We are continuing our 2015 Green and White Industry Predictions Series this week with insights and information from Tom Fochtman. Tom has spent his entire career in and around the green industry as a student, a business owner and now a mentor and consultant to green industry companies and organizations.
Tom encourages contractors to look forward in 2015 (and beyond) and put the pedal to the metal for the next three to four years, because as he puts it, it’s ‘make money time’ for green industry owners. Keep reading to find out why.
Go iTalk: What do you think will be the biggest positive for the green industry in 2015?
Tom Fochtman: The economy, for sure. And it’s twofold: We unfortunately lost some of our peer companies in the last downturn and those that survived right sized and are not looking back. They will not add the SGA and the overhead in general that they once had. Doing more business with less people is the new normal in conducting business today.
Every contractor I know is making money and the good ones are clicking off at a 12% net profit or better.
This is serious ‘make money time’ because this run in the economy will not be long lived. Three to four more years at best and then another downturn. The good and great companies will take advantage of this time and conduct commerce in a very positive and profitable manner.
I unfortunately spend more time than I should firing people up and getting them looking forward while keeping the past in their rearview mirror. Some folks have long memories and are too cautious to get after it, and literally as I say this they are losing ground to those contractors that are aggressively taking advantage of this economy. And money is so cheap! It is an absolute perfect time to lever and borrow money. Invest in your company! I hope we never see banks renting money this cheap again because if we do, we will be in a really difficult economy.
If I was a contractor right now I would have the pedal down, leveraging, cranking the growth meter up and investing in my business. You could not ask for better economic conditions for growing a business…with the exception of some of the governmental influences that challenge business owners today.
Go iTalk: What do you think are the biggest challenges for the green industry in 2015?
Tom Fochtman: Government! I’m being a bit cynical but the bottom line is our government has made it more challenging than ever to be a business owner. Health care, sales taxes, tax in general, an unsettled immigration policy, noise policies and a little bit of wherever you look, there is some form of governmental compliance to deal with.
It is not easy being an entrepreneur and business owner today. Having said that we live in the greatest country in the world so I’m not complaining; just pointing out it’s more challenging than ever to live the dream of being an owner of a company
The day to day challenge is attracting and adding talent to a company. Every business owner I talk to says their number one challenge is obtaining talent. We reside in an industry that is not understood and is not on the radar of the masses as a desirable career choice. Efforts by PLANET are helping but it’s a slow go and will take time to change perceptions. Bringing top level talent into one’s company is a very formidable challenge today.
Go iTalk: What impact do you think technology and/or the Internet will have on the green industry in 2015?
Tom Fochtman: Technology can be the game changer in all industries and it’s imperative that companies stay current. The little things like maintaining a data base of customers and utilizing that information, GPS in a fleet, integrated accounting software, estimating programs, etc are just examples of the tools that contractors have access to and must be utilizing.
Think about GIS Dynamics and your Go iLawn product. We used to have to visit a site and measure with a wheel. Now we use google earth or some GPS technology and there is a measuring application to complete an estimate. Amazing! That did not exist that long ago.
We are seeing a lot of advances in technology on all fronts of our industry. Software, chemicals, equipment and it’s absolutely imperative that contractors and anyone in our industry stay current or you will fall behind in short order.
Go iTalk: What is your growth prediction for the green industry in 2015?
Tom Fochtman: Difficult to suggest a growth figure but safe to say the green industry will grow. Consumers are spending money and the commercial real estate industry is thriving. Municipalities are investing in infrastructure and that requires landscaping.
I owned a landscape contracting company for almost 20 years, from 1992-2011. Lucky or good timing but we had a pretty serious economic run for our first 10 years. Then our economy followed somewhat typical cycles until we got to 2007 and the ‘great recession’ occurred.
As an adult, that was the worst economic period I had ever experienced. But this economy we are in right now and I mean NOW is as good as it gets. I would urge anyone who reads these comments to commit and make all the right moves to take advantage of this pretty great economic cycle that we are experiencing. As I said, this economy has about three to four years of life to it. The time is now!
Go iTalk: Any other 2015 predictions or comments?
Tom Fochtman: I have a few observations that I think are worth sharing. I don’t think everyone has grasped the fact that a very serious demographic driver of our industry has been the baby boomer generation and that group of folks is reaching retirement age. We have a ton of leadership and knowledge that is about to leave our industry.
I’m super excited about our young leadership that is entering our industry but I am also concerned about the perception issue that results in a lack of talent entering the green industry. It needs to be all of our jobs and mission to tout the virtues and positive aspects, and the all-out fun one can have being in the green industry!
My last comment is around being different and the need for contractors in any industry to be … different! Focus on what makes you different. Create a differentiator in your company that makes you the clear choice with your customers. Doing good work, providing good service or a good product is an expectation today. That is a basic expectation that we all have when buying a product or service.
The challenge today is to present an uncommon offering to your clients. Raising the bar in such a way that you set yourself apart from the competition and provide goods and services that a customer would perceive as uncommon, to the point that price is not a big driver. If you don’t figure this part of your business out, you will always compete on price and that is not a pleasant position to be in. And it’s not fun!
Read Blue Ocean Strategies to get your creative juices flowing. One of the best business books ever published.
Tom Fochtman has been in the landscape industry his entire career, since graduating from Michigan State University in 1981 with a BLA. He co-founded and built CoCal Landscape in Colorado to a $35M full-service landscape company. After selling his interest in 2011 he formed Ceibass Venture Partners, an investment banking and consulting practice specializing in exit strategies for small to mid-size business owners. Ceibass helps owners increase the value of their companies as they prepare for a successful and profitable exit.
Tom is on the board of PLANET, is President of PLANET’s ‘Academic Excellence Foundation (AEF) and sits on several other boards and committees of PLANET.