Landscape Management, October 2013

S15 also has witnessed clients who are open to paying for quality Im seeing the shift from the priceconscious decision making mentality back to the quality side of the pendulum he says That bodes well in our favor Were not trying to be the low cost provider yet were forced to compete with national firms in our market His companys landscape division does just north of 2 million in annual revenue most of its business comes from the homeowners association HOA market He calls the landscape market overall strengthening to very strong compared to 2008 Its nothing like it was in 2004 through 2006 he says But if things keep increasing like they have been over the last year and a half we could get back in that neighborhood Bidding wars subside Competing on price with national landscape firms may be less of a concern Wilson says noting hes heard The Brickman Group and ValleyCrest Cos are not bidding as low as they once were More good news Some say commercial clients are going out to bid less frequently If you can keep the customer happy theyre not going to go out to bid in fact theyre going to give you a price increase Wilson says Some customers think if they go out to bid their prices will go up Others say theyve been burned by low bids so if theyre happy theyll stay Owens agrees For the most part going out to bid isnt a concern he says We have one large community that puts it out to bid every three years Thats their M O even when theres no level of dissatisfaction but in general its not a concern Even so Owens has focused on lengthening commercial contracts since he joined the company in 2010 Every contract was one year he says Thirty to 40 percent now are three years One contract is now five years There is some risk to that from a labor and fuel standpoint but its a very nice community in our staple area We want to work with them and build our nucleus there Potomacs landscape division which grew 23 percent alone in its base commercial maintenance revenue in 2013 over 2012 plans to grow about 10 percent to 15 percent in base maintenance next year too Everything else tree care enhancements is extra and extremely profitable Owens says adding his companys position with two garden centers gives it a unique selling point No 1 the landscape divisions goal is to saturate the area within a 5 mile radius of one of the garden center locations to improve profitability And secondly it provides a community discount program for the residents who are part of the HOAs it maintains giving these customers 20 percent off all materials purchases The intent is to have the homeowners receive the highest quality products and plants the same thing the boards are hiring us for to keep the common grounds looking great he says of the seven year old program that services up to 7000 individual homeowners LM Additional reporting by Sarah Pfledderer AT A GLANCE COSTS POSITIVE Pricing remains low for new work Companies with existing commercial contracts _ NEGATIVE are able to get slight price increases OCTOBER 2013 LANDSCAPEMANAGEMENT NET PRICE TAGS COMMERCIAL SERVICES AVERAGE PRICES REPORTED 2012 2013 CHANGE Maintenance price visit 14458 15422 7 Design build price job 34817 34879 02 Lawn care treatment price job 11531 12385 7 Irrigation maintenance price hour 6076 6383 5