2007 LAWN CARE REPORT: The Green in Maintaining Green

Despite increases in fuel prices, odd weather extremes, low-ball competitors and increasing demand for qualified technicians, lawn care professionals say business is solid, and for some, it’s only getting better.

A CLOSER LOOK

Click here to see the geographic breakdown of contractors across the U.S.

Overall, more than 67 percent of lawn care operators (LCOs) indicated their total chemical lawn care business increased over the last year, according to research conducted by Lawn & Landscape. That growth, on average, was about a 22 percent increase and is in line with what many LCOs are seeing in their financials.
 
“I haven’t experienced a downturn on the lawn care side of my business,” says Wayne Shiveley, president of Pine Ridge Landscaping in Chantilly, Va.  Lawn care makes up about 10 percent of Shiveley’s overall revenue and he’s seen consistent 15 to 20 percent annual growth in the chemical lawn care service segment. “We’re strictly commercial focused and the commercial market in the D.C. area is very strong,” Shiveley says.
 
Roger Meyer, president of American Beauty Landscaping in Boardman, Ohio, agrees.“We continue to grow our lawn care service at about 25 percent annually,” he says. “In fact, we’re planning to be more aggressive with advertising our lawn care service going into 2008.”
 
Despite drought conditions in the South, historical trends provide LCOs with opportunities to recoup lost lawn care revenue, says Sam Lang, president of Fairway Green in Raleigh, S.C. For example, drought traditionally cuts into fungicide revenue. “The flip side is when you have a drought you need to replace all of that dead fescue, so your reseed sales go up,” Lang says.
 
Overall, LCOs see about a 27 percent profit margin from their chemical lawn care service,  the data says. In addition, more than 60 percent report that the profit margin for chemical lawn care services was either higher or the same as the other services they offered.
 
For the lawn care industry, many negative national and regional economic trends are cyclical and don’t necessarily spell doom for an LCO, says Neil Cleveland, managing director for Bayer Environmental Science in Research Triangle Park, N.C. Many times these  adversities can be managed through careful business practices. “LCOs seem to be upbeat and confident that they’ve been able to grow their businesses,” he says. “It’s true that cost increases are concerns for LCOs and all of us in this industry, but any lawn care professional who’s been in this business for any length of time knows that these types of issues come up and they need to be managed through careful monitoring of a contractor’s costs.”
 
Cultural and generational trends also drive growth in this market segment, says Tom Kroll, product manager with Nufarm Americas, Burr Ridge, Ill. “Even though there are local impacts on dollars spent, with the exception of the impact of oil prices, an aging consumer is demanding more free time and less burden from the daily chores of lawn care,” he says.
 
Besides fuel prices, LCOs indicated they face a lack of qualified technicians and government restrictions and regulations, the data says.
 
So what does the typical LCO’s operation look like? According to the research, the average LCO is a full-service landscape contractor who included chemical lawn care as part of his overall service menu. The contractor derives nearly 30 percent of his overall profit from chemical lawn care services. His client portfolio, on average, is 57 percent residential, 30 commercial, 8 percent multi-family and 3 percent municipal. His top selling services include fertilization plus herbicide treatments (38 percent), weed control (20 percent) and fertilization plus insecticide treatments (13 percent).