Landscape Management, June 2018

EDITORS NOTE MARISA PALMIERI eDITOR Contact Marisa at 216 706 3764 or mpalmieri@ northcoastmedia net I magine your business is a castle Does it have a moat According to Warren Buffett renowned investor and chairman of Berkshire Hathaway businesses worth investing in have significant buffers to keep their opponents at bay In other words a company with a moat has a competitive advantage so great it allows for above average profits and long term returns to investors Economic moats were in the headlines and tweets last month when SpaceX founder Elon Musk criticized Buffetts emphasis on economic moats He called it quaint and lame saying the pace of innovation is more important Their spat was about Sees Candies which Berkshire Hathaway acquired in 1972 Its reported to have a moat thanks to its quality price distribution process and retail experience Regardless of the billionaires stances on moats vs innovation which by the way do not need to be mutually exclusive the conversation made me think about the landscape industry and our LM150 list of largest landscape companies featured in this issue Do any of these companies have wide moats Experts say there are several paths to building a moat such as Maintaining low operating costs or achieving economies of scale This approach favored by Walmart allows the company to undercut competitors Creating a network effect where a companys products or services become more valuable the more people use them think eBay Having high switching costs which makes it difficult for customers to move to a competitor some software programs fall into this category or Possessing intangible assets which may include intellectual property like patents and trademarks brand equity or culture In our industry which has a notoriously LANDSCAPEMANAGEMENT NET June 2018 4 low barrier to entry a moat couldnt be more important Companies with moats have pricing power which Buffett has said is one of the most vital factors in evaluating a business If youve got the power to raise prices without losing business to a competitor youve got a very good business he told the Financial Crisis Inquiry Commission in 2010 And if you have to have a prayer session before raising the price by 10 percent then youve got a terrible business Among the ways to achieve a moat the pursuit of lower operating costs appears to be the greatest opportunity for landscape and lawn care companies Many companies in the industry say they prioritize efficiency and lowering costs but Im surprised at how much low hanging fruit is out there For example many companies even some on the LM150 list are still slow to adopt technology like GPS and software to automate office functions Though well likely never know whether Buffett would give any companies in the landscape industry moat status Id say the companies we feature in this issues LM150 supplement are moving in that direction They are fortifying their businesses through various tactics including employee education and training incentive programs and more See the list and read the stories of four of these firms in the supplement starting after page 16 Rock the moat HEADQUARTERS 1360 East 9th St Suite 1070 Cleveland OH 44114 EDITORIAL STAFF editor Marisa Palmieri 216 706 3764 mpalmieri@ northcoastmedia net Managing editor Abby Hart 216 706 3756 ahart@ northcoastmedia net Associate editor Sarah Webb 216 363 7932 swebb@ northcoastmedia net Art Director Tracie Martinez 216 280 6127 tmartinez@ northcoastmedia net Graphic Designer Courtney Townsend 216 363 7931 ctownsend@ northcoastmedia net Digital Media Content Producer Kelly Limpert 216 363 7933 klimpert@ northcoastmedia net ADVERTISING STAFF Group Publisher Bill Roddy 216 706 3758 broddy@ northcoastmedia net Associate Publisher Craig MacGregor 216 706 3787 cmacgregor@ northcoastmedia net eastern Regional Sales Manager Dan Hannan 216 363 7937 dhannan@ northcoastmedia net Western Regional Sales Manager Jake Goodman 216 363 7923 jgoodman@ northcoastmedia net Account Manager Chloe Scoular 216 363 7929 cscoular@ northcoastmedia net BUSINESS STAFF Administrative Coordinator Petra Turko 216 706 3768 pturko@ northcoastmedia net Sr Marketing event Manager Michelle Mitchell 216 363 7922 mmitchell@ northcoastmedia net Marketing event Manager Angela Gibian 216 363 7936 agibian@ northcoastmedia net Manager Production Services Terri Johnstone 216 978 9622 tjohnstone@ northcoastmedia net Senior Audience Development Manager Antoinette Sanchez Perkins 216 706 3750 asanchez perkins@ northcoastmedia net MARKETING MAGAZINE SERVICES Reprints Permissions Brett Petillo 877 652 5295 bpetillo@ wrightsmedia com List Rental Brahm Schenkman The Information Refinery Inc 800 529 9020 bschenkman@ inforefinery com Subscriber Customer Service 847 513 6030 landscapemanagement@ omeda com For current single copy or back issues CORPORATE OFFICERS President CeO Kevin Stoltman 216 706 3740 kstoltman@ northcoastmedia net VP Finance Operations Steve Galperin 216 706 3705 sgalperin@ northcoastmedia net VP Graphic Design Production Pete Seltzer 216 706 3737 pseltzer@ northcoastmedia net Director of Audience engagement Bethany Chambers 216 706 3771 bchambers@ northcoastmedia net editorial Directors Marty Whitford Marisa Palmieri 216 706 3766 mwhitford@ northcoastmedia net 216 706 3764 mpalmieri@ northcoastmedia net