flowerbed; landscaping servicesSpring is in the air in much of the U.S., and that means it’s go-time for the nation’s 102,200 landscaping services companies. Their services, including traditional mowing, leaf- and snow-blowing, edging, and trimming, are offered to commercial and residential customers. These services are oftentimes complemented by planting, fertilizing, construction, cleaning, and pest/weed removal services.

Employing around 808,800 workers and generating about $91.5 billion in annual sales, landscapers sometimes operate as franchises, but most are operated independently. Would a landscaping services company be a good niche to include in your small- to medium-sized business (SMB) portfolio? Let’s take a look at the specs…

The big-picture of landscapers’ operations

  • Landscaping for commercial properties makes up a majority of industry sales (51 percent). Residential areas account for 31 percent of sales, but are often the sole focus of small landscaping firms.
  • The work is nearly all outdoors and thus subject to a number of environmental factors, such as seasonality and climate.
  • A single residential lawn will yield around $200 a month in revenue, whereas a single commercial contract will yield over $2,000 each month.
  • Start-up investments are relatively low, but fast depreciation of equipment means ongoing purchases and repairs are the nature of the business.
  • Sometimes, specialized skills (such as botany or design, or the ability to work heavy equipment) are required for certain jobs.
  • Since all work is done on site, landscapers try to build their clientele as close to their base of operations as possible to save on time and fuel.

Top trends for landscaping services

COVID-19-related impacts

Firms are expected to see growth in residential services as property owners, who cared for their lawns and flower beds to pass time and save money during the pandemic, return to work and have less time for yard maintenance. In fact, revenue growth in this “green” industry returned to pre-COVID-19 levels in June 2020 then gained steam in Q3 and hit record highs in Q4 2020.

>> Learn more about pandemic-related industry impacts on our free COVID-19 website.

Employment growth

Landscaping services employment is surging due to greater demand. Employment grew 33 percent between 2010 and 2020. As the economy strengthens and consumer spending increases, employment in the industry is expected to continue to expand.

Marketing savvy

Landscaping firms are constantly looking for more customers. While many jobs are repeated weekly during the summer, and periodically throughout the year, businesses must continually expand in order to meet their overhead costs. Direct mail, local advertising, and word of mouth are important to firms as they grow.

Environmentalism changing demand

Water shortages are just one environmental factor behind the changing demand for landscaping services. The environmental movement has made many customers conscious of the impact of chemicals, fertilizers, and gas-fed equipment on their lawns. Native, low maintenance plants, LED outdoor lighting, compost material as fertilizer, and electric-powered equipment are some of the tools of the trade for the “green” landscaping industry.

Fuel cost volatility

Since landscapers must pay for fuel to run equipment and to power transportation to each job, fuel costs have always been a large expense for them. While high prices can hurt a company, so can fluctuations in price. After dropping to $1.73 in 2020, fuel prices are now back to $2.74 or more per gallon in early 2021. Significant swings can make budgeting and planning difficult.

Risks to the landscaping services industry to consider

  • Demand depends on economy: Landscaping services are considered an optional expense by many consumers and small businesses, which they can cut back on during difficult economic times.
  • Ongoing equipment costs: While many pieces of equipment aren’t expensive on their own, their short lifespan (sometimes just 3 or 4 years) necessitates frequent buying. Additionally, due to the seasonal nature of the business, cash flow can be difficult for businesses that finance equipment purchases.
  • Low barriers spur competition: There are relatively few barriers to entry into landscaping services. Many large firms got their start when the principal decided to mow a neighbor’s lawn for some extra cash.
  • Regulation of chemicals and emissions: Many states already regulate the chemicals used in landscaping with some requiring a 6- to 8-week course for any firm wishing to handle pesticides. Fertilizer and even certain types of plants could become more regulated as water shortages become more of a problem.
  • Worker documentation: Landscaping services rely on unskilled, low-wage workers to keep overhead low. Many firms have had trouble with the legal issues surrounding their undocumented workers. As immigration policy and enforcement tightens, firms may find it difficult to find labor in sufficient quantities.
  • Lack of managerial experience: New start-up landscaping businesses often lack business management experience, resulting in a high failure rate.
  • Seasonality: Landscaping services are, in many ways, at the mercy of the elements. Businesses in locations with high snowfall can find work with snow removal, while areas that are warm year-round provide more consistent employment.
  • Climate change/drought: Dry seasons can lower the amount that firms are allowed to water with some areas switching from high-maintenance grass to local flora in order to reduce water usage. This can create both challenges and opportunities for landscapers.
  • Insurance and work hazards: Landscapers engage in physically demanding, and sometimes dangerous, work. Firms must invest in safety equipment to protect their employees from harm. Insurance for employees can be costly, and work-place injuries are a risk to every business in the industry.

Want this kind of in-depth analysis on hundreds of other industries?

Vertical IQ’s Industry Profiles cover more than 90 percent of the businesses that comprise the U.S. economy, and we are continuously adding new industries.

All of the industry information in this post came directly from the Vertical IQ Industry Profile on Landscaping Services. Reviewing this profile, or even doing a quick five-minute review of the industry’s Call Prep Sheet, gives you valuable insights into your prospect within this niche — their opportunities as well as the issues that may be keeping them up at night.

Ready to get started? Contact us today for more information or a demo!


Image credit: Matt Chen, Unsplash

Subscribe to our blog: