2021 Outlook for Landscape Irrigation

2021 Outlook for Landscape Irrigation

by | Jan 6, 2021

What Can Irrigation Contractors Expect
in the Coming Year?

The COVID pandemic has adversely affected nearly every aspect of the U.S. economy. Looking forward, what can we expect in 2021, specifically for the landscape irrigation industry?

Many experts are anticipating a quiet year for the entire green industry. But while some segments of the industry are predicted to struggle in 2021, others are actually expected to grow.

A COVID Survivor

Compared to most other industries across the country, landscaping and irrigation services fared well throughout the first few hard months of the pandemic. As Americans started working remotely and generally staying home due to travel restrictions, they tended to spend their vacation funds on home-related projects, such as renovations or improving their outdoor space. 

Abheek Dhawan is the vice president of Jobber, a home services automation platform. He recently stated that the green industry was hardest hit in mid-April of last year. But by June, Dhawan said, the demand for landscaping and irrigation services had returned to pre-pandemic levels.

Industry Segments Likely to Suffer

According to landscaper and podcast host Stanley Genadek, the 2021 outlook for two segments of the industry remains rather bleak:  snow removal and commercial landscaping/irrigation.

The IA’S Take
on COVID-19

In its Framework for Economic Recovery, the national Irrigation Association has recognized that the COVID pandemic has seriously impacted commercial contracts for landscape irrigation:

“As many of our customers are not able to open their doors for their customers (hotels, resorts, etc.), future business, including the construction of new irrigation systems and retrofitting old irrigation technologies, are expected to significantly decrease.”

Many people don’t realize that snow removal is usually one of the most profitable and consistent segments of the green industry. But most landscapers who offer snow removal services will likely not find much work this winter. COVID has shut down many of their big customers, such as malls and movie theaters. Snow removal contractors may have to rely on residential accounts in order to survive the winter of 2021.

Likewise, commercial landscaping and irrigation contracts have also been hit particularly hard by the pandemic. Maintenance for hotels, airports and resorts has been drastically reduced because of the virtual shutdown in travel and tourism. This trend is expected to continue well into next year. 

Another significant factor is the migration from offices to working remotely. Mark Bradley, CEO of landscaping software company LMN, speculates that office spaces “may not repopulate…for at least another five to ten years.” Until then, Bradley said, landscapers and irrigation contractors may not find the commercial segment to be financially sustainable for them.

Industry Segments Likely to Thrive

And now for the good news. The green industry segment with the brightest 2021 outlook is the one that remained strong in 2020 — the residential market.

With more American staying home, the residential landscaping segment has been booming. In fact, some contractors had more residential work than they can handle. The only problem for them has been receiving supplies in a timely manner.

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As work-from-home is expected to continue amid  social distancing protocols, personal outdoor spaces will become increasingly important. Industry experts anticipate that homeowners will choose to increase their investments in landscaping and irrigation projects in the coming year.

Weathering the Storm

If 2020 has shown us anything, it’s that some economic recessions cannot be predicted (or prevented). So the best business advice for the coming year is simply: be flexible. Some irrigation contractors may have to shift segments in 2021. If your business has relied almost exclusively on commercial contracts, you may need to focus on the residential market.

This decision could require a significant investment in training and retooling. But that’s where the demand is expected to be in the coming year, so the expenditure would be well worth it.

How’s Your Mindset?

In times of economic recession, the Stockdale Paradox often comes into play.

This concept teaches us that survivors are those who maintain a healthy optimism while also embracing harsh reality. In other words, hope for the best while preparing for the worst.

Also, if snow removal typically represents a hefty portion of your income stream, you’ll want to consider pivoting to other market segments.

On the other hand, if your company is currently focused on individual residential contracts, 2021 may be a good year to branch out into homeowner associations. The pandemic has had little impact on the budgets of most HOAs — and landscaping still represents the largest portion of those budgets.

Overall, the green industry has proven to be quite resilient in the face of numerous COVID-related challenges. By remaining flexible, irrigation and landscaping contractors can continue to weather the storm throughout the coming year.

Sources:
Featured Image:  Pixabay
Total Landscape Care
Landscape Management Software
Irrigation Association
FirstService Residential

Getting Into Snow Business

Getting Into Snow Business

by | Jan 8, 2020

Snow Removal Can Help Keep
Your Business Afloat in Winter

Snow and ice removal is an alluring business for landscape and irrigation contractors who need to keep their people and equipment employed once the temperatures drop.

Should you consider adding snow removal to your menu of services?

Nearly three-quarters of professional snow removers are landscape contractors during the warm weather, according to Lawn & Landscape magazine. And of the 294 members of the Ohio Landscape Association, 61% offer snow removal services.

But only one-fourth of Ohio Irrigation Association members advertise snow removal services on their websites. If you don’t currently provide snow removal, there are several reasons why you may wish to consider including this service in your portfolio.

No Business Like Snow Business

Clients want a single source for all their property maintenance needs. Adding snow and ice removal to your services allows you to touch base with current customers during the winter. It can also help get your foot in the door with new property owners.

Of course, the snow and ice removal business is either feast or famine, since it all depends on Mother Nature. In addition, snow and ice services can be just as large and complex as any landscape or irrigation project.

But savvy contractors can still find ways to turn a winter profit by establishing sound operational procedures and business systems.

John Allin, a snow and ice consultant based out of Erie, Pennsylvania, says that snow removal can be a very profitable business. “It actually has a much higher margin than landscape or irrigation work, generally speaking,” he said.

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In return for your time and effort, you’ll create a new profit center, while keeping your most valuable employees, and staying connected with your clients throughout the winter months.

Costs and Contracts

Allin thinks contractors should treat the snow removal component of their business as a separate entity, with its own set of expenses and its own revenues.” The primary costs to consider when getting into the snow removal business are:
Snow business

  • Equipment (plow, snow blower, salt sprayer)
  • Labor
  • Fuel
  • De-icer
  • Truck and plow maintenance
  • Increased insurance premiums

Also, keep in mind your vehicle(s) will need to be replaced every 10-15 years, depending on frequency of use.

You can address the “feast or famine” concern of snow removal by offering a few different types of contracts. Customers with flat-rate contracts will pay a single fee for the whole season, whether it snows 10 inches or 10 feet. Others may pay for each visit, or for the number of inches of snow removed (“per-push” contracts).

Ohio Average Annual
Snowfall Data

City Avg. Snowfall
Akron   47.4″
Cincinnati   11.2″
Cleveland   68.1″
Columbus   27.5″
Dayton   12.3″
Toledo   37.7″
Youngstown   62.8″

Source: Current Results

Doug O’Bryan, owner of O’Bryan Grounds Maintenance in Akron, Ohio, covers his costs with a mix of contracts: about 30% flat rate to 70% per-push. He said he’s learned to be discerning about his clientele. “We probably get about a quarter of the work we quote,” he said. “If we’re getting it all, then we’re quoting too low.”

Chris Beutz, a Minnesota contractor, took a while to strike the right balance of flat-rate contracts to per-push jobs for his business. “We don’t want to have 80 or 90 percent flat-rate contracts, because if we have a snowy winter then we lose money pretty easily. On the other hand, we don’t want to have all per-push, because then if there’s no snow for a month, you have no revenue, and how are you going to pay your fixed costs?” Beutz found that a 2:1 ratio of flat-rate to per-push tends to cover his costs.

Another primary consideration for O’Bryan is a client’s location. “If I already do two or three plazas on a corner, I want to get the rest of the work on that corner,” he said. “Because if we have a loader stationed nearby, and it’s only seeing two or three hours of use, if we can get some nearby accounts and use it for four or five hours, all the better.”

A Well-Trained Crew Is Key

“Train your crew like you would train your landscape or irrigation techs,” says John Allin. “You wouldn’t send a guy that you just hired out to repair an irrigation system; you can’t do that with plow guys either.”

Snow business

Creative Commons Image by Arlington County

Of course, snow plowing is often a time-sensitive, graveyard-shift job. And the hours are often long and hard.If your customer’s parking lot must be cleared before 9 a.m., your crews need to be geared up and out the door at 3 a.m.

Still, things happen, so you’ll need to be prepared for all eventualities.

“Anything you can plan for, or write down ahead of time saves you that extra worry when things go wrong,” O’Bryan said. “We expect a certain number of absences, so we have a certain number of extra employees on standby. They might not go out, but a lot of times they do.”

Why Not?

So if your irrigation or landscape business struggles at this time of year, we suggest you consider offering snow and ice removal. Who knows? It may be just what your business needs to sail through the long months of an Ohio winter.

Giphy.com Image

Sources:
Featured Image: Pixabay
Lawn & Landscape
Irrigation & Green Industry
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