Bigger, but Better?

A substantial number of diverse, highly skilled landscape companies are good for the industry’s image. One downside is that, since so many contractors are now multi-service, it’s harder for a given contractor to use “we do everything landscaping-related” as his point of difference.

Old habits, tough issues die hard

As the economy softened and competition began tightening in late 2008, the average contractor’s most concerning issues changed a bit. During the bubble, the biggest challenges were finding employees and profitably managing growth. Seemingly overnight, the two biggest issues became retaining customers and profitably completing work.

It’s interesting to note, however, that many of the critical issues contractors are facing today were prevalent during previous boom periods. According to that 1988-1995 PRO study, contractors said the following were their most pressing issues:

• Finding and managing employees (89% said this was an issue)
• Insurance (72%)
• Lowballers (68%)
• Making a profit (61%)
• Regulations (46%)
• Productivity/downtime (36%)
• Adding services (33%)

Each of those seven critical issues is also on the average contractor’s list today. Each has evolved, though, posing new challenges. For instance, rising insurance premiums are one challenge, but the uncertainty over the Affordable Health Care Act is quite another. Regulations have become even more burdensome. Lowballers have taken it to an all new level, making profitability a mere fantasy for some.

How a contractor responds to these challenges in today’s slower-growing market is key. During past boom periods, “hoping them away” didn’t necessarily work, but some companies still grew in spite of this approach. Not today. Contractors must acknowledge these challenges, embrace them as the facts of life as they are, and take action. Nobody said this would be easy, but it’s becoming more and more necessary.