Written by Gene Caballero on June 30, 2016
Here are a few more resources on how to start your business. Here is a link to learn more about my book on how to start a business which is based on research of experiences of 300,000 entrepreneurs. Here is the link to my video-based course on how to start a business with over 5 hours of tutorials. The link to the course contains a coupon code for a very big discount.
This article is based on an interview with Bryan Clayton who successfully grew a lawn care business to over $5,000,000 in revenue and sold it. Bryan is currently working on a company called Your Green Pal which is his project after selling the landscaping business. Here is the interview. I hope it is enjoyable and educational.
Location is critical. Logistically speaking, you will need to be in close proximity to your clientele to cut fuel costs and labor costs associated with ride time. An ideal location for a landscaping or lawn care company would be in a warehouse/industrial part of town with close access to the interstate.
Location is also important when it comes to your marketing. Since you will be marketing the business as a local service. Here is our tutorial for how to promote a local service business.
One of the main advantages of a gardening, lawn care or landscaping company is the relative low startup costs. Ideally, you will be able to afford a commercial-grade lawn mower (approximately $8,000), a truck ($5,000 or more), a trailer ($1,000) and a few other, smaller costs for additional equipment ($1,000). Total equipment costs to get started would be the $15,000 range. However, you could get started with less capital with used equipment, but that savings will be paid back with ongoing repairs down the road.
Additional startup costs would be insurance and initial marketing such as flyers and other marketing strategies.
To get started with only mowing lawns you will not need a permit in most municipalities. However, you will most likely need a business license that all business should have.
As you grow your business, you may offer herbicide applications such as RoundUp to spray for weeds in your customers’ landscaping beds. In most states you will need an additional license for that.
If you stay small, say around 50 customers a week, you will be able to control costs to a manageable and predicable level. However, as you scale your business and begin hiring workers to help you with the work load, costs will escalate. You will need to consider factors such as rising minimum wage issues, payroll taxes, healthcare taxes, and workman’s comp insurance. You will also need to spend on administration and bookkeeping of all of these costs because they can add up to more than most people realize. Probably the most burdensome aspect of running a labor intensive landscaping or lawn care company is the rising cost of labor and everything that goes with it.
Whether you are cutting grass in Lebanon, Tennessee or landscaping in Marietta, Georgia, doing the work is the easy part. Getting and obtaining the customers is the hard part. In the early days, I recommend handing out as many flyers as possible. You should be able to acquire at least 1 new customer for every 1,000 flyers you pass out. It is a cheap and effective way to grind it out and get new customers. Focus on density with your flyers, passing them out in a tight geographical area. This way you won’t be driving all over town when you start getting clients. Once you start getting initial customers I recommend treating them like gold, as referrals will be your most valuable method of getting new business. As you grow your business, I recommend investing in basic online marketing. Here is our tutorial on how to promote your business with flyers.
When you are first getting started, you will be working long hours. You should work a minimum of 70 hours per week. This is in large part because you have to hustle to get clients and serve your existing customers at the same time. Once you grow your portfolio of clients you can then cut back to a manageable 50 hours a week.
Hiring employees is the biggest obstacle to growing a landscaping business. The work is hard and grueling. Finding reliable labor is challenging and costly. When you do get helpers, treat them with respect, pay them well, and have their best interests at heart. This is best way to get and keep good help. If you really care about them, they will care about your business and your customers.
To monitor your employees, check on their work routinely. However, mainly try to hire people that just love making a lawn look beautiful. Get the right people on board. If they are the wrong people cut them, it’s not fair to the right people.
One of the desirable aspects of a landscaping or gardening company is that there is very little inventory to deal with. You care not selling a product. You are selling labor and man hours. You will need some supplies, however, inventory management can be handled by hand counts in a simple fashion, even at large scale. Only, once my company grew to over $5,000,000 in annual revenue did we need to implement an inventory system consisting of basic spreadsheets.
When your business is small, margins are great as almost everything you do goes into your pocket. However, at scale when revenues are over a million dollars, margins typically tighten up to the 5%-10% range.
Doing enhancements your customers landscapes such as planting additional trees, mulch and flowers are the most profitable aspects of a landscaping operation.
I know of no better way for a hard working individual to make a great living. If you stay small, work hard, and love your customers you can take home 30-100k per year. However, scaling a landscaping company is quite difficult, and not for the faint of heart. Current labor laws are not favorable to labor intensive businesses, and make growth and hiring new people very difficult. In my company we have over 125 employees, we were always dealing with a federal, state, or local labor audit of some kind. Small business work forces are an easy prey for tax authorities to fix their budget shortfalls with fines, taxes, and penalties.
This is a great business for hardworking people who love the outdoors, don’t mind 12 hour days, and want to be in control of their income.
Seasonality is another challenge to this business. Especially when the business is small, revenue will only be flowing 7-9 months out of the year, so you must prepare for that.
The ideal client is one that appreciates the above and beyond service you give them, as opposed to the price shopper that will just go with the cheapest price they can get year in and year out.
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