Jim Huston

The state of the economy can be described in one word – stagnant. However, the state of the green industry is anything but stagnant. The fifteen contractors with whom I’ve visited this summer are engaged, proactive and planning to grow. They are anything but placid and, in some cases, their assertiveness is paying big dividends. Here’s a general snapshot of what I’ve been seeing.

Commercial installation is flat or non-existent in many parts of the country. Where there is work, it’s not uncommon to see 20-30 bidders submit prices.

Residential installation is stronger than commercial work but it is still anemic. Jobs are much smaller and margins are down a minimum of ten percent. Contractors are accepting $1,000-$2,000 jobs when the past minimum was $5,000-$10,000.

Public works projects are few and far between. Government bailout funds do not seem to have trickled down to the green industry. I guess we need more lobbyists in Washington.

Commercial and residential maintenance has become extremely competitive. Installation contractors have realized the brilliance of having a maintenance base. They’ve jumped into this market but have driven prices down. Property managers smell blood in the water and are working contractors against one another.

Enhancement/extras work is up considerably. In lieu of larger installation projects, many maintenance clients are approving small incremental improvements. This work tends to be more profitable with higher margins than larger installation projects.

Fine gardening, garden detail or classical gardening is an area of growth in the high-end residential market. As Lexus differentiated itself from Toyota, contractors, in many cases, are rebranding themselves to take advantage of this opportunity.

Irrigation service has been a strong component of the market this year. However, the weather has been a major factor contributing to this success.

Lawn fertilization and weed control have been fairly stable sectors of the industry. However, like maintenance and other service sectors, these areas have become more competitive as clients shop around and contractors compete for market share.

Small comfort jobs seem to be popular. Big jobs are out but small ones are in. I call them comfort jobs – they’re the jobs that make the consumer feel good. Some extra flowers here, a small patio there – they are small, incremental improvements that provide a psychological boost.

Conclusion
The economy may be flat but the green industry contractors that I’ve visited are not being tepid about growing their businesses. They are vigorously working on internal efficiencies and external marketing opportunities. Many have reinvented themselves or key areas of their existing product and service mix.

I hate to say it, but the current lackluster economy has been the best thing to happen to many of my clients. They’ve had to rethink everything. And this has been a good thing!

JIM HUSTON runs J.R. Huston Consulting, a green industry consulting firm. See www.jrhuston.biz; mail jhuston@giemedia.com.