Travels with Jim follows Jim Huston around the country as he visits with landscapers and helps them understand their numbers to make smarter decisions.
The most common questions that new clients ask me are, “How does my company compare to others in the green industry?” and “What am I doing right and, perhaps more importantly, what am I doing wrong that I need to address and fix?” Benchmarks and/or critical numbers are especially helpful when addressing these questions. But what do you do when you’re in uncharted waters and don’t have good historical data to fall back upon?
Just as the 2020 COVID-19 pandemic was unprecedented, so is its 2021 aftermath. Since benchmarks and critical numbers are derived from repetitive historical data, they’re often hard to decipher and are not easily adapted and applied to unprecedented times. However, since I’ve traveled to 43 states and worked with hundreds of green industry entrepreneurs so far this year, let me share what I’ve learned. Here are three unprecedented issues facing green industry entrepreneurs in 2021 and my thoughts about them:
1. Unprecedented labor shortages. Almost all of my clients could perform 20, 40 or even 50% more work if they could find the field labor to produce it. While the H-2B program situation has improved this year, the labor shortfall outweighs all other issues facing green industry companies.
2. Unprecedented opportunities. Demand for green industry services has never been higher. Due to the economy in general and our desire to be outside and enjoy the outdoors in particular, the demand to upgrade and/or beautify our outdoor surroundings is unprecedented. This is true for both the commercial and residential markets.
In addition to a robust consumer market, dozens of private equity companies have millions of dollars they need to invest and obtain a return on for their investors. Not only are these companies investing in commercial lawn maintenance companies, but now they are also looking at commercial and residential landscape installation investment opportunities.
3. Unprecedented supply chain shortages. Have you tried to buy a new truck or mower lately? Currently, I’m in the Detroit area as I write this article. The auto makers have parked thousands of cars, vans and trucks in vacant parking lots throughout the Greater Detroit area as they await electronic chips to complete the manufacturing process. The ripple effect from the COVID-19 pandemic shutdown in early 2020 is still being felt. Manufacturers lost almost a whole quarter of production in 2020 due to the mandatory shutdown. Supplies of lumber, plastics, metals such as steel, and so forth are just beginning to recover from this shortfall.
No one could’ve predicted the COVID-19 pandemic, but thinking creatively to push past these unprecedented challenges can help you grow.
Chaos breeds opportunity. Here are three takeaways for you to consider:
1. Use the supply-demand curve to your advantage. In other words, raise your prices. When a commodity (materials, equipment, labor, etc.) is rare, it is more valuable and you should charge more for it. Customers don’t necessarily like increased prices, but they’re more receptive to them in times like these. When the economy is robust, customers are more concerned about how soon they can get work done than they are about the cost.
2. Learn from the human resources professionals. Consider employing a part-time or full-time human resources professional to help you improve your company’s productivity. I’ve seen professional recruiting, hiring, on-boarding, training and so forth improve a company’s productivity 25% to 50%.
3. Research private equity opportunities. There’s a lot of money available and it’s looking for a place to land. If now is a good time to consider selling your company, it means that it may also be a good time to consider buying a company (or two, or three…).
Green industry entrepreneurs are facing unprecedented challenges in 2021. However, unprecedented challenges provide unconventional opportunities, but only if you are willing to look for and capitalize upon them. Remember, chaos breeds opportunity. If you learn to thrive in tough times, so will your company.