What are the 5 biggest challenges facing a Landscape Contractor today?
1. The uncertainty of government regulation, including taxes, health care etc.
2. The labor market including immigration and labor availability.
4. Drought condition across America.
5. The lack of available capital for growth.
The uncertainty of government regulation is creating a slow down in the recession recovery. Businesses are unsure what the government will add to the burden of taxes and additional cost to operate. The health care law would appear to be a big burden for small businesses and is yet to be defined as to the costs to employees. This uncertainty is not helping the normally conservative business community. Until this is defined, the concept of business growth and job creation will continue to stall.
The labor market may very well be the largest issue facing landscape contractors. The issue of immigration reform seems to be a political football, with no solution being offer by either side. Add to that the country’s cry for made in America, it is hard to imagine that Landscape Contractor will be able to find the necessary labor to do the work. We all know that the labor force that is currently seeking work will not perform the job functions that the current immigrant labor force is providing in our industry. Finding new resource of labor pools willing to do the manual labor isn’t easy and at this time, unidentified. This will drive the labor cost up as the demand for labor willing to perform the landscape functions increases.
The inevitable price increases, due to the drought, world shortage of items like petroleum, will force the price to increase on many items in the next 12 to 24 months. These increases are already visible at the super market and the gas pump. Although fuel prices have decline in some parts of the country, it is uncertain how long this will last. Inflation seems inevitable because of the raising debt crisis that the country is facing. Until the government finds some way to get a handle on the raising prices, as business people we are left to wonder “what if?”.
The current drought condition across the country affects landscape contractors in many ways. Less water means less planting, the drought will cause many clients to reconsider project that they would other wise go forward with and finally, the drought is not just a one season issue it will have affects for years to come. In the west we are already concerned about snow pack for the upcoming winter, and worry about there being sufficient moisture to fill the reservoirs for next season. Many experts have stated that the west is in a 50 year drought cycle with about 40 years remaining on the cycle until it ends. This can and will change the face our our industry, and not just by the ways we use water.
The traumatic swings in the stock market and the recent financial down turn have changed the face of the banking relationship with small business. This change certainly will affect the ability to borrow capital to expand businesses in the future and may affect the creation of new venture going forward. Again looking for alternative means of financing new capital needs is a must. Small business people will not be expanding and will not be hiring unless some plan is developed to encourage banks to lend.
All of this paints a bleak view for the business person, however, it may be a good thing, as it will force businesses and business owner to grow more cautious and be stronger for their effort. Those that plan and develop a strategy that allows for slow but steady growth will be successful in the end. This is why planning your business direction is so important to your future success. Look at these challenges and how you have considered them in your overall business plan.