Hello, as you may or may not know, this weekly Great Idea is actually delivered in such a format that you can comment and we can have a discussion. I’m interested to know what you think 2011 will bring. So, to start our discussion, please read the recent information I found in Lawn and Landscape magazine.

Business owners cautious of future

A quarterly survey by Citigroup found that 85 percent of small-business owners are worried about a double-dip recession. If any solace can be found in that number, it is that 75 percent polled said they are very or somewhat prepared for another downturn, an indication of small-business owners’ ability to adapt to the challenges presented during the recent recession.

The results of the most recent survey mirrored the ones from previous quarters, with 76 percent of small-business owners rating the current business climate as fair or poor.

However, optimism continues to rise with an increasing percentage of owners calling current conditions fair. Of those polled, 28 percent said their business was better off today than last year and 42 percent expect business to improve in 12 months. A growing number of owners up 5 percent to 45 percent say they expect conditions to remain the same in the next year.
(Source: Lawn & Landscape magazine, November 2010 issue)

So, what do you think? Are you thinking things will be better this year for you? Worse? Or about the same?

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Also, if you and/or your business need a little injection of energy and ideas, then by all means come see me and my incredible group of teachers at GROW! 2011 in warm and sunny Dayton, Ohio (we hope!) Feb 10-12.

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  1. Mike Ward Reply

    I am cautiously optimistic about 2011. Those with significant means are spending money on projects they want. Businesses are squeezing every dollar on base contracts but then doing more enhancement work that they heretofore have put off.

  2. Philip Germann Reply

    I think the greatest challenge will be rising material costs-fuel, steel, etc. This will drive our cost of doing business up, while we will not be able to pass these costs on to our customers due to market deflation. This has been our biggest challenge the last year or so, and “selling value” is working with much less efficiency. In other words, the customer base that would historically pay more for a better service is becoming non-existant. We could cut wages, especially on new hires, but this can be very demoralizing. We are reducing quality in areas we can to lower our costs-many times the new “lower quality” still meets the customers expectations. They simply do not need perfection like they used to demand. I would appreciate feedback on what areas other contractors are dialing back quality, and seeing the least negative feedback. (Less lawn care applications, less frequent mowing, every other year mulch???)

  3. Keith Upham Reply

    I believe that the consumer will continue to loosen their purse strings throughout 2011, while businesses will continue to cut costs any way they can. That being said it will be the professional company that will again move to the front of the pack, as there will be reduced emphasis on price alone. Owners will still need to look for ways to reduce costs, increase efficiency, and seek out the best team members (it’s still an employers market, and will be for some time). Concerns I have would be continued mortgage defaults, job recovery and (even beyond 2011) the rising cost of oil. I strongly believe that rising energy costs will be the next great challenge our economy will face in the coming years.

  4. Randal Wise, CLP Reply

    I think Keith has a good read on the situation and what we see here as well. Our fall projects were and continue to be the best part of our 2010 season and 2011 winter. Those who have disposable income have held it for several years and are not willing to part with it do improve their properties.

    Our area of the country (OK) has not been hit as hard as some but our state will have to cut at least 15-20% from this years budget since stimulus $’s kept the legislature from cutting in 2010.

    For the initiated, there is work to be had.

  5. Ryan Palm Reply

    I think “cautiously optimistic” is how I would also describe our outlook for 2011. Winter chatter among clients has been better over the winter and our local economy continues to improve. Local housing starts are up again, but they are the mid-range, not the McMansions we saw 3-4 years ago. White collar businesses are seeing their incentive bonuses return in 2011, which is a direct link to our success. We are attempting to diversify our services for the first time to try and grab some maintenance market share and improve cash flow.

  6. Marty Grunder Reply

    Great thoughts…..gas prices will hurt for sure. That daily….if not weekly reminder of things costing more will not help. This would make for a good discussion at GROW! 2011.

  7. Bob Kinnucan Reply

    I am totally uncertain as to what kind of economy we will experience in 2011. I am planning for two scenarios; one, a rising economy with inflating costs of fuel, commodities, equipment, and ultimately labor and two, an economy that turns down, perhaps severly caused by a collapse of the US Dollar and US Treasury Bond Market as well as collapse of the State/Municiple debt markets.

    The U.S. Treassury has increased the Money Supply(M1) by by 9.7% over the past year. The US economy is stuck in the Liquidity Trap currently and the overly restrictive lending standards required by the federal government on banks. This condition as well as international demand for commodities is creating the probability of inflation if not hyper inflation. I remember well the mid-seventies and the results of misguided fed policy had on the aggregate economy. One would be well advised to plan for such a scenario repeating itself again especially if aggregate domestic demand increases as the Fed is currently encouraging with its current “QE2 Program” of artificially depressing interest rates to create 2% inflation rate. This is the greatest Ponzi Scheme of the Twenty-First Century and may cause the collapse of the dollar as well as the collapse of the governmaent debt market. Companies that have been reducing prices over the past few years to buy work may find that strategy suicidal if the economy goes into hyper inflation. Customers will try to reject price increases, companies may be unable to increase prices to maintain profits as input costs esculate forcing companies out of business ironically in a “improving economy”.

    Ths second situation is quite dire. The end of the 2008 Stimulus Funding is occurring this year. The public sector of the economy was one of the major beneficiaries of that program. State and local governments are now going to have to face economic reality of declining property property values, declining sales taxes, declining federal revenue, etc.. If a collapse of the dollar occurs, the federal/state/local debt market collapse occurs, business planning for the next two years could be very challenging. There may be major demand shifts for the services green companies offer.

    There are some forecasters predicting the US GDP will grow 4% this year. Oil $120 to $140/barrel, gasoline $3.50 to $4.00/gal., rising food costs. Under this scenario, raising prices is a necessity to maintain profitability. Recommend be very careful about reducing prices despite present conditions. Inflation could rise dramaatically if the US GDP goes to 4%.

    Recommend companies prepare a survival finacial strategy should the US experience major debt crises such has happened in some foriegn countries, primarily in Western Europe.

    Lets plan and be prepared, hoping for the best.

  8. Marty Grunder Reply

    Bob, well done. I’m a fan of your’s. My wife is from your area and I am up there all the time. I respect what you have created and your legacy. I feel honored you chimed in here. Thank you.

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