Editor's Focus: March 1999

Do me a favor and take a minute to think about the market you compete in - what do you see? How does that view compare to what you saw at this time last year?

There are probably few differences. But if I had asked contractors 12 months ago what they expected their market to look like today, many would have predicted tremendous change to have taken place.

Yes, it was one year ago this month that Lawn & Landscape broke the stories of the formation of LandCare USA and the expansion of TruGreen-ChemLawn into landscape maintenance.

Uncertainty breeds fear, and these two organizations created as much uncertainty in the industry as there has been in quite some time. Many concerns were voiced – How could the owner/operator compete against multi-million dollar corporations? Would these companies engage in price slashing tactics that would further depress already scant margins? Would smaller companies lose those one or two plum contracts they counted on for existence?

Well, one year later, what has changed? Not much.

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Yes, LandCare USA and TruGreen-ChemLawn have continued their buying binges, with the total approaching 40 companies and $400 million in acquisitions. The two groups even announced plans to join forces in a deal expected to close early in the second quarter of this year.

But cries that the industry was facing its doomsday have been unfounded thus far. The small owner/operator is still in business. Prices are showing the strongest signs of climbing in 10 years and there have been few complaints of unfair competition.

At this point, I would propose that the development of these companies is, in fact, good for the industry and all companies in it.

Yes, competition will increase for many companies. And, yes, some of these companies will lose the battle for existence. But those companies who analyze their market, have a clear business focus, understand how their costs affect their prices and create an environment that people want to work in will continue to grow and succeed.

Many companies grow today because they are in a growing industry in the midst of a booming economy. Answer the phone, do the work and there’s money left over at the end of the year. That approach will not be good enough in this new environment.

TruGreen-ChemLawn and LandCare USA represent a challenge to the industry to better itself and keep the good fortunes going. If you’re simply cutting grass by day and praying for good fortune by night, then it’s time to learn about your business or join forces with someone who does. But if you know what it takes to succeed in this industry, then fear not, the future exists for you too.

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