Photo courtesy of D.J.'s Landscape Management based in Grand Rapids, MI.
The more landscape contractors and equipment dealers I talk to from around the country, the more often I'm hearing that business conditions are back to where they were in the 2005-6 time frame. It's taken a while to get there, but I'm starting to believe that we're actually back.
If it's true—that we're actually back to pre-recession market strength—I'm now keeping my eyes on a couple of things.
What is supporting the growth, and is it sustainable? In 2005-6, the industry was riding a wave of unsustainable, artificial demand fueled by the housing bubble. Now, contractors and dealers are telling me that the demand for their goods and services is much more natural.
Will the low-balling stop? As business conditions improve, I'll be interested to see what happens to pricing across the industry. Both dealers and contractors, in many instances, have been forced to lower prices in order to compete. Now that demand is healthy again, will prices strengthen? Or, have consumers now been conditioned to this new level of pricing and discounting? Or, will there continue to be a handful of dealers and contractors who ruin it for everybody? This will likely take at least a few more years to work itself out.
Will bad management return? During the recession years of 2008-11, dealers and contractors really focused on becoming better, more creative and more frugal business operators. Cost suppression, market share pursuit and innovation became central to their strategic plans in order to survive. Now that phones are buzzing with incoming sales leads again, will the industry return to the fat-and-sassy days of loose management? Check back in November and we’ll see where things are.