Rolling with the punches

The recession has brought on a lot of change for landscape contractors and their businesses. Those that have been able to successfully shift and adapt have succeeded, while others who may have not been willing to change their business – or on the other hand, may have made changes that didn't suit their business – have not fared as well. It's important for businesses to analyze routinely the services they offer. Any service that might be anchoring the company from achieving growth is best to ditch, while certain divisions, like maintenance, may present an opportunity to grow.
 

Maintenance mania. For many, the strongest service has remained maintenance. Brandon Denson, owner of Denson Landscapes, a full-service company in Tate, Ga., says maintenance is the only area of the company that continues to grow beyond expectations. Denson reports that new construction is dead in Georgia and the business is no longer doing many design/builds or even re-vamps. "Maintenance is definitely where it's at," he says.

While many like Denson are seeing growth in their maintenance divisions, some are struggling with the fact that so many contractors have added a maintenance division to make up for lost profit in other areas. While it's working out well for the companies successfully adding a maintenance division, it has not been viewed as favorably among those who already offered the service and feel the market is becoming crowded.

Rick Christensen, landscape division manager of Portland, Ore.-based Teufel Nursery, says it's a challenge to see so many get into maintenance. "The amount of maintenance work hasn't changed and the contracts haven't changed – there's just a lot more competition in the market," he says. "We see competition providing a service that is at or below our cost, and I wonder how they can even afford to do that? It's either that they're so new to it that they don't understand cost or they're making a desperate attempt to keep revenue coming in."

Bruce T. Moore, Sr., president and CEO of Eastern Land Management, in Stamford, Conn., says he's definitely experiencing a lot more competition from companies entering into some of the services Eastern Land has always offered. But he says that the "deep roots" his company has established in these divisions has helped them with customer retention. It's also helped with some organic growth. "What we're trying to do is build the business through our loyal existing customers," he says. "We're maintaining a consistent program of developing the business through those landscape management clients."
 

All about location. Of course, like any trend, a lot of it has to do with the region. In Adams, Minn., Ethan Heimer, owner of Perfect Look Lawn Care, says he has yet to really feel the sting of the economy affecting his business and he hasn't had to make a lot of changes to the services he offers. He attributes this to customer loyalty and says that the weekly mowing remains the strongest service segment of his 65 percent residential business. He's had very strong customer retention rates.

"I've seen a lot of smaller businesses adding maintenance, but I've always only done maintenance," says Heimer. "The downturn of the economy has affected me very little due to one main factor – most of my maintenance clients are long term and I have very good relationships with them. One change I have made is adding some additional services to my business including spraying, and this winter, snow removal. Other than that I have just been trying to get new customers with promotions and publicity."

In many smaller towns, things haven't changed all that much in terms of added services. For David Gardner, co-owner of Gardner Landscaping in Eastern Kentucky, he's always been "doing it all," because he's serving a small area of communities. "We're in an area where we have to do everything and that's always how it's been – it has nothing to do with the economy," says Gardner. "We can't afford to specialize in just one area. We do maintenance, installs, hardscape – whatever the customer needs. The adage is, 'If somebody calls you with work, don't turn it down.'"

But Gardner agrees maintenance is growing. He reports doing an increasing amount of maintenance work among his 60 percent commercial clientele. "The folks we work for are businesses, such as McDonald's, and it doesn't matter what the economy is doing – the franchise has requirements that say they must maintain a nice property."

Building Again. Nationwide, some are reporting a slight upsurge in their construction and design/build divisions while others report that this area has remained stagnant. Eric K. Weishaar, president of Breckenridge Landscape Design, Construction, & Maintenance, in New Berlin, Wis., says that construction has actually been the biggest part of business for his company this year – especially in residential. "We've seen a 50 percent jump in that division," says Weishaar. "I believe this is a result of people who were waiting out the recession or unsure of their future finally deciding to pull the trigger. They are now certain of their employment and have decided to stay in the house they are in. New construction [in the housing market] remains sluggish, but we've found most new construction homeowners are 'house poor' anyway, so that was never a huge market for us."

Andrew Blanchford, president, Blanchford Landscape Contractors, in Bozeman, Mont., has found that he's been able to gain some construction projects through his maintenance division. "Our garden service division, which is a higher end maintenance service, has really grown and become a nice niche for us," says Blanchford, who adds that he saw about 50 percent growth in that service this year.

"What we've found is that some of those maintenance relationships are developing into construction projects. We'll be on the property, maintaining it, and the homeowner will start talking about a design/build project they're thinking about. So we've worked really hard to maintain our garden service relationships, knowing that they may turn into something even larger."

Though weekly mowing has been the strongest division strongest for Heimer, he's been considering adding construction and irrigation to his service offerings. He says it's always best to be looking ahead and considering opportunities for growth; that way you're prepared for the future. "You always have to adapt and try to keep ahead of what's happening by considering new services – otherwise your business could fall apart."
 

Adapting to Change. While many of the contractors that have been offering certain services long-term don't like seeing competitors jump into their arena, most businesses have found that they've had to adapt in order to survive the rocky waters. After all, considering new divisions and dropping ones that aren't producing is always a part of doing good business. Greg Smith, president of BLB Contractors in the Philadelphia area, says he's always looking for ways to diversify his business. In the summer, when things got slow because of the intense heat in his region, he started offering some blacktop services. "I served as the general contractor on those jobs and subbed them out to make some extra money," he says. "You have to be willing to do what it takes to stay afloat."

Smith says that over the years he's always been an entrepreneur which is why he simultaneously runs a janitorial business alongside his landscaping company. He says it's been a unique niche. "I can go into an office building and tell them that I can handle all their outside services like lawn care and snow removal, plus the inside janitorial services," he says. "People like the idea of a one-stop shop."

In addition to being part of the entrepreneurial spirit, Smith says that trying to get involved with other services is also a result of a tough economy. "I find that whenever the economy gets uncertain, people start considering other job opportunities," he says. "I'm always thinking about other possible services I could offer."

Since the downturn of the economy, Denson says he's added a turf/weed control division in order to try and gain some share of the local market. "We are constantly striving to be a one-stop shop for our customers and in order to be more competitive we have added this new service," he says. "But other than adding our weed control program, we haven't made a lot of other changes. We just continue to pinch pennies everywhere we can, trying to do more with less."

Moore says that with the success they've already built in the divisions they offer, they haven't had to make a lot of changes. But he says the company is starting to put more of their emphasis on water management and building that into the business. It's something that customers are starting to talk more about.

Clients are going to see value in services that can save them money. "I think we need to start looking beyond traditional services like planting, mowing, or weed control," Christensen says. "What people really want or need in this economy is ways to save money. If we can market services that allow the property owner or manager to save money, then that's a successful business model."

Christensen says that Teufel has also recently started putting more emphasis on environmental services like green roofs and living walls. "These services allow the property manager or owner to get more for their investment," he says. "I really think that's the key to our future – providing services that make or save money for the customer."

The author is a frequent contributor to Lawn & Landscape.