Lawn Care Low Down

More than 50 percent of landscape contractors said their profits in their lawn care division are greater than or the same as their profits in other services, and more than 80 percent said their chemical lawn care business increased or stayed the same in 2003 – both are facts Lawn & Landscape magazine is hearing quite often from its readers.

So, to truly understand this key service division, we decided to survey readers to find out exactly how profitable lawn care is, delve into the expenses this business offering carries, investigate which area within this division is growing the fastest, and decipher business challenges facing this service in 2004.

THE FACTS. Seventy percent of contractors offer chemical lawn care services, including fertilization, and weed, insect and disease management through pesticide applications on turf, trees and ornamentals. Another 7.1 percent subcontract the service and 9.3 percent refer clients to companies who specialize in lawn care services.

Of those contractors who offered the service, 41 percent said this offering increased in 2003 by an average of 24.2 percent, and only 6.5 percent reported a decrease in chemical lawn care business – the average drop being 21.14 percent. And most contractors surveyed – 59.6 percent – have residential lawn care clients vs. commercial customers.

Turf makes up the bulk of the work with 73.4 percent of contractors using pesticides to maintain turf, while ornamentals and trees make up only 23.3 percent of contractors’ businesses.

PRODUCT PUNCH. When it came to expenditures, 29 percent of contractors spent less than $2,000 in 2003 on pesticides, showing that it is a low-cost-to-entry business. Twenty-one percent spent between $2,000 and $5,000, 11 percent spent more than $50,000 and 10 percent spent between $10,000 and $20,000.

Forty-two percent of contractors said their 2003 expenditures were similar to 2002 levels and 38.3 percent increased their expenditures in 2003 by an average of 18.72 percent. This year, 45.9 percent of contractors plan to increase their pesticide expenditures by an average of 19.48 percent.

When purchasing products, cost, efficacy, safety and supplier location top the list of buying decision influences.

When making pesticide purchases, the majority of contractors do so all year-round on an as-needed basis (44.8 percent), while 30.4 percent prefer to buy their products April through June.

Granular products are preferred over liquid with 22.8 percent of contractors offering all-granular services and 34.1 percent using both products but more granular than liquid in their service offerings. Only 6.8 percent of contractors offer all-liquid programs.

Combination or blended products, such as fertilizers and herbicides or insecticides, was the application that grew the fastest in 2003 and is expected to grow the fastest in 2004 with the average growth at 23.9 percent in 2003 and an expected 18.22 percent in 2004.

When asked about generic vs. brand name products, almost as many contractors used generics, claiming they work just as well as brand name pesticides, as those who don’t – 43.9 percent and 48.7 percent, respectively. However, a majority of contractors (43.4 percent) said they feel that brand name product manufacturers offer better service and support for their products than generic manufacturers.

SALES & SERVICES. A majority of contractors – 56.3 percent – use some form of advertising, whether it’s in the Yellow Pages or local newspaper, to promote their chemical lawn care services.

The top three most challenging issues facing lawn care operators in 2004 are pesticide restriction/government regulations, lack of qualified technicians and the economy.

Though it ranked No. 1 as a challenge, 38.3 percent of contractors said their clients express the same amount of concern over environmental risks associated with pesticides than in the past.

The author is managing editor of Lawn & Landscape magazine and can be reached at nwisniewski@lawnandlandscape.com.