Do you want the good news or the bad news first? This year, 2022, will be interesting, with supply issues, labor shortages, increased demand for services, and rising product costs.
What can you do to stay in business and still make a profit?
The Good News
Fortunately, many people will be going back to the office since Covid-19 vaccinations are available, as well as medicines to treat Covid-19 infections.
Plus, kids will be staying in school longer with social distancing and available vaccinations.
That means you’ll be in demand to keep office parks, institutions, schools, and retail spaces looking their best on the outside.
Before you send out bids to HOAs and property owners, you’ll need to adjust your pricing to account for the increase of product costs, laborers wanting higher pay, and supply chain issues.
5 Factors That Will Make Commercial Landscaping a Challenge in 2022
The National Association for Landscape Professionals recently shared that 2022 will be challenging for many lawn care and landscaping companies.
While most of the statistics focused on hardscaping supplies for outdoor kitchens, patios, and fire pits, the article touched on other factors that will affect the commercial side.
Here are five factors that will make commercial landscaping a challenge for you in 2022:
- The cost of fertilizer will continue to rise in 2022. One turfgrass seed and fertilizer company shared that most raw ingredients come from global suppliers affected by the natural gas shortage, exporting, and other factors.
- Other problems include natural gas prices skyrocketing, the rising Covid-19 cases in China, and Hurricane Ida in August of 2021 that shut down ammonia plants in the Gulf Coast states.
- Higher price tag for turfgrass seed. Turfgrass growers in the Pacific Northwest didn’t have a successful harvest in 2021 due to drought and high heat. Adding staffing shortages for the seed purity labs and naturally harvesting grass seed raises the cost for turfgrass seed.
One other factor contributes to high seed costs: homeowners were buying more grass seed in 2021 for their lawns, leaving supplies low for professional lawn and landscaping businesses.
- The labor shortage affects everyone. Laborers demand higher wages and don’t stay committed to you for the entire season.
- If you provide landscaping services to commercial properties, you’ll find that ornamental fruit trees, arborvitae, and other large plants are hard to come by. You’ll need to flex your design muscles to use what plants are available.
Strategize with Billing Cycles and Raise Your Prices before Spring
In January and February, make a plan for how you’ll deal with these issues before they become headaches and expensive come spring. Here’s a list of what you can do to stay ahead of the curve:
- Talk to your vendors for pricing and product availability. It might be a good idea to order as much as you can now, then wait until spring for your shipments.
- Strategize how to manage your billing cycles to ease the pain of rising costs.
- Look at your overall financial picture. What can you do now with your accounts and financial statements to keep you in the black? Talk to your accountant for ideas.
- Consider visiting local technical, vocational, and high schools for laborers. These younger folks are motivated to work, and you can pay them fair wages without going into debt. Also, think about starting an apprentice program to train and keep these younger workers for the long term.
- Raise prices to cover your costs and bring in more money. Your goal should be to maintain gross margins. Do this ahead of time so you can add these higher prices to your springtime bids.
Who knows what the end of 2022 will look like. But preparing ahead can save you money and time.
Hurry Up and Visit MowMore.com before January 31st!
We’re keeping our products at 2021 prices at our online store until the end of January. However, there is a deadline—Sunday, January 31, 2022, at 11:59 p.m., and then, these prices go away.
At MowMore.com, we’re your one-stop online shop for all of your commercial lawn care equipment needs. If you have any questions about your landscape equipment and replacement parts, call our customer service today at 1-800-866-9667 or fill out our contact form.
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Blog.LandscapeProfessionals.org, 2022 Supply Chain Issues on the Horizon.
IBISWorld.com, Landscaping Services in the U.S. Industry Outlook (2021 – 2026).
LebanonTurf.com, The Latest on the Rising Fertilizer Market.
TotalLandscapeCare.com, Do You Have a Pricing Strategy for 2022? If Not, You May Be in Trouble.