April 1, 2018
Lee Ann Knudsen
Lee Ann Knudsen

If the green industry turns over at a high rate...

How high is it?

Facts are one thing, numbers are another.

Everybody knows the green industry has a high turnover rate. Everybody knows the reasons. A low entry barrier attracts lots of would-be entrepreneurs. Hiring is difficult. At retirement time, many operators find selling their companies a challenge, and liquidate instead. But I have never seen the green industry turnover rate quantified.

Well, we had an idea to get a real number for company attrition. Landscape Trades is in a unique position, since our subscriber list is the most current and accurate green industry list in Canada. Since advertising pays the bills, our distribution is upgraded constantly, and significant cash is required to do that job. We even get charged $1.50 by Canada Post for each non-deliverable magazine, on top of original postage. So you can be sure our list is not padded with old names.

Careful vetting adds to the circulation list’s value. We have hard documentation showing every LT subscriber is a bona fide industry participant. In magazine industry terms, LT’s circulation is “100 per cent qualified.” Every copy is addressed to an individual’s name, plus his or her company name.
The high number of unique companies on our list is interesting, supporting the small-business nature of the landscape business. Larger companies with several manager-decision makers may receive individually addressed copies, but the typical subscriber is a company owner. Currently, our total circulation of 8,666 is comprised of 7,998 unique companies.

SO, WE DECIDED to do a list management exercise, and compare all current subscriber companies (not individuals) with the companies on the subscriber list in 2008.

Beforehand, I guessed the attrition rate would be over 50 per cent. In fact, the company turnover rate over the past decade, based on Landscape Trades circulation, is 69 per cent. Only 2,058 of the company names on the 2008 subscriber list, or 31 per cent, are still active.

Out of curiosity, we did the same exercise for Landscape Ontario magazine, the association publication for Landscape Ontario Horticultural Trades Association. The attrition rate since 2008 came out almost exactly the same, at 68 per cent.  

DISHEARTENING? Yes and no. After all, there is real value in quantifying a fact that is already known, even if that value looks high. Knowing the attrition percentage may help new companies understand the odds to be faced. It also could help show that the common shovel-and-pickup business model might not be sustainable.

Another conclusion relates to the Landscape Trades mission — to help readers prosper in business. We need to continue helping new entrepreneurs with tools and confidence, such as marketing and efficiency strategies. Plus, the challenge to help business owners craft workable succession plans never goes away.

Looked at a different way, 31 per cent of our subscriber companies have at least 10 years in business. That is a significant amount of history and expertise — one might call it industry equity. It just makes us wish for sales figures. That 31-per-cent segment could easily generate two-thirds of all landscape revenues, or more. At a guess!

Another positive way to look at the 69 per cent figure: The green trades offer plenty of opportunity for energetic new blood.