Industry Trends: Most Industry Companies Still Growing in 2023 - The Edge from the National Association of Landscape Professionals

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Industry Trends: Most Industry Companies Still Growing in 2023

Business has been going well for many NALP members across the country this year. Most are cautiously optimistic about 2024 and expect to see continued growth. They are also exploring battery power and robotic mower options as they prepare for the future.

Business This Year

Companies like Weed Man in the Mid-Atlantic, Lawn Butler, based in Knoxville, Tennessee, and Weller Brothers Landscaping, based in Sioux Falls, South Dakota, all say 2023 has been a good year for them with growth. Seth Kehne, president of Lawn Butler, says they plan on breaking ground on a new facility at the end of this year, despite the high interest rates and building costs.

Cole Weller, president and CEO of Weller Brothers, notes they have encountered some headwinds on the landscape construction side of things with clients taking longer to make decisions or delaying projects to 2024.

“I would say a combination of the inflationary times of 2021-2022 combined with increasing interest rates are a big part of the slowdown we’re seeing in the landscape construction divisions,” Weller says.

Nathan Dirksen, COO of Dennis’ 7 Dees, based in Portland, Oregon, says they’re also having a growth year, but it’s like the gas pedal has slightly pulled off compared to the past few years.

Meanwhile, Ashley McLeod, president of Heritage Landscape Services, based in Gilbert, South Carolina, says they are projected to surpass last year’s revenue. He says there has been an uptick in construction in the area with the recent growth and investment in South Carolina.

Kevin McHale, principal of McHale Landscape Design, Inc., based in Upper Marlboro, Maryland, says their 6-month P&L shows a 6% increase in revenue with margins holding the same as last year. He says 2022 was their best year since they started in 1981 and they are on course to perform better than 2022.

Eric Remeis, president of Yard Solutions, based in Groveport, Ohio, says 2023 has also been a better year for them compared to 2022.

“Last year, we experienced a massive amount of inflation with labor costs, fuel, and materials,” Remeis says. “In the off-season, we were able to build that into our renewal contracts to offset those increases. We also started and have stayed staffed up this year.”

Expectations for 2024

As for 2024, Brandon Sheppard, a Weed Man franchisor, sees the broad trends of growth continuing.

“By no means am I an economist, but I see low unemployment and strong personal finances continuing to drive demand for our services,” Sheppard says.

McHale says they are forecasting total revenue of $50 million next year, with 55% coming from residential design-build and 45% residential maintenance.

“We are also adding a design studio to one of our existing landscape/maintenance branches to further penetrate that market and become more visible to that specific client base,” McHale says.

Kehne says they expect to be up by 8 to 10% of their topline growth in 2024. He says they are still running wide open and doesn’t see it slowing down anytime soon. Knoxville has experienced a lot of people moving to the area, and with housing in short supply, there will be building for the foreseeable future.

Remeis anticipates most of their budget will be sold prior to spring. They are also planning on opening a new branch in the next six to 12 months, which will allow them to sell and grow at an increased rate.  

“We are scaling our growth to be mid-aggressive,” Remeis says. “We will focus on the bottom line more in the coming year as opposed to just growing for the sake of it.”

Dirksen says they expect continued growth next year with commercial construction going strong, particularly with larger properties like schools and hospitals.

“The stock market doesn’t seem to be affecting us as much as normal,” Dirksen says. “Seeing commercial construction, seeing a lot coming up in the future out of that is giving us some good indications that once the general contracting world is going, there’s more jobs, there’s more opportunities, there’s more revenue for the residential side, which then feeds our retail customers too.”

Dirksen says with it being an election year next year, everything is in a wait-and-see attitude right now, but the demand is there for the work. Many people are sitting back to see what will happen next.

“One thing that we’re keeping our eye on is, of course, 2024 is an election year and historically, people spent less money in election years,” Weller says. “So, we’re optimistic but proceeding with caution.”

Weller Brothers is also opening a new branch in Des Moines, Iowa, in 2024.

McLeod says they are forecasting revenue growth in all aspects of their business but are focusing on increasing their profit margins.

“Overall, we want to continue to improve our internal operations such as looking for areas to be more efficient, improving internal and external communication, and developing/investing in our teams,” McLeod says.

Trending Services

Many of the companies are currently exploring the possibilities with battery power and/or robotic mowers. In some cases, it is due to current clients or jurisdiction requirements.

“It can be frustrating for landscape contractors because many of the products have not been thoroughly tested and have short lifespans,” McHale says. “It is also costly and unpredictable with regard to performance and reliability.”

Dirksen agrees it is an expensive investment, but they are seeing more entities demanding companies use battery power.

“If we don’t go down this road, we’re limiting our ability to work on properties,” Dirksen says.

Remeis says they have a large account that will require them to use battery-powered equipment and, eventually trucks over the next five years. He says they see this as an opportunity to keep up or get ahead with technology as it becomes more reliable.

McLeod says they have used both battery power and robotic mowers in the past and are looking to implement more in the near future.

Weller says they are now dipping their toes into robotic mowers despite the lack of customer demand.

“I think that’s going to change,” Weller says. “Sioux Falls is a market where it seems like we’re always two to five years behind. I know that some of our industry peers in bigger markets have gotten fleets of robotic mowers and battery-powered tools. We know what’s coming our way. We’re just making sure that we’re prepared for when it arrives.”

Similarly, Lawn Butler is demoing an autonomous mower currently.

“We think that even though Tennessee is a really hard market for autonomous mowers because we’re very hilly and the grass is thick, we think that’s going to be huge,” Kehne says. “The big thing for us is autonomous mowers.”

As far as other trending services, Dirksen and Kehne have noted an uptick in requests for water management or smart irrigation services. Meanwhile, Heritage Landscape Services and Dennis’ 7 Dees are seeing their client base focus on spending more on larger projects rather than small enhancements.

“We’re seeing mosquito control services as an area of rapid expansion,” Sheppard says. “Customer awareness of mosquito control as an available service as well as regular media coverage of things like the first domestic transmission of malaria in more than twenty years has certainly driven interest.”

Jill Odom

Jill Odom is the senior content manager for NALP.