods do you find most effective and have you changed your marketing strategies in light of the current economy?

Lots and lots of phone calls. Reconnecting with old customers and project managers has been helpful. -Roger Grothe

Our quarterly newsletter has been an outstanding way to keep in contact with our clients. -Gary Anderson

We are getting more involved in community projects, and have just begun to advertise on the radio. Also, we have revamped our website, which has paid off. -Shay Grant

We use print ads in our local magazines as well as local papers; we are hosting a cocktail party for our best clients and billing it as a “bring a friend event.” We are also focusing on our referral business and rewarding those clients who refer us to others. -Kathleen Dangelo, vice-president and general counsel, The Ohio Valley Group, OH

New work used to fall on our lap. We are really trying to upsell to our existing customer base, things they thought they couldn’t afford and never asked
or didn’t think of. -Eric Brand

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Attachments Idea Book Cover