Peter O’Toole, President of the ALCI and Director of Peter O’Brien Landscaping, articulates some tough questions or Ireland’s aging landscape construction sector
The recent recession impacted on every part of our economy and the landscape sector had no immunity card to play. Despite hopeful discussions and predictions that many Irish people had built up big reserves in savings and that they would spend a lot of this on renovating their houses and more importantly would splurge huge amounts on their gardens (in lieu of going on that second and third holiday and being less vulgar than upgrading to the new car). It never happened. Contraction in the economy was mirrored in the contraction of the size of landscape companies. Ironically, the number of landscape contractors (individuals or companies offering ‘landscape’ services’) increased, tax compliant or otherwise, incrementally in ratio to the continuation of the recession.
“I have seen ‘The Family Business’ described as an oxymoron in that a family is all about unconditional love and forgiveness, and a business is quite the opposite”
Most landscaping companies are typically owner-managed enterprises, having evolved from the owner initially starting up the business and growing it as demand increased along with their reputation. Landscaping, especially on the private garden and small commercial scale, relies on that personal input and control because this is what provides the basic things such as confidence from the client as well as satisfaction on behalf of the contractor (on the understanding that financial gain alone is never enough for a successful business). This scenario naturally leads to company owners remaining in the position of the identifiable individual who must be in charge of all aspects of the business. This was probably brought to light when the recession was hitting hard and individuals who were at the stage of their hard-working and successful career were now drawn back to take up the helm again at a stage when they should have probably been heading towards a comfortable retirement. This could be described as bad strategic planning and is an undesirable and unwelcome situation, albeit difficult to avoid in such a business as described. It also allowed others who had not yet reached those mature years, the opportunity to reflect on their own situations and a chance to plan a different strategy.
“This leads to a lot of continuous pressure on the owner and leaves them forever tackling the present and never affording themselves the opportunity to plan the future”
If the typical landscape company described survives for more than a few years, it generally evolves into a family business. This is naturally the most desirable scenario from the point of view of pride and an extension of family values such as trust, reliability and dedication and all the rewards that follow these. However, I have seen ‘The Family Business’ described as an oxymoron in that a family is all about unconditional love and forgiveness, and a business is quite the opposite. This said, the most successful family businesses, from any sector, are generally those who bring on board high-level leadership and business skills with energy and vision from outside. This mix proves to be healthy and combines the best qualities of both sides. If this setup is successfully adopted as a business model there is no reason why the original owner of the company cannot head towards retirement, or go on to explore different business avenues, recognising the entrepreneurial skills they possess to have started and run a business in the first place.
Ask yourself the question: are you happy to carry on as the main figure in your business for as long as you physically or financially can, or are you better setting up a more stable situation, which doesn’t require your constant input? The latter might present you with a big psychological challenge initially, but would possibly allow you to explore, develop and apply your business in new, more rewarding ways.
“Ironically, the number of landscape contractors increased, tax compliant or otherwise, incrementally in ratio to the continuation of the recession”
This obvious advice is perhaps more important in the situation where there is no possibility or willingness of family involvement in the ongoing business. This leads to a lot of continuous pressure on the owner and leaves them forever tackling the present and never affording themselves the opportunity to plan the future. Expanding the business ensures a more secure future and rewards the hard work put into it over the years. It can provide a valuable income with minimum input or even a company that has a real saleable value. Failure to plan for this will lead to possible difficulties at retirement age, not least being the liability of employees with both the financial and human costs of redundancies.
Prior to the last recession, we experienced a boom (nothing new in that cycle) especially in the building sector to which we are closely allied. This led to the obvious situation, where landscape companies expanded in an attempt to supply the ever-increasing demand for their services. It is generally discussed and agreed that the same explosion of growth in this industry is not going to happen again, but like the last time, the uncertainty of the future is the only predictable factor ahead of us. It is important that we plan for the future and try to avoid the mistakes of the past.
The most important thing to decide on the strategic plan for your business is to decide what size you want it to be. Avoid growing or shrinking accidentally or by factors outside your control. Decide if you want to remain a small company carrying out work that will allow you to achieve big margins or a larger company with management and a business structure that will probably deliver smaller margins on a bigger scale. Don’t be too proud to seek professional advice from such areas as accountants or business consultants who can help develop your business model. Planning and setting goals are basic principles in any business but quite often, landscape contractors are typically ‘too busy’ working to step back and afford themselves time to carry out these essential core business activities. ✽
 PETER O’TOOLE Dip. Hort. (Kew) is the President of the Association of Landscape Contractors of Ireland, a Director of Peter O’Brien and Sons (Landscaping) Ltd and a leading commentator on Ireland’s Landscape Contracting sector. He can be contacted on 01 845 2555 and peter@obrienlandscaping.com |
