Operating costs inch up, but landscape professionals don’t have much to complain about.
Despite the LM Industry Pulse revealing an 11 percent increase in overall operating costs over last year, contractors interviewed for the report didn’t report many outrageous increases.
For Chris Solimini, the most difficult cost to contend with is taxes. “You’re trying to have a legitimate business and play by the rules, and it’s coming out to 35 percent of every dollar,” says the president of Pavilion Landscape Management in Ballston Spa, N.Y. The four-year-old company expects to do $200,000 in revenue this year. “When you’re trying to make enough money to give your employees a respectable salary, it’s very challenging.”
In some years, skyrocketing costs for fuel, fertilizer or other supplies have added to the challenge. This year, manageable increases were reported for most categories.
For example, the survey showed a 7 percent increase in fuel costs for 2014 over 2013; however, gas prices are decreasing in the fourth quarter and could come in even lower. Companies are happy to see those savings fall to the bottom line. The fuel expense at S&D Landscapes in Essex, Vt., is tracking $2,000 less this year than last year, despite an expected 5 percent to 10 percent increase in business from $427,000 to more than $450,000.
“Prices were pretty stable through the summer this year and gas started going down in the last two weeks,” said General Manager Aaron Smith in November.
In some regions, however, plant material costs are up and grass seed is scarce and expensive.
On many of the installation jobs Mark Todd bid last year that weren’t agreed to until this year, he had to go back to the customer and explain plant cost increases and shortages. The problem was with trees and shrubs, said the owner of Todd Quality Landscape Services in Spring City, Pa. Annuals held steady.
Turf seed also jumped about 10 percent for him—by $8 or $9 per 50-pound bag.
Solimini is seeing even larger increases on turf seed.
“Grass seed is very hard to come by and it jumps,” he says. “I was used to paying $75 to $80 per bag for a good blended mix,” he says. “Now a bag of straight perennial rye is $115.”
Suppliers tell him supply is down at turf seed farms and drought in the West isn’t helping.
