Landscaping Services
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Industry Overview
The US landscaping services industry includes more than 70,000 companies with combined annual revenue of $40 billion. Major companies include the TruGreen Landcare division of ServiceMaster, The Davey Tree Expert Company, The Brickman Group, and Asplundh Tree Expert. The industry is highly fragmented: the top 50 companies generate about 15 percent of revenue.
Competitive Landscape
Demand is driven partly by construction of new commercial properties and partly by the economy's overall health. Because management and equipment costs are mainly fixed, the profitability of individual companies depends on demand volume and operations' efficiency. Small companies can easily compete with big ones, except in providing services to large customers. Big companies operate mainly through local branches or offices that have operations almost identical to those of local companies. The industry is labor-intensive: annual revenue per employee is about $70,000.
Products, Operations & Technology
Landscaping services include commercial and residential landscape maintenance, landscape installation, irrigation systems, tree services, chemical lawn care, and "line-clearing": branch removal around utility lines. Larger companies may offer several of these services, but most provide just one. Landscape installation and maintenance account for the bulk of industry revenue; tree services account for about 30 percent. In winter, many companies provide snow removal services.
For a typical commercial client, a landscape maintenance company might provide mulching, fertilizing, and flower planting in spring; mowing, pruning, irrigation, and fertilizing in summer; and leaf clearing in fall. Services are typically provided weekly by a work crew of four to 10, depending on the size of the property. Typical equipment consists of mowers, blowers, spreaders, and trimmers, brought to the site in a trailer. A large local company may own 10 trucks and trailers, operate six work crews, and service 50 to 100 customers.
Common residential services are mowing, leaf clearing, and chemical lawn care, provided regularly, usually by a one or two person crew with a tanker truck. Tree services such as planting, fertilizing, pruning, and removal require special skills and equipment. Line-clearing is done mainly with bucket (aerial lift) trucks, chain saws, and chippers to shred the removed branches.
Labor is the major expense for most landscape companies. Most workers usually aren't unionized and are paid low wages because of the simple nature of the work. Crew leaders and supervisors are more highly paid because their knowledge is crucial to performing work efficiently. In many parts of the country, a large number of workers are foreigners who work seasonally under H-2B temporary visas. Companies sometimes knowingly or unknowingly hire illegal immigrants. Because of low pay, turnover among workers can be high. Because of the seasonal nature of the work, many companies use a large amount of part-time help. Tree and lawn maintenance work can be dangerous because of the equipment used.
Technology used in the industry is very basic. Trucks, mowers, and blowers are the major pieces of equipment used. Toro is a major equipment manufacturer and supplier. Tree care companies and companies that specialize in line-clearing use trucks with hydraulic lifts. Large cranes may sometimes be needed for pruning or removing large trees, but are typically rented.
