Full steam ahead

Pineapple Landscaping

Bethesda, Maryland

There’s no shortage of landscapers in Washington D.C. That level of competition has made life tricky for Pineapple Landscaping, a full-service landscaping company that hovers around 50 employees. Retaining those 50 workers is an exercise in patience.

“Depending on what literature you read or who you’re talking to, I have heard that this area has more landscapers than any other area in the country,” says Finn Neilsen, the co-owner. “Whether it’s landscaping companies or, as I call them ‘cowboys’ — these are guys who go down the street in a pickup truck and operate under the table — there’s more of these guys than any other area in the country.”

Employees know their worth in a market that busy, so if they want a dollar or 50 cents more per hour, they can walk to another company and get that rate. Neilsen says that certainly drives wage inflation. Neilsen believes COVID-19 heightened this competition even more because landscapers remained essential businesses and had backlogs of work that needed filled. Neilsen admits the market has settled down a bit, but not to pre-COVID levels. During the pandemic, a day wouldn’t go by without at least a few employees asking for a raise.

“(Clients) were calling us all the time, and you were just trying to get warm bodies to come in and finish this job,” Neilsen says. “You were just trying to get people in the door to fulfill what you needed to do these jobs.”

Neilsen says many of his employees also live in apartments with other folks involved in landscaping, albeit at different companies, so they’d often talk amongst each other about their pay rates. If they heard someone else was making more, they’d go in to see their boss to ask for a raise, regardless of how long they had worked at that company. Neilsen says it created an environment where companies needed to have the best wages to keep their employees from jumping ship for an extra buck.

“(The company owners) said, ‘Well, snap, I don’t want to lose my guy,’” Neilsen says.

Neilsen adds that he’s able to retain his employees because he keeps them busy in the offseason. Sometimes, January and February involves employees just moving mulch bags from one end of the shop to another. They also have snow removal going on at the height of winter, too. But still — Neilsen says it’s all about ensuring everyone is happy with their workloads at the seasonal pay rate.

“Last year, we didn’t have any snow, but we found hours for guys to keep their pockets full of money from time to time,” Neilsen says.

Now, employees are practically “beating our door down,” he says. They’ve been able to create a better filtering process to select who they hire.

“People that I have hiring and working for me, are people that I like to say I would not hesitate to have them sitting at my kitchen table,” he says.

The saturated market has also kept pricing for jobs pretty competitive, too. Neilsen says he hasn’t raised prices on mowing lawns because the volume keeps them plenty busy — they mow roughly 1,100 lawns a week. In order to compete with “the cowboys,” he says he has to do that, often trying to add on services with existing clients who aren’t paying premiums on their lawn mowing and maintenance. Keeping busy also keeps people seeing their trucks out and about around town, so it’s an excellent form of advertising.

As far as other work is concerned, they’ve had to raise some prices.

“In general, we feel the economic pressures just like everyone,” Neilsen says.

Landmark Landscapes

Sheboygan Falls, Wisconsin

Landmark Landscapes reached $7.6 million in revenue in 2023. That continues its upward trend of growth since Owner Jesse Majerus and his brother took over the company from their dad in 2015.

However, despite so much growth in years past, General Manager Ryan Price says that higher labor rates and other expenses will keep the company on its toes in 2024.

“We’re riding about six years of substantial year-over-year growth, and with that has come all sorts of growing pains,” Price says. “With wages being where they are at, we’ve had to dial in on a lot of things and that’s really our core focus for 2024 as a company. We’re not looking to push growth in the ways we have in the past. We’re taking more of an inward-looking approach and improving existing processes and trying to maximize the efficiency of everything we’re doing without having to throw money at the problem.”

The company’s controller, Lacey Busse, adds that inflation also ties into this — it’s been harder to accurately bid on projects that are further down the road with material costs still fluctuating.

“You estimate it at one cost and then six months later when the very large installation job is actually happening — the cost of materials could be a whole lot higher than what you estimated,” she says. “We’re trying to build in cushion in our budget for what we don’t know what’s going to happen.

“In addition to that, we have to be careful with capital assets and purchasing of vehicles and equipment,” Busse adds. “That’s a whole lot more expensive than it used to be.” All of this means they are constantly reviewing its pricing.

“We use Multiple Overhead Recovery System and I look at all of our costs involved,” she says. “If things are in a very inflationary market, we tend to do that overhead recovery more often. Usually, it’s in February and October…I look at what we’re expecting for material costs and then figuring in our mark up. Then I take a look at equipment and subcontractors and our mark up on those. Then, we try to figure out what our new labor cost is. With rising wages, that’s definitely a moving target.”

Something that’s been beneficial in pricing and budgeting for the year has been involving more people.

“Year-to-year, what we’ve tried to improve upon each time we do the budget is involving more people in the process,” Busse says. “It used to be one person building the budget, putting it out there and managing it. Throughout the years we’ve tried to bring more people into that process and being a part of not only building it but managing it.”

She says this is something that’s helped the company in more ways than one.

“This year, we have a person who owns every account line in the budget, and they will be responsible for managing it and monitoring that spending or earning,” she says. “It creates more buy-in. It’s not just one person, or one team, shoving information at everybody else and making them to abide by it. If people have a say in what the budget looks like, it’s a whole lot easier for them to understand the thought process and helps them be able to get on board with it a whole lot more.”

Busse adds that it helps that person communicate more knowledgeably with their crews.

“So, a supervisor now understands how much they are supposed to earn in their division and how much they have for spending. They can better communicate that with their crews and help that education trickle down to everyone in the company,” she says. Even with all hands on deck, Landmark Landscapes is bracing for anything this election year.

“There’s a lot of uncertainty out there, Majerus says. “Hopefully it won’t have too much of an impact. Nationally, I think there will be some folks who will be hesitant to spend with the amount of looming and existing uncertainty.”

Price says this will call for everyone to be “on the offense” to continue driving the company forward. “The biggest focus shift with the path ahead is with our sales team and having them ramp up to take more of an aggressive approach and making ourselves as visible as possible… this year we’re preparing to have to hunt rather than farm leads,” he says.

GreenShade

Yukon, Oklahoma

Justin Lingo, owner of GreenShade, says learning to diversify his service offerings is what led the company to go from just a small tree farm into a nearly $15 million company that employs 90-130 people throughout the year.

“GreenShade was started in 2007 as a tree farm,” he says. “I started running the business in 2009 and quickly learned that it’s hard to be just a tree farm. So, we started doing commercial landscaping… that then grew into more and more commercial work. Now we have crews all over the state of Oklahoma, and we do irrigation, hardscape, sod, concrete, maintenance and more. We have a pretty diverse skillset.”

Lingo says this focus on more commercial work keeps him from being too concerned about the tumultuous times of an election year as that side of the business tends to be impacted slower.

“Election years are always unique years,” Lingo notes. “They can definitely disrupt and cause a little chaos in our market… I think there is a little uneasiness about the future — but I don’t think it’s a major factor. For us, we do a lot of commercial work so a lot of it has to do with interest rates. If someone thinks interest rates aren’t stable, then we see a little work start to slow down.”

Instead, Lingo says the biggest concerns he has for the year are ongoing struggles tied to labor and material costs increasing.

“Our average labor rate has gone up and that’s just a product of inflation. Guys need to make more because things cost more. We’ve had to put off some investment in future things because we needed to make sure our employees were being taken care of,” he says. “There’s definitely been some cutbacks and tough decisions made.”

Fuel and equipment prices have also been hard pills to swallow and something Lingo says they need to continue to monitor closely while bidding work for this year and beyond.

“It’s pretty incredible how much equipment costs have gone up over the past few years,” he says. “We’re a lot more conscious with bidding now — especially jobs that are quite a ways out. If a job is way out, there’s definitely an inflation factor built into it. But if it’s a job that’s going to start in two weeks, inflation isn’t going to affect us on that.”

Lingo says they’ve tried other tricks too — like pre-buying materials and supplies in bulk and storing it for later projects.

“We look at future overhead, too,” he says. “ For example, do we need to pre-buy material and store it to be able to control input costs?”

All these unknowns play into pricing, which Lingo says sometimes changes on a case-by-case basis.

“There are several facets to price increases,” he says. “We look at tree price trends on the tree side and we review other nurseries, market conditions and set our prices accordingly on that. With maintenance, we look at our input costs. If fuel was high and costs were a lot higher, we’d increase our costs. We’re taking in labor and the cost of labor now. Those things are all factored in on the maintenance side… Every job is unique, so if it’s a job that’s pretty difficult we will price it accordingly. And if it’s a job that’s way out, like in 2025, we have to be pretty cautious.”

Yet all this doesn’t stop Lingo from remaining optimistic about what’s in store for 2024 and beyond.

“We’re very excited about where our future is heading,” he says. “We are working through the challenges of labor costs, equipment costs and material costs — but we see a bright horizon ahead.”

Zoomscapes

Louisville, Kentucky

Jason Hughes, owner of Zoomscapes, is working with a small crew. He and four other employees raked in just over $260,000 in revenue in 2023.

And that was after raising prices significantly for the first time.

“We’re a small lawn care and landscaping business,” he says. “The majority of our revenue comes from maintenance clients. In the past, I really hardly ever raised prices on my reoccurring clients. Mainly, because it’s such a competitive market. There’s always somebody who is willing to do it for less.”

Hughes notes they raised prices across the board by 7.5% in 2023. This upcoming season, the company is looking to raise prices yet again.

“I haven’t raised them yet this year, but we’re planning to — I just have to figure out what percent will work,” he adds. “We were looking to do another 7.5%, but it’s probably going to be only 3% or 4%, which is probably not enough.”

Though Hughes prefers a blanket increase, he does admit there are special circumstances where a job might receive more or less than the standard increase.

“You have unique situations where there needs to be a bigger price adjustment,” he adds.“I’m trying to get the ones I know aren’t priced right up a little bit more without giving them sticker shock.”

For the most part, Hughes says he didn’t receive any real pushback after raising prices.

“Everyone was really understanding,” he says of the increases. “When you’re doing mowing, 7.5% of $50 isn’t much. Annually it might add up some, but we didn’t have any problems. With everything going on, people were receptive to it.”

However, Hughes admits things might change after the election later this year. He says he has some concerns about the aftermath of it.

“I couldn’t begin to unwind how it’ll affect us,” he says of the upcoming election. “If we’re looking at the overall economy, depending on who wins, I could see fallout either way.”

Hughes says he has two major concerns post-Election Day. One being how it will impact his clients who pay him because they aren’t physically able to tend to their own yard and are on a fixed income.

“I feel like what I’ll run into is that some of my clients who are senior citizens who are more on a budget — that’s who it’s going to be tough for,” he says. “I think that’s where I can see it hurting.”

Next, it would be an increase in lowball competition — something Hughes says he already has to combat quite frequently.

“If we get into a recession, those laid off from the factories are going to want to start mowing Mrs. Jone’s grass,” he says. “That’s where I see some risk too. Lower-tier competitors might come in and undercut us. We already deal with that to some degree now.

“Those guys are hard to compete with,” Hughes adds. “They might be good with making $25 an hour and that might be good money to them, but I’m trying to get $75 per manhour on anything we do.”

Regardless of what lies ahead, Hughes says he has some big goals for 2024.

“This year my goal would be to have a third crew, so we’ll see what happens with that,” he says.

This means hiring is on the horizon for Hughes, who says finding quality labor has always been a challenge.

“The people I have are great. I have a really good team. We lack some experience but everybody’s good,” he says. “To find one great one, I feel like we’re going to go through three or four or five others. I’m hoping the labor market gets better in terms of hiring people. The last few years have been horrible.”

In addition to adding crew members, Hughes says he’s also adding overhead like new trucks, mowers and other equipment to be able to take on more work.

Yards by Jody

Moapa Valley, Nevada

Jody Madewell doesn’t want to raise costs on his longest-tenured clients, but this offseason might be the time he does.

The company first incorporated in 2011, but Madewell’s been landscaping for over three decades in the Moapa Valley area in Nevada, which is located just an hour outside of Las Vegas. He’s a proud native of the area and has banked lots of loyalty from clients who he’s had for 20 or 30 years. At that time, he started mowing their lawns for $15. For a select few, that’s still the rate he charges.

“I have increased over the last couple years, especially new clients,” Madewell says. “We probably are going to have to increase in the next year. I’ll have to break the news to them.”

Breaking that news means including the context — that he’s not just doing it to pinch another penny. Costs have gone up on insurance, trucks and other various materials. But Madewell also recognizes that several of his customers are senior citizens on fixed incomes. There’s a few who genuinely wouldn’t be able to afford that lawn care on their Social Security stipends.

Madewell has cut his staff down to just himself and another employee. His decision to start with a clean slate came about seven years ago, when he had employees who weren’t producing quality work. Yards by Jody started losing clients and receiving customer complaints, so he made the choice to clear house and start anew. And for a while, it was just Madewell out in the field, but he needed more help again so he hired another guy.

Today, there’s enough work that would warrant another employee. Madewell says they’re about maxed out, working six days a week as it is. Without another new hire, they won’t be able to take on new work. But it’s been tricky.

“We keep looking for some more people to work but nobody wants to work,” he says. “I tried to hire a high school kid just to wash and vacuum out the trucks for us, and he’s never showed. It’s really hard to find helpers who want to work.”

Madewell says one possible hire asked for $40 an hour, which made him laugh. “I was like, ‘Dude, I don’t even make $40 an hour,’” he says. But Madewell says his situation is further complicated by the fact that summers in Nevada are killers. People would rather make $15 an hour working in the air conditioning at Walmart or McDonald’s than outside in the field. With a small community of roughly 10,000 people, the labor pool is pretty parched.

“Nobody wants to be outside working in that,” he says.

The authors are associate editors with Lawn & Landscape magazine.