In this article, we will cover one of the most important parts of starting a new business – analyzing the industry for trends, understanding your potential client base, and how to best position your landscape design company to meet consumer needs.
Why is Research Important?
There are a large number of companies that start by simply marketing their services to anyone and everyone in their area and essentially doing whatever work a client may want. Now on the surface, this may seem like a good strategy – the more people you advertise to and the more services you do, the greater your profits will be. Right? Well, not really.
By simply bombarding your possible consumers with non-targeted advertisements, along with a “jack of all trades” mentality, you will end up devaluing your work and quickly brand your company as the “cheap option.” – notice how I didn’t say affordable, I said cheap.
Let me give you an analogy. Let’s assume you need new furniture for your home. Chances are you will look at one of the many furniture stores in your area that sell dining room tables, recliners, beds, etc.
You probably could also go to Walmart or Target to get similar furniture, but you are making a quality investment in the product you are purchasing and therefore you will most likely choose the store specifically catered to meet those needs.
The same is true when starting a landscape design business. You need to identify what edge or niche you are going to take within the broader green industry so that you can best market your services to those people looking to purchase them. This strategy doesn’t only create growth, but it creates sustainability over time, which is important to your long-term income.
This is why I want to cover two important items in this article: Industry Analysis and Customer Analysis.
Industry Analysis
Industry Analysis is a process to evaluate the current business climate for services similar to yours – these could be design, installation, maintenance, and plant production. Additionally, an industry analysis could also review similar professions and markets that are not directly related to your services but have a direct impact on your profitability – like home construction.
Industry analysis is important because it can not only identify trends and attractive new services that customers might want, but it also gives you a better understanding of the overall health and growth prospects of your intended business.
When conducting industry analysis, it is easy to get lost in the wealth of information you can find online, so this article will help by identifying a few specific resources you should look to, along with where to go to find them, and how you should catalog the information for future reference. This should provide you with very actionable items to employ in your business planning process.
The first question to answer is: What is the current health of the landscape and construction industry? To answer this, you should look for both construction spending and occupation statistics in your area of interest.
U.S. Department of Labor “Beta Labs”
If you go to the U.S. Department of Labor’s “Beta Labs” tool, you will be able to look at earnings, occupational trends, and productivity metrics within a variety of different specialties. Here is the link: https://www.bls.gov/home.htm
Go to the website and click on the “Beta” tab and navigate to the specific information you wish to review.
For example, if I wanted information on the overall health of different landscape related occupations. I would click on the BLS Data Finder and type in “landscape services”. I would get a dialog box with several different choices to view. I can click on the “number of employees in landscape architectural services” and get a trend analysis that shows the growth or decline of employment numbers for landscape architecture.
This type of information can help you understand the larger, national trends for your specific occupation – and it doesn’t end there. If I wanted to look deeper into an occupational analysis for my sector. I can use the Bureau of Labor Statistics Occupational Outlook Handbook.
Occupational Outlook Handbook
Simply go to this link https://www.bls.gov/home.htm and click on the drop-down “Publications” and then “Occupational Outlook Handbook”. From there, you can review several different occupations and their potential growth.
Let’s say I want to search for the future outlook on carpentry. I can click “Construction”, then “Carpentry”, and I am brought to an extensive overview of the field of carpentry which displays the number of Jobs nationally, the job outlook, and the future employment change over the next 10 years.
Now, these tools are great for exploring career options and seeing the national health of your particular field, but they do have limitations. When considering a business in the landscape industry, the client base and industry trends are typically smaller in scale, whether it is a town, county, or state. So obtaining informative local information is just as crucial, and even more so, to understand the potential of your business prospects.
U.S. Census Business Builder
For regional-specific industry analysis, you can look toward a few other very useful and free resources. First, I would advise visiting the United States Census Bureau https://www.census.gov/, and click on the Explore Data tab to open up the “Census Business Builder” tool. This allows you to search not only by industry but also by state or local region.
For example, if I want information on landscape design companies in New Hampshire. I can type in landscape design as my occupation and New Hampshire as the region, and then click “create a report”. The Census bureau will then run a report consolidating all of the information on related businesses within this area, such as how much they earn, the total number of employees, and more.
The second resource for reviewing more localized information for the landscape industry is by reaching out to your state’s Nursery and Landscape Trade Association. Every state typically has a large and active trade association made up of landscape service providers, nursery professionals, and other horticultural enthusiasts. These organizations can be a great resource for more localized information that might affect your business operations.
The local trade groups are especially good for new business owners. One example of this develops almost every summer. In the metropolitan areas around New England, landscape professionals are often hit with water restrictions in the summer that limit the times and durations in which they can irrigate their client’s properties.
Keeping in contact with a local network of business owners can gain you access to information on how others are handling these types of issues and strategies to keep revenue stable.
So as you can see, industry analysis from both a macro and micro perspective can be very valuable in identifying trends and opportunities for your area.
Now while you are doing some research, it can be often difficult to evaluate which information is useful and which isn’t, so I created a helpful spreadsheet that has specific items for you to analyze on the resources I provided above and some spaces for you to input the information in an organized format. To download the free spreadsheet, just click this link.
Now that the industry analysis side is taken care of, you also need to take into account who your customers are, what services they will most likely purchase, and how your business can gain a competitive edge against your competitors – this research is all part of the larger concept of Consumer Analysis.
Consumer Analysis
When conducting consumer analysis, I would advise that you identify a specific target region or regions for your business based on the information you obtained from your Industry Analysis work. Even though it might seem useful to view potential clients on a larger macro scale as we did the industry analysis, I believe you will find it much more helpful to look within the specific area that your landscape design or services firm will be completing work.
American FactFinder
So let’s take a look at one valuable resource for this and how we can evaluate the information. The American FactFinder is a valuable website that provides demographic statistics for almost all regions within the United States and its part of the larger U.S. Census Bureau that we had previously seen.
If you go to https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml you can enter in the specific city, county, or state you are looking for information on.
For this example, let’s look at Stamford, CT. Once we search by the town, we can access information such as population, age, educational attainment, housing status, and more. It provides us an enormous amount of useful data to sift through.
If I’m interested in starting a landscape services business centered around Stamford, CT and I look at housing statistics, I notice that close to 50% of the population lives in renter-occupied housing units and that the raw number of rentals has increased steadily over the past five years. Also, of the various housing types in Stamford, close to 60% of them are designated as “attached complex dwellings”, meaning they are essentially townhomes or condominiums.
From this information, it makes it much more likely that I can gain an edge for finding a potential customer base if my services were specialized toward larger-scale grounds maintenance and design services for condo complexes, or perhaps some type of container design or patio-gardening business for the individual residential units.
If I reviewed a different town within the same state – let’s say Bethel, CT – I would see that close to 70% of the housing units are single-family detached homes, with roughly 200 home sales each year. If I wanted to strategically approach this area for landscape services, perhaps I could market myself as a specialist for preparing homes and staging them open-houses or walk-throughs. And I could advertise my services with statistics on how well maintained landscapes improve property values.
This look at housing as an example is just one of several different analytics that the Fact Finder website can help you discover. It is worth exploring before committing to a particular area and a particular niche.
Strategic Partnerships
Another valuable tool for researching your customers are strategic partners within your area. What defines a strategic partner? A strategic partner is a professional that engages with your potential consumers but does not compete with you in the same market sector. These could include pool installation companies, land surveyors, nursery professionals, city planners, and other home improvement contractors.
For the landscape design industry, I’ve found local realtors to be an invaluable source of information concerning housing trends, new home sales, attractive neighborhoods, and a whole host of other anecdotes that can help start and sustain future job prospects.
But these partnerships should be reciprocal, and well developed. You need to provide some sort of value to them as well – perhaps one of your customers has a relative that is looking to sell their home, or perhaps you own a rental unit that you need to find a tenant for. These types of strategic partnerships can go a long way into keeping a stable and healthy revenue stream for your company.
Direct Communication
Finally, the importance of directly connecting with your potential customers is important. You will need to be able to ask questions, listen to concerns, and get an overall feel for the consumers you will be targeting. So, how do you do this? There are two ways I’ve had success with:
- Direct engagement: Either going to home shows, trade shows, or city council meetings. The important thing is to actually go meet with potential customers in your area and have conversations with them. This will not only provide a good understanding of the size of your potential market, but also may assist in developing a niche for your company.
- Indirect surveying: This is not ideal, but less time consuming. Create a survey and distribute it to your geographic target area. The questions should be similar to the ones you would have asked in person, but it allows the individual to complete it at their leisure. Do not expect a high return rate -1-2% is normal.
Once again, formatting your research in an organized manner will help you compare different metrics and gain a better understanding of your consumers. A well-organized analysis can also assist in seeing trends over time. I have another free spreadsheet which can be found by clicking this link.
This spreadsheet is formatted for you to input key consumer demographic questions but also has a questionnaire to assist you in brainstorming ideas on how to differentiate yourself from other landscape service providers.
So as you can see there are a ton of resources that are at your disposal. There is no excuse for not researching your potential market and your potential clients. Identifying the macro and microeconomic trends within the industry, along with identifying the specific characteristics of your future consumers can go a long way to helping you generate a profitable business idea. Although it might seem like a lot of data to sift through, the time you invest will be well worth it in the long run.
For the next part of the Landscape Design Business Planning Series, click here for: “Part 3: Competitor Analysis”.
If you missed the prior articles in this six part series, be sure to review “How To Start A Landscape Design Business: Introduction” and “How To Start A Landscape Design Business: Company Mission & Structure“
Also be sure to review all the other helpful professional articles for landscape designers found on the Business page of our website.
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