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BUSINESS FORECAST


technologies to communicate more efficiently and require fewer people to pick up a phone. We’re getting creative with all of that.” Another way businesses maintain profitability in spite of labor challenges is by evaluating which services yield better margins and directing resources in those areas. “From a strategic standpoint, we know the kind of compa- ny we want to build, and while there is lots of business we could go after, we have chosen to stay on the strategy of growing commercial maintenance and enhancements associated with that,” McCutcheon says. At Grassperson in Lewisville, Texas, President Jack


Moore says lawn care is the focus for growth. “We are becoming much more strategic about how many mowing customers we take on,” he says, relating that a full-service program includes mowing—but lawn care is part of that package, and the business does not take on only-mowing clients. Why? Lawn care is simply more profitable and where the company has a competitive edge. For Munn in California, irrigation is up to four times more profitable than landscape maintenance, with margins of 30 to 40 percent. Irrigation represents about one-third of English Garden Care’s business and Munn plans to grow that. “We are willing to take a hit on maintenance because we generate profits from irrigation and enhance- ments,” he says. So, improving efficiency and zeroing in on profit-bear-


ing services can help companies offset labor’s hit on margins because of higher wages to attract people willing to do field jobs. And, technology is another possible labor saver, points out Frank Mariani Jr., the third generation in Mariani Landscape, Lake Bluff, Illinois. Currently, they are testing robotic mowers. “If we can get robots to cut the grass—one of the


easier tasks we do—it will free up our crewmembers to do the important, horticultural work that we take pride in,” Mariani says.


Mariani is really pleased with the results he’s seeing from robotic mowers so far. The company invested in a few of them. McCutcheon is also looking into this option.


“Robotics have a lot of promise,” he says. A BUSY ECONOMY


While labor is a perennial stress that has become a hurdle to growth for many in the industry, there are many bright spots ahead in 2018 and 2019. “Projects are getting booked, and the economy seems to be in a good spot now,” Mariani says. Moore relates how Texas has attracted major corpo-


rations to his service area, such as Toyota of America and its thousands of employees. “The economy is extremely robust,” he says.


Ashby shares that Utah is one of the fastest growing


states. And, in the Greater Washington D.C., area, Langan says that even the government shut-down didn’t negatively impact business or sales. “We don’t anticipate much of a hiccup because it happened in the off-season and most fed- eral workers—which is a big part of the residential clientele around here—should be back-paid already,” he shares. Overall, Langan says, “It’s a pretty hot market.” The key to dealing with lack of labor in a hot market goes back to focus. Focus on profitability. Focus on systems. Focus on efficiency. Focus on technology. And, as Hitch says, a focus on training and education can separate a business in a crowded marketplace to attract the best possible people—and clients. He says: “If we are bidding against another company, certification can be the one thing that puts us over the top and gets us the job.”


PUT IT IN WRITING T


he NALP members we spoke to said they’re already paying far beyond minimum wage in their businesses. But, if mini-


mum wage increases significantly, that means that employees at all levels of an organization will expect a bigger paycheck. Price hikes (already necessary) will be critical.


WHAT ABOUT LONGER-TERM CONTRACTS? Jim McCutcheon, CEO of HighGrove Partners in Austell, Georgia, suggests building language into contracts that allows for price adjustments should minimum wage change substantially. “You want the ability to change your fee accordingly,” he explains.


24 THE LANDSCAPE PROFESSIONAL > MARCH/APRIL 2019 TIP:


RICHARD LEHR, NALP’S LEGAL COUNSEL, SUGGESTS HAVING CONTRACTS REVIEWED BY YOUR COMPANY’S GENERAL BUSINESS ATTORNEY. “SOME YEARS AGO WHEN GASOLINE COSTS WERE RISING RAPIDLY AND EXCEEDED $4/GALLON, SOME CONTRACTORS INCLUDED A PRICE ADJUSTMENT CLAUSE LIMITED TO THAT COST AND ACCORDING TO A FORMULA,” HE SAYS.


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