Every January, we make predictions for the coming year of key industry trends and merger & acquisition activity in the green industry for the coming year.  ReportCardWhile we are working feverishly to prepare our predictions for 2013, we thought it would be a good idea to give ourselves a report card on how we did in 2012.  Here are our 2012 predictions with our self-grade on how we did:

  • The political climate will contribute to some uncertainty in the marketplace, but as the economy continues to strengthen, the level of merger & acquisition activity will continue to increase.  GRADE:  Mostly correct, but uncertainty has been higher than expected contributing to a lower level of M&A activity than expected.
  • No matter which party controls the White House and Congress after the elections, the outlook for small business will improve.  Both parties will see strengthening small business as an important part of strengthening the overall economy. GRADE:  Somewhat correct. Both parties talk about strengthening small business, but action is pretty weak.
  • Immigration policy will continue to be a hot potato issue affecting the industry.  GRADE:  Correct, but… Immigration policy continues as a hot-button issue for the industry with PLANET legal efforts helping to stall mid-year changes in H2B.  The economy and political turmoil has kept it off the front-burner.
  • Future tax policy for capital gains and estate taxes will be uncertain, leaving exit planning a confusing process for many.  GRADE:  Absolutely correct.  How do you spell “Fiscal Cliff” drama?
  • Major industry players will be moderately aggressive in seeking strategic acquisitions to strengthen their. Grade:  Wrong.  Major industry players have been largely quiet on the M&A front.
  • Price competition will continue to negatively impact the profitability of the industry.  GRADE:  Correct.
  • Progressive companies will look for acquisitions that strengthen their competitive advantage.  GRADE: Mostly correct, but there haven’t been as many “progressive companies as we had expected.
  • Landscape companies will look for acquisitions that expand their markets, including outdoor living products, other exterior maintenance services, swimming pool construction and maintenance, fencing, lighting and similar services.  GRADE:  Correct, there is a high level of interest in market-expanding acquisitions.
  • Franchising and similar programs will continue the growth they experienced in 2011.    Independent operators will continue to see value in being able to access to marketing and operational support and reduce risks.  GRADE:  CorrectFranchisors had a banner year.
  • Financing will more accessible for acquisitions, but will continue to be a challenge for some potential buyers.  GRADE:  Correct.  Acquisition financing is available, but banks are still squirrelly.
  • Buyers will continue to be very disciplined in their approach to acquisitions, partly in response to the requirements of their financing sources.  The days of easy transactions at high multiples are over for the foreseeable future. GRADE:  Correct.  Couldn’t be more true.
  • Valuations will remain soft and will not return to pre-recession levels anytime soon.  The best opportunities can command premium valuations, but this will be rare.  GRADE:  Correct.
    • Sustainability will continue to be in the forefront.  Organic lawn care and water-efficient landscaping will command premiums.  GRADE:  Correct, but… The trend is evident, but economic concerns have made things move more slowly than expected.

OVERALL GRADE:  85%.  Not too bad considering the biggest issue we face is uncertainty!  Our predictions for 2013 will be out by mid-month.

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2 Responses to Report Card on 2012 Predictions

  1. […] More here: Report Card on 2012 Predictions | Sell My Green Business – News … […]

  2. […] a report card on how we did with last year’s predictions, click here.  We are pretty proud of […]

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