L&L brings you a 30,000-foot perspective on the major trends impacting the landscape industry.

1. REPORT
2012
STATEof the
Sponsored By
INDUSTRY

2. STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE S3
J
ohn Deere is celebrating a milestone not reached by many companies – our
175th year in business!
Our business, like yours, began with an idea. John Deere was certain that
he could build a better plow, and he did. I am sure that you were certain that you
could create a successful business, and you did.
Things have changed a lot since John Deere built a better plow, and no doubt,
things have changed a lot since you first started your business.
While our business has changed over the past 175 years, we haven’t lost the
innovative spirit of our founder. It’s been a part of our culture and products from
that very first plow to the exciting new line-up of commercial mowing products and
solutions that you’ll see in 2013.
In addition, integrity and commitment – two of our founder’s value – are still
part of our guiding core values today. Throughout our 175 years, we’ve worked to
make our products safer for you, our customer, we’ve done business ethically, and
we have often noted that the results we achieve are less important than how we
go about achieving them.
These values, along with countless hours of hard work from dedicated
employees have taken us from a small, Midwestern U.S. plow company to a global
business committed to the success of our customers.
Reaching our 175th anniversary is a remarkable achievement, one that
generations of proud John Deere employees and customers have made possible.
Because of you, the green industry continues to survive and thrive even in
uncertain times.
As we look towards the future, we are optimistic about our business, and given
the growth that you predict in the 2012 Lawn & Landscape State of the Industry
Survey, you are optimistic about yours.
At John Deere, we realize that our success is dependent upon your success.
Just as you are committed to your business, we are committed to you, and the
hard work you do every day to enhance the environment.
Together, we can strive to achieve the next big milestone in our business, and
in yours.
Ken Taylor, CLP
General Sales Manager – Commercial Business Development
GROWING
TOGETHER

3. REPORT
STATEof the
INDUSTRY
2012
S4 STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE
I
t can be difficult to take the pulse of an
industry with hundreds of thousands of
owners, employees and suppliers spread
across not only a vast geography but also
dozens of service segments.
But to sum up the state of the landscape
industry in 2012, we have to say it’s getting
better. Generally, sales and profits are up,
companies are hiring and consumers are
spending again. While the economy isn’t
thriving the way it was a few years ago, top
contractors have found ways to gain market
share and continue to grow regionally.
This year, with help from independent
research firm ABR Research, we surveyed
more than 600 landscape contractors
from across the country and from diverse
service segments. We combined those data
with interviews with dozens of other key
contractors to put together this year’s State
of the Industry Report.
Inside, we’ve combined our research
and reporting to highlight the key issues
and challenges facing core services in the
green industry.
Contractors across the country continue
to report similar challenges, regardless
of market, service breakdown or size:
downward pricing pressure, trouble finding
good employees and difficulty in growing
their market share. The bottom line is that
most regions of the country are still take-
away markets for landscapers.
A majority of the industry – 66 percent
– still inks less than $500,000 in annual
revenue and nearly half post net profit
margins of less than 10 percent. But, more
companies predict higher margins and
higher gross sales for 2013.
One of the main challenges this year
was the weather. Starting with the winter
of 2011, which pinched the cash flow of
anyone who relied on pushing snow, and
ending with one of the worst summers
on record, the weather in 2012 was not
kind to contractors. But such a damaging
drought has opened up opportunities
for contractors offering resodding, turf
renovation and planting services.
2012:It’sgettingbetter
A look back at a year of
weird weather, sporadic
growth and tight prices,
and what they mean for
contractors next year.
BY CHUCK BOWEN
Combine a year’s worth of bad weather
with a presidential election that focuses
mostly on a still-foundering economy, and
you get a lot of worried small business
owners. Among the top concerns in the
minds of landscapers this year are fuel
prices, the rising cost of health insurance
and consumer confidence.
On the positive side, two factors are
coming together to indicate the potential
for more mergers and acquisitions in the
coming years. The average age of owners
continues to increase, as does the interest
of private equity firms in the green industry.
That means more investment capital and
more owners thinking about how they’re
going to exit their businesses.
But with all the challenges, tough
weather and uncertainty in political climate,
contractors remain optimistic. Eighty-nine
percent of our survey respondents say they
are confident that the landscape industry
will grow next year.
And while an optimistic industry is good,
it also helps to have some money in the
bank. And our research shows that these
good feelings are based on real growth:
Average revenue per company is up by
almost $100,000 compared to last year. In
2012, the average landscape contractor will
net $896,446 – about $95,000 more than
they reported in 2011. Overall, net profit
was 11 percent, and contractors report it
will remain about the same next year, rising
to a predicted 12 percent in 2013.
So read on to find out in detail what’s
happening in your industry, and what you
can expect next year. Good luck. SOI

4. STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE S5
How many years have
you been in business?
Company breakdown
Based on our research, here’s how the industry looks.
13%
18%
36%
33%
Less than five
5-9
10-19
20 or more
How old are you?
18-25
26-35
36-45
3%
14%
28%
22%
33%
46-55
55 or older
What percentage of your
annual sales comes from the
following services:
44% 19% 12% 7% 5% 6% 6%
Lawn mowing/maintenance
Construction/design/build
Lawn care
Irrigation
Tree and ornamental care
Snow and ice removal
Other
What percentage of your sales comes
from the following property types?
Single-family
residential
63%
Multi-family
structures
7%
Commercial/
industrial
25%
Government/
institutional
4%
Other
1%

5. S6
REPORT
STATEof the
INDUSTRY
2012
STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE S7
A
s companies start looking ahead
to 2013, they’re already gearing up
for their new equipment purchases.
Each company approaches
equipment purchasing a little differently but
most have similar expectations: They prefer
buying their equipment as opposed to
leasing it, are more conscious of spending
since the recession and are looking for a
strong relationship with their dealer. These
core components come into play across
the country when contractors create an
equipment purchase plan.
Most owners say they primarily buy
their equipment as opposed to leasing or
renting it, unless there is something special
needed for a specific job. “For instance, if
the irrigators were going out and installing
irrigation on a huge property and we
needed a Ditch Witch trencher, that’d be
something we would rent to get the job
done rather than purchase a $20,000
unit,” says Scott Tintera, shop foreman for
Clean Scapes in Austin and San Antonio,
Texas. “But if we do rent something
continually, and feel it would be an asset to
own one, we will go ahead and purchase it.”
“Whether we rent or buy depends how
often we use it,” adds Luke McClure,
co-owner, LKM Mowing & Landscaping in
Normal, Ill. “If it’s something we end up
Today’s landscape companies are still holding onto equipment and expect it to last.
renting more than six times a year, or if it
becomes a big hassle to rent it because we
could use it more, than we will try to put
something in the budget to purchase it for
the following year.”
Patrick Donovan, owner of Classic
Landscaping in Edison, N.J., says he looks
at renting versus buying not only from a
cost perspective, but also from an efficiency
perspective. If it’s something he would use
once in a blue moon, he’ll just rent it. But
he says there’s a lot of hassle involved in
renting.
“I might need a piece of equipment for
just three hours but it will take six hours
because I have to go to the place to get it,
sign papers, then return it at a certain time
and possibly jump through more hoops,”
Donovan says. “I may have just been better
off buying the equipment because it would
save me time. It has to be something I use
very infrequently to rent it.”
Donovan has also found that his
equipment list has been a great sales
feature. “I love to show my potential clients
my equipment list because it shows them
that I invest money in my business,” he
says. “I don’t have to go get an unreliable
piece of equipment to rent because I have
everything I already need for the job.”
BUYING PLANS. Since the recession,
companies are a little more wary about
spending and maybe even holding on
to equipment longer than before. Brent
Gurney, equipment manager of Pleasant
Grove, Utah-based Elite Grounds, says
that the company has not only held off on
equipment purchases but also reduced the
amount of crews while having to increase
workload to still meet their demands. “With
the way the economy has been here, we’ve
held on to our mid-sized and larger mowers
as long as possible so next year we’ll be
looking to mostly just purchase trimmers,
edgers, blowers and some smaller push
A HIGH BAR
BY LINDSEY GETZ
Longer than usual
Replace as often
Replace more frequently
How long do you hold onto
equipment today compared
to two years ago?
2%
66%
32%
mowers for growth,” Gurney says. Donovan
says that he’s always tried to get as much
use out of his equipment as possible and
feels that his business model allows for
that. “I’m an owner/operator so I get much
more longevity out of my equipment,”
Donovan says. “I still have a 1989 truck
that’s operating just fine because I’m
the only one that drives it. I’m a family
operation. It’s myself and my three sons so
we all have a vested interested in taking
care of the machines.”
Donovan says that each employee has
his own machine, and is on that same
machine every day. “You end up having a
relationship with the machine,” he says. “If
you hear a click or a buzz, it’s your machine
and you know if something isn’t right.
Because we take such good care of the
equipment we don’t have to rotate it very
often. The average business may rotate
pieces every three years but for us, it’s at
least every seven.”
Tintera says that Clean Scapes will run
equipment until it’s no longer cost-effective
to do so. “If the parts to repair an older
weed eater are going to be $225 and
we could buy a new one for $300, we’re
obviously going to buy a new one at that
point,” Tintera says. “But we’ll then use all
of the reusable parts that we can on the old
equipment. We’ll keep those to repair other
pieces that go down.”
Sometimes planning for equipment
purchases can be a challenge. As a newer
company (founded in 2007), FieldStone
Landscape Services in Clearwater, Fla., has
seen fairly rapid growth and that’s meant
growing their equipment base rapidly as
well. Michael Thackery, co-owner, says
that he often feels like they’re scrambling
when it comes time to purchase. That’s why
they’ve started playing closer attention to
projected growth now that the company has
several years under its belt.
“Our plan is to budget in the fall and
then come January we’ll start calling the
local dealers for prices,” Thackery says.
“Our goal is always a one-time buy but it
never happens that way. But we definitely
focus on buying into our growth so that we
don’t have to scramble come busy season.”
THE DEALER RELATIONSHIP. When it
comes to working with a dealer, most
companies are looking for loyalty these
days. Donovan says that even if he had to
pay a little more, he’d still go to the same
person every time he buys. But because
of his loyalty, he feels he gets the most
competitive price. “He doesn’t want me to
shop around so I feel he gives me the best
price the first time,” Donovan says. “But
what it comes down to is service and that
means having a relationship with my dealer.
If I break down on a Sunday, I can text him
on his personal phone and he’ll open up
shop and loan me a machine if he has to.
You can’t put a dollar value on that.”
“I feel like it does make a difference
in the relationship when you work with
someone consistently,” adds McClure.
“Even just for efficiency’s sake – they know
you and what to expect and you don’t have
to create a new plan with a new dealer all
the time.”
Thackery says finding a dealer that
you can have a strong relationship with
might mean going an extra mile – literally.
“We do have a mower shop that’s right
down the street from us, but for our most
recent purchase we actually went over the
bridge to a different dealer because we
felt we got better service and built a better
relationship,” he says.
In Utah, Green Line Equipment has set
the bar high for Elite Grounds, Gurney says.
“They have changed what we now expect
from a dealer,” he adds. “If a machine
goes down and is still under warranty, they
bring us an identical mower, take the other
mower back to their shop and repair it.
Then they swap it out. It ensures we have
no down time and we’ve now come to
expect that higher level of service.”
Tintera says Clean Scapes has partnered
with a parts and equipment dealer to get
on a fleet pricing program. He says that
the fleet discount on their equipment has
been a nice incentive, and he’s also built a
great working relationship with the dealer.
“They’re really great at ordering parts and
they can get things overnighted so we
get it quickly and keep our downtime at a
minimum.”
In the end, no matter what the buying
plan is, everyone is looking to operate as
efficiently and cost-effectively as possible
these days. Tintera says that the best
way to do that is to take good care of the
equipment. His crews are set up on a
weekly maintenance schedule to ensure
that equipment is regularly serviced and
also kept clean and presentable. “As
long as you keep equipment on a strict
maintenance interval, the machines can go
a long way,” Tintera says. “Keep them on
that strict interval and you’ll get the longest
life possible out of your machines.” SOI
How did your equipment
budget change in 2012
compared to last year?
19% 39% 25% 7% 10% 12% 57% 20% 7% 4%
Significantly increased Increased slightly Did not change
Decreased slightly Significantly decreased
How will your equipment
budget change in 2013?
“You end up having a
relationship with the
machine. You know if
something isn’t right.”
– PATRICK DONOVAN,
CLASSIC LANDSCAPING

6. STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPES8 STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE S9
REPORT
STATEof the
INDUSTRY
2012
A building year
The design/build sector is growing thanks to some consumers’ increased confidence,
but economic and weather barriers hampered serious growth at most firms.
by Kristen Hampshire
C
lients are loosening their wallets a bit
and more willing this year to spend on
design/build projects, placing a priority on
enhancing their outdoor spaces. There are
fewer for-sale signs propped in yards, and families
are reconsidering those big vacations. So some have
coin in the bank for that patio space.
“We are seeing more restoration design/build
work where clients have decided it doesn’t make
sense to move – they’ll lose too much and take a
financial hit on their home if they sell it – so they
decide to stay and remodel or redo the landscape,”
says Tracy Bertog, president of Bertog Landscaping,
Wheeling, Ill.
But those remodeling decisions haven’t included
entry-level, small potatoes projects for Bertog
Landscaping. Those $2,000-$4,000 jobs have kind
of disappeared. “The people who used to spend a
couple thousand are too afraid to spend that now
or are spending it on other things that are more
important to them,” he says. “Clients in that range
aren’t spending money.”
On the other hand, the larger-cap jobs are
beginning to sell for Bertog. And clients are even
willing to pay over budget a bit if they see the value.
Bertog has come in $5,000-$10,000 over budget on
some estimates.
“And if they love it, they find the extra,” he
says. This generally happens on projects that are
$40,000-$100,000-plus.
“We are up about 14 percent this year to date,
but we are not close to where we were three or four
years ago,” Bertog says of the company’s overall
performance in 2012. “We do see that customers
are starting to spend again.”
Kurt Bland, president of Bland Landscaping,
Apex, N.C., says his business has a backlog several
months deep, though this isn’t a reflection of the
market. “This will be our best year in 36 years of
business, and it’s not because of the economy,” he
says. “It’s the things we’ve been doing to actively
manage our destiny – focusing on growing and
selling and producing quality work.”
It has been the best year for Bland, and the most
difficult in his career. “Our employees have worked
harder than I can remember, and I’ve had to solve
more problems and deal with more challenges
this year, but it’s paying off,” he says. All told, the
company will grow about 30 percent in 2012. A
large part of that is because of maintenance, as
landscape installation (including design/build)
makes up 20 percent of the company’s total
revenues. But this number is up. At the lowest point
of the recession, the installation division was down
to 15 percent of the company’s total revenues. The
ratio now is just where Bland wants it to be.
“Consumers who have the money to spend are
like customers in any other business sector – they
are being more discerning and looking at who they
are spending their money with,” Bland says of the
design/build sector in 2012.
“As a company with 36 years of history under
our belt, we have a substantial workforce and
resources, so we are fortunate to have that on our
side. The people we want to work with and who are
negotiating work with us respect that.”
A STOP-AND-GO YEAR. Maintenance crews weren’t
the only ones laid up during this summer’s drought
conditions. Landscape installation teams also felt
the burn.
At Bertog Landscaping, some clients benched
projects at the last minute. “They said, ‘I’m afraid
to move forward with these plants going into the
ground – even if we water them, it will be too
difficult,’” Bertog says.
That hurt Bertog for a couple of months.
“Fortunately, we had some rain and things greened
up so the phones started ringing again,” he says.
“A couple of those projects we put on hold we are
moving forward with now.”
Weather was a factor at Snow Creek Landscaping
in Arden, N.C., but it didn’t really affect the
performance of design/build. Tim Boone, president,
says the company is down about 12 percent this
year, mostly because of the lack of snow business.
“But the size jobs that we are doing are steadily
decreasing in size,” he says, adding that average
What services does your design/build firm offer?
Design only8% Install only24% Waterscapes/
fountain24% Retaining walls46% Tree
transplanting27%Design/build58%

7. STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPES10
REPORT
STATEof the
INDUSTRY
2012
sales are dipping steadily,
too. “So, we have to do more
volume.”
Boone says the average
project size at his company
is $7,000 – his new “sweet
spot” is much smaller than
it once was. And, there’s no
large, new construction in his
area like Bland is seeing in the
Research Triangle, where some
contractors are back on the
new-build bandwagon (but not
Bland).
Boone says that with fewer
high-end residential clients
spending, the company is
tapping its existing client
base for projects. So some
of those former “big project”
clients are adding on to their
outdoor environments, but
incrementally.
“We are doing more
landscape lighting than in years
past,” Boone says. “And more
hardscapes including patios
and little fire pits.”
Meanwhile, his company
has provided bids to customers
who don’t plan to spend for a
year or more. “We are seeing
people shop for price and get
estimates, then just sitting
back and looking to budget the
money in the future,” Boone
says.
Meanwhile, Bland says
clients who have been sitting
on the sidelines with projects in
mind are coming forward with
budgets to get them started.
“Those who have done well and
spent the past few years being
frugal are not feeling confident
enough to start taking on
some of the projects they have
deferred,” he says. “We started
noticing that about 12 months
ago.”
IN SPITE OF BUREACRACY.
Running a business has
become more stressful than
ever, and with potential tax
increases on the horizon, the
uncertainty of health care and
a hotly contested election in
November, no one feels settled.
“My biggest competitor is
the government,” Bland says.
“If they would get out of the
“My biggest competitor is the
government. If they would get out
of the way and let us do business….”
— KURT BLAND, PRESIDENT,
BLAND LANDSCAPING, APEX, N.C.,
way and let us do business….”
The majority of his uncertainty
is focused on tax policy. So this
year, the company will make
investments in equipment and
trucks to take advantage of
accelerated depreciation. Who
knows what 2013 will bring in
terms of tax law?
“Because we are having
such a good year, we need to
invest in our infrastructure,”
Bland says.
Meanwhile, as the Bland
brothers work through the
final stages of buying out their
father’s remaining shares of the
business, their succession plan
has a greater sense of urgency.
“What happens if capital gains
taxes change?” Bland asks,
noting they are at historical
lows. “That is a major catalyst
for us to finish the transaction
this year.”
At the same time, Bland
Landscaping adopted E-Verify,
an Internet-based system that
allows employers to determine
potential employees eligibility to
work in the United States. North
Carolina passed legislation
in June 2012 requiring all
employers with more than
24 workers to implement the
system.
“It has dramatically changed
the nature of our workforce,”
Bland says, adding that labor is
the company’s No. 1 challenge
and hindrance to growth. “The
impact this law will have on
the industry in our state is, in
my opinion, the single largest
challenge we face.”
The economy continues to
test businesses, and only the
fittest survive. Bertog points out
that many of the weaker firms
that came out of the recession
battered and worn down are up
for sale.
He’s taking advantage of
this opportunity. “We have
done a couple of acquisitions in
the past two years and we are
looking at a couple more now,”
he says.
While some spending has
loosened up, and business
owners face the unknown
going into 2013, a focus on
growth continues. Snow Creek
Landscaping will ramp up its
marketing efforts and continue
to run lean, Boone says.
And all of the contractors we
talked to emphasized nurturing
customer relationships as a key
to success. “When the economy
starts picking up, we’ll have a
tremendous platform to grow,”
Boone says.
His company has ramped up
volume because jobs have been
smaller, and he considers the
bright side to this. “We’ll have
more referrals to pull from.” SOI

8. STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE S13
Average annual revenue per company in the industry is up almost $100,000 this year compared to 2011.
Here’s how companies across the country are doing, and where they expect they’ll end up in 2013.
Sales stat shot
In what range will your company’s
gross sales be for 2012?
18% 13% 15% 20% 15% 17%
Less than $50,000
$50,000 to $99,999
$100,000 to $199,999
$200,000 to $499,999
$500,000 to $999,999
$1 million or more
Average annual revenue in 2012: $804,208
What will your net profit be in 2012?
16% 13% 18% 25% 14% 14%
Less than 4%
4-5%
6-9%
10-15%
16-20%
More than 20%
Industry average net profit: 11%
In what range will your company’s
gross sales be for 2013?
12% 14% 17% 22% 15% 20%
Less than $50,000
$50,000 to $99,999
$100,000 to $199,999
$200,000 to $499,999
$500,000 to $999,999
$1 million or more
Average annual revenue in 2013: $896,446
What will your net profit be in 2013?
7% 17% 16% 28% 16% 16%
Less than 4%
4-5%
6-9%
10-15%
16-20%
More than 20%
2013 industry estimated average net profit: 12%

9. STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE S15
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STATEof the
INDUSTRY
2012
S14 STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE
M
ike Stewart has about 40 tons
of salt sitting in the warehouse
at Stewcare in Columbus. The
company’s consumption was one-third of the
usual, thanks to a spring-like winter and just a
handful of snow events.
With snow compromising 25 percent of the
firm’s total revenues, and generally providing
a financial launchpad to cover the summer
startup costs, Stewcare was feeling the burn
long before his region experienced a double
drought.
Already beat down by a horrible winter
(“Horrible meaning we didn’t do any work,”
Stewart says), a 45-day period of no mowing
in June and July spoiled hope for a rebound.
“There is no complete recovery from having
a drought two months out of the year,” says
Stewart, who had to lay off some seasonal
employees as customers were going three to
five weeks in between mowings. “We had two
droughts, one in winter and one in summer,
and that’s a tough season for anyone to
handle.”
Maintenance companies across the country
report that disappointing weather and sluggish
customer spending put a damper on what
could have been a better year after roughing
the downturn. Most are saying that we’re not
out of the doldrums yet – and in an election
year, there’s a wait-and-see feeling that seems
to be stopping any big moves in terms of
discretionary spending.
Serpico Landscaping in Hayward, Calif.,
planned for a better year in 2012. “We
thought things would improve faster than
they have … and the year has been quite
a disappointment,” says Sharon Hanson,
president. Overall the business grew, but
they didn’t hit projected numbers. The firm’s
homeowners association clientele cringed at
the slightest price increase. “We just really
A mild winter followed by harsh drought conditions gave
maintenance companies a run for their money. by Kristen Hampshire
“There is no
complete
recovery
from having a
drought two
months out of
the year.”
– MIKE STEWART,
STEWCARE
“We’re looking for ways to
diversify so we aren’t so
affected by the weather.”
– ADAM LINNEMAN, LINNEMANN
LAWN CARE & LANDSCAPING
Weathering 2012
expected things to be better, and the fact
that it’s an election year has people in a
tizzy,” Hanson says. “They don’t know what
is going to happen and they are not really
willing to move forward with things.”
BURNED BY DROUGHT. The “double
drought” that Stewart described afflicted
many maintenance businesses that rely on
snow business as profitable revenue bringer
in non-mowing months. Adam Linnemann,
president of Linnemann Lawn Care &
Landscaping, Columbia, Ill., says sales
were down the entire fiscal year because of
the lack of snow in 2012. The company’s
overall sales decreased by 15-20 percent.
But the mild winter did give Linnemann
a jump on spring services. “We didn’t get
the freezing weather, so we were able to get
out there and cut grass,” he says. “That did
help a little bit.”
But then the drought came, and in his
area it was the worst since the early 1930s.
“Most of our maintenance in terms of lawn
care halted for up to six weeks,” Linnemann
says.
So he kept crews busy in the shop,
focused on training and improving systems
to become more efficient and profitable.
Employee hours were cut back, but
everyone stayed on board. Of course, that
drove up labor costs and resulted in a net
profit that was about 10 percent lower than
normal. “The busywork increased payroll
but not profitability out in the field,” he says.
This year was the first in 14 where
Linnemann did not grow his business.
“That’s disappointing, but it was weather-
controlled, and there’s not much we can do
about that,” he says.
Weather also meant early mowing for
Sebert Landscaping in Bartlett, Ill. “We
were out the first week of April and we
couldn’t even start our spring cleanups,” he
says, adding that crews came back later to
make up that work.
SHAKY CONSUMER CONFIDENCE.
Customers are still minding their budgets,
and Sebert says he sees pricing in the
maintenance industry continue to erode.
“Competition is fierce,” he says. “Quality
of work has also eroded from what I have
seen, and I’m talking about being on the
street and seeing the type of services other
companies are providing.”
Mainly, Sebert is referring to contractors
who jumped into the business several years
ago, figuring it an easy entry in a depressed
job market. “It makes it tough when you’re
Mowing
Sodding
Hydroseeding
Edging/trimming
trying to sell new business and your
competing against a lower price, and while
the concern of the client may be quality and
price, it always seems like the pricing is the
overwhelming decision-maker.”
Hanson experienced the same attitudes
in California. And this surprised her
somewhat. “In general, people still want the
absolute lowest price they can get – they’ve
got an attitude of, ‘We are suffering so you
guys have to suffer, too,’” she says.
Still, Hanson noticed that some
customers who left her service for lower-
priced providers are now coming back.
“I think they got a taste of what it means
when you get what you pay for,” she says.
Meanwhile, the cost of doing business
continues to increase: gasoline, insurance,
taxes. Hanson succeeded in raising prices
ever so slightly. The scant increase barely
covers costs, she says.
Sebert is worried that the cost of doing
business will become a burden that is
unmanageable in the next year given the
political climate. He figures regardless of
the presidential winner, we’ll experience
another downturn.
But Brad Johnson, president of Lawn
America in Tulsa, Okla., is optimistic.
“Overall it was a good year,” he says of
2012, noting that the company will have
beat its budget by 4 to 6 percent by the
time the fiscal year closes.
He attributes the increase, in spite of
drought, to an early spring that ignited
sales. The company as three weeks ahead
of schedule and busy in January, February
and March, he says.
“I think the economy seemed to be
turning earlier on, but hit a bump in the
summer,” Johnson observes, adding that
the spending he saw in the first months
of 2012 didn’t continue past April. First
quarter sales were stronger than ever. But
the spending spree stopped. “We didn’t
add a lot of new customers in summer,
and we just didn’t do as we should have in
summertime,” he says.
A slower summer didn’t put a damper
on the entire year’s performance at Lawn
America. And Johnson says this is due
in part to rigorous communication with
customers. He blogs twice weekly and
sends out a monthly e-newsletter. “The
bulk of our writing was on how to water
properly and deal with the drought,” he
says. Customer education has been critical
to keeping contracts intact.
Meanwhile, at Serpico Landscaping, an
emphasis on business development will
continue through 2013.
“We see that as a critical part of our
business in the new economy,” Hanson
says of driving new sales.
Sebert agrees. “We had a bit of growth
this year, and we really focused on our
sales and procedures, in general,” he says.
The company fine-tuned its sales
presentation and uses iPads to show
customers what quality is all about. “And
we’re not just showing pretty pictures, we
explain who we are and what separates us
from our competition,” he adds.
It’s difficult to say what next year holds,
but expanding services is one way to deal
with this downer year and continue to
protect a business.
Johnson says the fall looks optimistic
with lots of calls for fescue seeding,
aeration and lawn renovation. Linnemann
acquired a service from a local florist and
is now offering “porch primers” that include
large, decorated flower pots changed out
each season.
“We’re looking for ways to diversify so
we aren’t so affected by the weather,”
Linnemann says. SOI
78% 63% 17% 76%
Which of the following does
your company offer?
“We thought things
would improve faster
than they have … and
the year has been quite
a disappointment.”
– SHARON HANSON,
SERPICO LANDSCAPING

10. REPORT
STATEof the
INDUSTRY
2012
S17STATE OF THE INDUSTRY OCTOBER 2012 LAWN&LANDSCAPES16 STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE
W
hile most irrigation contractors
report an upturn in business,
they do admit the economy is
still having an impact. Consumers have a
tighter rein on their purse strings and most
companies have accepted that business
may never boom the way it once did. But
as contractors begin to adjust to the new
normal, they still remain hopeful that
business will continue to improve as they
move forward.
RECESSION REMNANTS. Across the board,
L&L is hearing from irrigation contractors
that things are improving, but those that
survived the economic downturn are
wary of getting overzealous just yet. Any
optimism has been approached relatively
cautiously.
“There’s no question the industry took
a heck of a beating with the economy and
although it’s coming back, it’s coming back
slowly,” says veteran industry consultant
James Dowd, chair of the Irrigation
Association’s Ambassador Group. “You see
some bright spots but for the most part,
people aren’t ready to jump up and down
for fear of jinxing it.”
Irrigation contractors face increasing water restrictions
and licensing requirements, but look to 2013 with hope.
CAUTIOUS
OPTIMISM
In many parts of the country, the impact
of the recession lingers. “The economy
is definitely still impacting what we’re
doing with irrigation here in Florida,” says
Judith Benson, president of Clearwater
PSI in Winter Springs. “However, there are
pockets in Florida that are starting to get
some new home construction and some
activity on smaller commercial properties
so we’re hopeful things are starting to push
forward.”
In the Northeast, the economy has
left its mark as well. “We’re still dealing
with the remnants of the recession,” says
Bill Gallagher, president of Summer Rain
Sprinkler Systems, in Greenwich, Conn.
“Quite frankly I still wouldn’t call these
‘good times.’ There are still markets that
are really struggling here. In the end, it all
comes down to jobs and our government
isn’t creating jobs. If people can’t find work,
they certainly aren’t going to invest money
into an irrigation system.”
Although most of the country still feels
those lingering effects, in Texas, where the
economy never really tanked, business
appears strong. “Here in Houston, we
certainly outpaced the nation this year,”
says Wade Martinez, president of CBS
Services. “Our economy has stayed pretty
strong over the last few years and we were
never really impacted by the downturn that
the rest of the industry felt.”
“We’re seeing a slight uptick in
residential builds and even commercial
builds,” says Dowd, who’s based in Dallas.
“But even though Texas didn’t get hit as
hard as the rest of the country, we did still
get hit so everyone is cautiously optimistic.
We’re hoping for the best but from a money
standpoint, most are still holding back.
If they need to hire more people, maybe
they’re hiring two instead of 10. Or maybe
they’re investing in training instead of hiring
at all.”
John Newlin, owner of Quality Sprinkling
Systems in North Ridgeville, Ohio, says that
his business had an exceptionally good
year. “Unlike some of the negative talk I’ve
heard, I feel the economy has improved
dramatically,” he says. “I think part of it is
that people are just tired of being tired and
they’re starting to spend again. I definitely
see people spending money in areas where
they weren’t two years ago.”
Newlin says he’s seen growth across
“We’re seeing a slight uptick in residential
builds and even commercial builds.”
– JAMES DOWD, IA AMBASSADOR
BY LINDSEY GETZ

11. REPORT
STATEof the
INDUSTRY
2012
S18 STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE
the board. Even his low-voltage lighting
installations have gone up three times
as much as last year. To him, that means
people are willing to invest in their
homes. Over in Haddonfield, N.J., Marty
DeNinno, president of Pinnacle Irrigation
& Nightlighting agrees that homeowners
are finally investing again. “If I had to pick
any one trend for this year, I’d say it’s the
fact that homeowners are taking care of
their properties again,” DeNinno says. “We
have customers putting in pools and adding
night lighting, so of course they’re willing to
invest in irrigation. Irrigation is one of the
least expensive things a homeowner can do
to get bang for their buck and have a nice,
green property.”
RESTRICTIONS AND REGULATIONS.
Though there seems to be an upswing
from the recession, there are still many
challenges that the industry faces.
Water restrictions top the list for many.
“Government intervention in our industry is
getting more and more invasive,” Martinez
says. “You’re seeing a lot more guidelines
and restrictions as the government gets
involved.”
Martinez also says stricter immigration
laws may impact the industry, as will
changes to healthcare. “An overhaul of
the healthcare system will certainly affect
the bigger companies but is probably
not an immediate change in 2013 – no
matter what happens with the election.”
Benson says licensing is a hot topic in her
region. “The Florida Irrigation Society is a
proponent of licensing and I am, too, but I
also recognize it can carry a double edge,”
she says. “My hesitancy is that I don’t see
it making any real impact on a residential
level and that’s significant in Florida since
we have so much residential acreage.”
“State licensing is definitely a trend,”
adds Kurt K. Thompson, of K. Thompson
& Associates, a landscape water use
consulting and training firm headquartered
in Pensacola, Fla. “This seems to be a
loved and hated thing. It definitely doesn’t
prevent bad systems from going in or bad
work from being done, but it is a more
formal way of keeping track of everyone. I
think it produces more responsibility.”
ALSO TRENDING. Water conservation
continues to be the hot topic for 2012 and
will carry into 2013 and beyond. As the
cost of water rises – or threatens to rise
– consumers are paying closer attention
to water usage. “The public is more aware
of water waste because they have to pay
for that extra water in most instances,”
Gallagher says. “Here in Connecticut, its
state law that every system has a rain
sensor but there are still some very old
systems that don’t have it. If homeowners
see that their irrigation system is on
during the rain, they’ll call us to check the
rain sensors. That’s new, as in the past
they would just ignore it. In fact, some
homeowners are even calling to tell on
their neighbors. There’s definitely a greater
recognition of waste. People are more
aware that water is a limited resource and
want to protect that.”
Newlin agrees. “Water conservation
continues to be the big trend,” he says.
“Here, what’s pushed it is the drought. We
can actually gauge our phone traffic by
water bills. When the water bills start hitting
the street, that’s when our phone starts
ringing. But that’s also making people more
receptive to embracing the new technology
out there.” In terms of new technology,
Martinez says evolving ET technology as
the hottest trend. “Getting things like the
Solar Sync down to a lower cost is going to
be very valuable to the consumer,” he says.
“They’ll still want to keep prices competitive
on installation, too. I see a lot of potential
ahead. I don’t think it will be long until we
see more homeowners monitoring their
sprinkler systems from their smart phones.
That’s the next big thing.”
Diversification is also a trend, which was
first initiated by the downturn. “Businesses
that played it smart and survived were
those that diversified,” Dowd says.
“Over the last few years we’ve seen
everything from irrigation contractors who
plow snow in the northeast winters to
contractors who are adding more services.
If they used to only do new installs, now
they also do repairs.”Thompson also sees a
greater emphasis on education as a rising
trend. “In the past, irrigation contractors
have put more of their focus on their trade
– and they’re great craftsmen and very
good at what they do,” Thompson says.
“But now there’s more of a need to get
educated on the best business practices.
That can be hard for the guy that spends
his day toiling in the trenches to also know
how to sit down with a company CFO and
talk financials and business. But fortunately
there are more opportunities than ever
before to get educated.”
LOOKING AHEAD. Even irrigation
contractors who have still felt the squeeze
from the recession say they have hope.
“People have a lot of fears about our
future,” Gallagher says. “When they look at
our national debt, they start worrying about
their own debt. But in the end it will come
down to jobs. If our government takes the
uncertainty and regulations off of small
businesses, I think we can see things turn
around.” SOI
“The economy is
definitely still impacting
what we’re doing
with irrigation here in
Florida.”
– JUDITH BENSON,
CLEARWATER PSI
“We’re still dealing with the remnants
of the recession. Quite frankly I still
wouldn’t call these ‘good times.’”
– BILL GALLAGHER, SUMMER
RAIN SPRINKLER SYSTEMS
Which of the following
do you offer?
Installation
34%
Maintenance
48%

12. STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE S19
Service breakdown
Overall, contractors reported growth in 2012. But things weren’t rosy everywhere.
Here, we dig into specific services to see how the booms and busts fared.
On average, the contractors who saw a boost in these services, saw this percentage of an increase.
On average, the contractors who saw a decline in these services, saw this percentage of a decrease.
Design/build
Mowing/maintenance
Lawn care
Irrigation
Trees and ornamental
Snow removal
Landscape lighting
20%19% 36%37% 17%16% 7%8% 5%5% 3%2% 3%2%
What were your fastest-growing services in 2012 and 2013?
2013
2012
Lawn maintenance
17%
16%
Design/build
18%
19%
Lawn care
19%
11%
Irrigation service
13%
17%
Tree care
5%
4%
By what percentage have your total gross sales revenue changed
from 2011 to 2012 for the following services?
By what percentage do you expect your total gross sales revenue
to change from 2012 to 2013 for the following services?
19%
8%
17%
8%
3%
19%
16%
9%
9%
2%
Lawn maintenance Design/build Lawn care Irrigation service Tree care
2011 2012
2012 2013

13. S20 S21
REPORT
STATEof the
INDUSTRY
2012
STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPE S21
F
or those focused on the lawn care segment, the road
has surely been rocky at times. For a long while, many
customers were only opting for the bare bone services and
perhaps forgoing some of the upsells that were once big
revenue drivers for this market. While things appear to be turning
around, most lawn care businesses report that they still have some
concerns and aren’t ready to say they’re in the clear just yet. Many
customers still aren’t spending what they used to, though business
does seem to be taking a better turn.
capable as well — it’s not just
the one-man-and-a-truck type of
competition.”
Kevin Igoe, co-owner of
Your Green Team, a lawn and
landscape company in Plant
City, Fla., that specializes in
fertilization, plant and tree
care, and pest control, says that
the Florida market has been
saturated by competition as
well—but in his area it’s a lot of
low-ballers. “There are so many
companies going out and doing
work so cheap that nobody can
make money,” he says. “We’re
losing good customers over
pricing. And then when they
invest in bad service and get
poor work done, it hurts the
industry’s reputation. That’s
one of our biggest challenges
right now.”
The company focuses almost
entirely on the residential
market in this post-recession
period. Igoe says that the
downturn in the economy really
hurt their commercial segment.
While he previously worked
with a lot of Homeowner’s
Associations, Igoe has found
the HOAs are now saving
money by not investing in
fertilization plans and just
mowing whatever grass still
grows. He says the company
is focusing on holding its own
with its residential customer
base as a result. “We’re trying
to get more aggressive,” he
says. “We’re targeting specific
areas as opposed to blanketing
the whole area like we used to.
We’re really getting strategic
about our game plan and trying
to figure out who to put our time
into selling to—and who not to
worry about.”
In upstate New York, Laurie
Broccolo, owner of Broccolo
Tree and Lawn Care in
Rochester, offering lawn care
and maintenance, design/build,
integrated pest management,
and environmental consulting
services, says that the economy
has been relatively stable
the last few years. “It has not
affected lawn care fertilizing
programs,” she says. “It did
affect landscape design/
build projects but those are
starting to come back. What
has suffered is our tree care
segment. People are not
making that a top priority and
are a little more willing to wait
and see how things go.”
While some areas have
seen a better turn, many
report that their regions are
still struggling. Customers are
anxious about spending and
companies have to work harder
than ever to maintain and build
a customer base. “I don’t see
any meaningful improvement in
the economy,” admits Jon Parry,
general manager for Bemus
Landscape in San Clemente,
Calif. “Our sales have picked
up, but that’s more from our
stronger sales efforts and not
any major improvement in the
economy. While home sales
have picked up a bit here in
Southern California, that’s
only a short-term positive sign.
Until we see some sustained
increased, we will remain only
cautiously optimistic.”
TARGETING THE CUSTOMER.
In New Jersey, Mike Haskell,
owner of Plant Solutions Tree
& Lawn Care Specialists based
in Warren and Short Hills, says
they’ve been targeting the
high-end residential consumer
who is still willing to invest.
Haskell says that in the market
where he’s located, customers
are willing to spend the money
if they see the value. “We try
not to get caught up with the
guys that are low-balling and we
aren’t willing to get involved in
any price wars,” Haskell says.
“”Honestly, that’s what sells our
industry short. We are aiming
for the customers who are
spending money the right way,
A LIGHT IN THE DISTANCE
LCOs report an improving – but
not yet thriving – market.
BY LINDSEY GETZ
“It’s finally starting to pick
up more,” says Mark Utendorf,
owner of Emerald Lawn Care, in
Arlington Heights, located in the
northwest suburbs of Chicago.
“Business had been flat for a
while.”
Emerald Lawn Care focuses
on fertilization, weed control,
pest control, aeration and
tree and shrub care. Utendorf
says that because they’re
a small business, focused
almost entirely (95 percent) on
residential customers, they’ve
still been able to grow during
the recession. But even so, it’s
been slow growth. Utendorf
says it’s largely the steep
competition. “The Chicago
lawn care market is extremely
competitive and it seems like
companies just keep coming,”
he says. “We’re pretty saturated
with competition and that’s
definitely a big challenge. Most
of our competition is quite
for a superior service, because
they’ve learned what happens
when you spend it the wrong
way. Instead of paying twice;
they pay once and get it done
the right way.”
Tim Jenkerson, co-owner
of St. Louis Lawn Care in St.
Louis, says that he’s also
held steady on price. He
recognizes that there will
always be businesses that go
out there and undercut his
charges, but most customers
are willing to pay for customer
service, professionalism, and
knowledge.
“Some people just want
their yard cut for a cheap
price and that’s fine — there’s
always someone that will do
that,” he says. “But we don’t
let that affect us. That’s not
the customer we’re going for
anyhow. We just try to be as
reliable as possible and put a
major emphasis on customer
service and we’ve found there’s
always going to be a customer
base that appreciates those
efforts.”
In Southern California, Parry
says that Bemus is raising its
prices for the first time in five
years. “We’re raising it just
slightly and that’s due to rising
costs,” he says. “Despite the
economic situation, I think that
customers are being receptive.
The raises are very limited
and also targeted increases.
Customers do understand that
five years without any increase
is very generous and that we
still have to run a business.”
Parry says the company
will target their customers
with more emphasis on their
tree care division. While new
installation work is down and
the company has turned away
from putting a lot of effort
into those sales, they see
potential growth in tree care.
The economic situation has
certainly caused many to re-
evaluate their offerings.
In the Chicago area,
Utendorf says that a big change
for him will be getting out of
snow. “It’s just too hard on
the equipment and it doesn’t
generate enough money to
justify the wear and tear on
the trucks and the people,”
he says. “I’ve looked at other
services but just feel they’re
a distraction from our target.
We’re going to stay laser-
focused on providing the best
quality turf care we can.”
LOOKING AHEAD. With a
new year around the corner
and many possible changes
on the horizon, it seems most
in the lawn care segment are
remaining cautiously optimistic.
Many hope that some of the
green industry’s challenges
will be faced, but recognize
there are still obstacles to
overcome. Looking toward
the future, Haskell has some
concerns about the lack of
education. He feels it hurts the
industry’s reputation. “A lot of
technicians we’re seeing have
a serious lack of training,” he
says. “There also isn’t a lot of
education given to the client
and we’re huge on that. We love
to educate the client so that
they can understand why things
cost what they do. Once they
understand why soil biology is
so important, they understand
the value behind our knowledge
and experience—and they’re
more willing to pay for that
quality service.”
In Illinois, Utendorf says
that his biggest concerns for
the future center on finding
quality workers. “Finding
good people that you can rely
on is always a challenge in
this industry,” he says. “We
need good technicians that
are really focused on quality
and customer service. With
the saturation of competition
that makes it even more
challenging.”
But Utendorf says he has
some hope for the future. “On
the positive side, I am excited
about the economy potentially
turning around even further,”
he says. “It definitely seems like
there’s a chance we may finally
turn a corner.” SOI
Fertilization
Weed control
Disease control
Insect control
Which of the following services does
your company offer?
72% 71% 47% 51% 22% 65% 72%
Organic lawn care
Aeration
Seeding

14. How confident are you the landscape
industry will grow next year?
Very
confident
37%
Not at all
confident
12%
Somewhat
confident
51%
REPORT
STATEof the
INDUSTRY
2012
STATE OF THE INDUSTRY OCTOBER 2012 LAWN & LANDSCAPES22
Business associate referrals
66%
Company website/email marketing
56%
Yard signs
30%
Yellow Page ads
24%
Direct mail
23%
Internet search/SEO
22%
Internet referral service
20%
Door hangers
18%
Newspaper ads
18%
Public relations
17%
Cold calls/canvassing
16%
Door-to-door sales
12%
Home and garden shows
11%
Telemarketing
4%
Company retail store
3%
2. Consumer confidence
3 (t). Stress
3 (t). Health insurance costs
5. Low-ball competitors
6. Weather
7. Generating quality leads
8. Workers’ compensation costs
9. Delinquent payments
10. Customers cancelling
services
TOP
MARKETING
METHODS
USED
Customer
referrals
98%
TOP
CONCERNS
1. Fuel prices