Yard and Garden (Landscaping) Industry Focus

While the landscaping services industry rose to prominence in the service sector of the economy in the late 1990s, this service industry has its roots in the nation's economic expansion following World War II when housing developments grew in huge numbers almost overnight. Thousands of tract subdivisions were built on the perimeter of urban areas, and all of those homeowners needed someone to landscape their yards and assist them in planning gardens.

Strong housing starts throughout most of the 1980s and improving demographic trends boosted sales in many traditional landscaping services. In addition, new services, such as chemical lawn treatments and hydroseeding, offered growth opportunities. Demand grew for more elaborate landscaping, which led to a greater demand for landscape maintenance services as well. The boom in new home development, fueled by lower interest rates, enhanced growth in this service industry.

Add to that the rise in the number of two-income families and the time limitations imposed by having two full-time careers in the household. With no time to do the work themselves, homeowners turned more and more to landscaping services firms to design, develop and maintain their investment.

In addition, growing concern for the environment has opened the market for environmentally friendly and "green" landscape installation and maintenance. Many technological advances in products, plants and equipment have created opportunities for expansion. Landscape remodeling is also a strong factor in landscape firm growth as more homeowners and businesses are becoming aware that landscaping can provide a 100 to 200 percent return, with property value increases between 14 and 25 percent.

The landscaping industry is primarily composed of private landscape architecture firms and self-employed landscape architects. According to the U.S. Department of Labor, roughly 26 percent of the 22,000 landscape architects in the early 2000s were self-employed, a rate that is nearly four times that of other industries. Not only do these professionals work for private homeowners, but they also design land-use areas such as parkways, golf courses, parks, malls and the green areas surrounding businesses.

Landscape design and build services were the second-largest segment of the lawn and garden industry in 2003, accounting for 25.8 percent of industry revenues.

Professional landscape planners study engineering and graduate from an accredited program in their fields. Apprentice landscape architects can earn between $45 and $75 an hour, with licensed principals earning from $90 to $200 per hour and annual salaries of between $50,000 and $150,000. In the early 2000s, the median salary for landscape architects was $43,540.

Landscape designers, who do not have to graduate from any program or pass any licensing tests, perform many of the same tasks as landscape architects, such as the design of hardscaping with walls and walkways, but average about $50 per hour. Though the majority of landscape architects remain in private firms, an increasing number are migrating to large-scale design firms that offer landscape planning as one of a range of diversified services.

As in 45 other states, in Missouri, landscape architects are required to pass the Landscape Architectural Registration Board, which is given in June or December of each year. While a landscape architect is not required to be registered in Missouri, only registered landscape architects are allowed to claim the term landscape architect.

The employment outlook for landscape architects is favorable through 2010, according to the 2002-03 Occupational Outlook Handbook. And it's easy to see why. The American Nursery and Landscape Association reports that in 2003, consumers spent a total of $37.9 million on professional landscape and lawn services, compared to $28.9 billion in 2002, an increase of more than 30 percent.

The largest cost in a landscaping firm is labor. With increasing fuel costs, traveling to job sites and running equipment dependent on gasoline have increased those costs dramatically. Unfortunately, those costs are being passed onto consumers.

One market opportunity for landscapers is in the area of interiorscaping — designing and tending to plant life inside a home or office. Many firms are considering adding this to their line of services, and many consumers are realizing the cost benefit of using one firm for both outdoor and indoor landscaping.

In terms of technology, for many years, landscape design work was done by hand at drawing boards. However, in the early 2000s, more and more landscape planners are using computer-aided design systems. And, advances in global positioning systems and computerized Geographic Information Systems (GIS) have made the work of landscape architects assigned to large-scale areas, such as parks and campuses much easier. Use of video simulation to help clients picture landscaping design is also increasing.

Finally, the key to success in the landscaping business is to have good references and a good reputation. According to a survey conducted by the American Nursery and Landscape Association, more than 67 percent of consumers indicate that is the first thing they look for when seeking a landscape professional. A satisfaction guarantee is second, at 40 percent, followed by free estimates, having been in business a number of years and being a locally owned and operated company.

- Mary Paulsell, Director, MU's University Center for Innovation and Entrepreneurship 4/17/06