Nobody needs to tell a property manager about rising costs and pinched budgets.
It’s impossible to escape.
So when it’s time to renew the contract for your commercial landscape maintenance, you probably expect to see that cost increase, too. It just makes sense.
“It’s been a tough market,” says Larry Leon, director of business development at Level Green Landscaping.
Prices are up across the board, he says, but not everybody understands that affects the landscaping business, too.
What factors affect the cost of commercial landscape maintenance in Washington DC?
Leon walks us through it.
The Two Biggest Costs of Commercial Landscaping Maintenance: Labor and Materials
“Those are what we call direct costs,” Leon says. “They can be directly charged to a specific job we’re working on. This job took this amount of labor and this amount of materials.”
The cost of both these factors has been skyrocketing, he says.
“Those two factors can make up to 60 percent of the total cost of the job that the customer is paying for,” Leon says.
“But that doesn’t mean we make 40 percent profit.”
Far from it. Overhead expenses are considerable, too.
What are the factors that affect commercial landscape maintenance pricing?
“The increase in labor costs has been even greater than inflation,” Leon says.
Labor has gone up more than 15 percent in the last year and a half, he says.
“The cost of materials has gone up dramatically,” Leon says. Just two examples:
The price of grass seed has gone up 100 percent because of drought and fires in the West where it’s grown.
The price of flowers has increased because natural gas costs have soared, which makes heating the greenhouses where they’re grown more expensive.
3. Purchasing Equipment
You might have noticed that commercial landscaping maintenance crews don’t exactly travel light.
“In the landscape maintenance business, equipment cost is a big number,” Leon says. “We have to buy a lot of trucks, trailers, mowers, hand-held equipment, snowplows, loaders. It’s a huge cost of doing business. And we have to incur all the costs of snow equipment whether or not it snows.”
The price of trailers used to transport landscaping equipment has gone up 50 percent due to supply chain issues. The cost of all vehicles is up, too, Leon says, due to high demand and reduced supply.
4. Maintaining Equipment
All that equipment gets constant use, so maintaining it is a big cost of commercial landscape maintenance, from the fuel to run it to the mechanics to keep it running to the parts needed to occasionally repair it.
“Just the fuel is a significant cost, depending on the price of fuel,” Leon says. “That’s been sky high lately, but now it’s finally starting to come down.”
5. Administrative Costs
There are a lot of costs of commercial landscape maintenance the customer doesn’t always see, Leon says, from insurance to cell phones to computers.
Investing in technology costs money, Leon says, but it also saves money, by increasing efficiency and reducing waste.
Everybody’s Feeling the Budget Pinch
“There have been increased cost in all of these things that businesses have had to absorb in the last two years,” Leon says. “At the end of the day it’s important to note that the landscaping business is not a high-profit enterprise.
“We have not been able to pass on all these increased costs to our customers in their entirety,” he says. Customers are feeling their own budget pinch and don’t want to pay higher landscape maintenance costs.
“The property managers of many of the properties we maintain are under tremendous pressure to control costs,” Leon says. “Some are responsible to shareholders and have to prove they’re making more and more money each year.”
Doing the Right Thing — Despite the Cost
Couldn’t Level Green cut a few corners to reduce commercial landscape maintenance cost?
They could. But they won’t. Level Green customers have come to expect and value high-quality service, Leon says.
“We have retained 92 percent of our customers year to year over the last 20 years,” Leon said.
That’s an incredible statistic that doesn’t just happen automatically, he says.
“We have to find other ways to counteract some of these cost increases so we can be successful and profitable,” he says, “through lean business thinking, reducing waste, being more efficient.
“All of these cost increases have put tremendous stress on the business,” Leon says. “But we’re not willing to sacrifice quality in the face of all this. Making those kinds of short-term decisions at the expense of our clients is the wrong thing to do. And our company motto is ‘Do the Right Thing.’”
Trust Your Commercial Landscape Maintenance to Level Green
Questions about commercial landscape maintenance pricing? Just ask.
Struggling with your own budget challenges? We get it.
Level Green account managers prepare an annual landscaping budget for our commercial customers. It saves you a lot of work. You pick and choose the services you need. Your account manager can help prioritize what’s important to you.
We get budget worksheets out in July, before the busy budget season.
If you’re not already a Level Green Landscaping client, we’d love to add you to our growing list of happy customers.
Our focus is on commercial properties like offices, mixed-use sites, HOAs, municipalities and institutions in Maryland, Washington DC and parts of Virginia.
Contact us at 202-544-0968. You can also request a free consultation online to meet with us one-on-one.
We’d love to hear from you.