Starting a Landscape Business
Introduction to the landscape business
Landscaping is one of the most popular service businesses around, and there is a good reason for this too. Landscaping continues to be a business that provides a sustainable and relatively straightforward path to growth. ‘Landscaping’ itself covers a broad range of different tasks and bringing them together can yield substantial profits. It is a business that requires relatively small startup costs and less specialist knowledge than other businesses. The initial investment can often be enough to sustain a business for a number of years. Not everyone can enter this business, but it is possible for most people to become well equipped with the specific nuances and requirements of this business in a relatively short period. The seasonal nature of the work can make this a viable business for
those who have summers off. This guide will explain the basics of the landscaping business, ways to get in, and the different types of landscaping roles that exist. It will serve as a beginner-friendly guide that is both informative and useful.
Why Should I Enter the landscape Business?
There are various benefits and reasons why someone should enter this business. We will list some of the most popular reasons for entering and what makes them such big motivators to enter this field.
A landscaping service business can often provide the owner with more flexibility and freedom when compared to other businesses and full-time roles. The owner can devote as much time or as little time as they want to the business. The job can also be more local when compared to other roles, which can drastically shorten the amount of time spent commuting to work. A service can set their hours to work, which gives a huge amount of flexibility and allows the owner to dictate free time.
An owner who works in this business can also benefit from physical activity and an opportunity to regularly enjoy the outdoors. This can make a great change from an office lifestyle, where these opportunities are far more limited. This business is perfect for those who want to be kept on their feet regularly and interact with nature.
Earning Potential of a landscape business
Like all businesses, the range of earnings can differ widely depending on the location and type of service being provided. However, the earning potential is relatively high for landscaping services. Individual lawn care professionals can expect to make up to $45k in the first year of operation, which can rise to $130k after a few years in the business. Owners of companies that offer substantial landscaping services can expect to reach the $200k after a few years of establishing themselves. It is important to treat these figures with a grain of salt, as the market can vary hugely.
But, it is a market that is here to stay and it will remain lucrative for the companies that can continually provide superior service. These figures should motivate you to start, but they shouldn’t serve as specific goals. The earn- ing potential of your own landscaping services business will depend on your initial investment, level of expertise, and space for growth. The sky does become the limit once you become established, as it becomes easier to land more lucrative long term contracts. This is a business, like many others, requires strong determination in the initial phases to secure the desired financial rewards of the future.
Required Investments & Skill set for a landscape business
There are essential investments required to start a landscaping services business of any kind. Many will be able to fund these themselves from their savings. However, others will look to credit cards or bank loans to provide these funds. The initial investment costs of a landscaping services business are comparatively lower than other similar businesses. The majority of the costs are usually limited to the tools needed for the job. Once these have been purchased, they can often last for a number of years. However, it is important to remember that you are wholly liable for the equipment to work in an effective manner.
There is a specific skill set required for this job and it is not enough to have basic skills at lawn mowing. The owner or their workers will need to be highly skilled at the landscaping services they provide. The market can be competitive, and therefore it is crucial to be able to deliver superior service. This requires being in excellent physical shape as the work can be very demanding. It can include heavy lifting and using heavy tools for a prolonged period. There will need to be a time investment spent for the owner or employee to get sufficient expertise in the services they aim to provide.
They will learn specific techniques and obtain expertise in being able to complete jobs efficiently and effectively. Safety is also paramount, which means it is crucial to be knowledgeable about the safety standards of various tools and chemicals. The quality of work is a very important factor in this business, as most clients will expect a high standard of work.
As with all businesses, there is a requirement of extreme dedication and discipline at all times. The freedom and flexibility afforded by this specific business means it can be easy to ignore the need to obtain more clients. Not everyone has the mindset to keep their focus on consistently providing high quality for their clients and seizing opportunities for growth in the business. There also needs to be a feasible business plan in place. The nature of landscaping means there will be busier months and quieter months. Depending on the specific type of landscaping you choose, it can become a very seasonal occupation. Coping with seasonality requires thought on how to man- age the busy periods and deal with the calmer periods. A well thought out plan can help to mitigate these circumstances. Landscaping is an industry where long term planning is essential to success.
As with all businesses, there needs to be a thorough method of managing payment and cash flow. Advertising and marketing are also crucial in any new business, but in this case, it can make or break your business. The majority of the advertising can focus on the local market and this requires highly targeted campaigns that spread the word in an efficient and focused manner.
What does Landscaping Cover?
Landscaping encompasses a wide variety of tasks. One of the key decisions for a landscaping services business will be deciding which particular services will be covered. The advantages of covering a wide range of services are that it will allow you to upsell to customers and reach a bigger demographic. Whereas, the advantage of narrowing down your services is that, it will enable to specialize and build a more targeted niche.
Many people will already have had some experience in regards to landscaping. The mowing of lawns is a common part-time job for a teenager to have and it can often serve as a decent boost of extra cash. For many people, this early experience can be the motivating factor that leads them to pursue a landscaping services business. The satisfaction of a job well done is seen in a homeowner’s face. The joy of providing real value to the neighborhood can be an important factor in seeking to start a landscaping services business.
Lawn Mowing Maintenance
One of the most fundamental roles in this field involves focusing on lawn mowing as the only service offered. Lawn mowing and maintenance continues to have a steady demand. Lawn mowing is one of the most straightforward aspects of the field to begin working in, as it requires a limited amount of expertise and low initial startup costs. The downside of this field is that it can become challenging to upsize, and it can require a more considerable amount of regular clients to remain sustainable. The job role requires a few mowers, some trimmers, and petrol cans.
If you have a small amount of capital; then these can be enough to sustain your business in the short term, and more equipment can be bought as it expands. A vehicle will also be paramount for the role; however it can generally be of a smaller size than other positions within the business. The maintenance aspect will require tools for providing effective lawn care. The use of these tools will require expertise in various fertilizers and knowing how to apply different treatments to different types of lawns. The benefit of this type of business is that it is easy to scale from basic lawn mowing to providing more specialist landscaping services.
Landscape care is a role that requires more investment in time and equipment. However, it is also one that allows a business more growth opportunities in the long term. Landscaping usually covers lawns and lawn maintenance, but it goes beyond this to include a more extensive variety of outdoor elements. These elements can consist of weed trimming, hedge trimming, managing shrubs and trees, leaf removal, and general garden maintenance. The tools required for a landscape care company will depend on which specific aspects they aim to focus on.
One of the most important requirements will be a sturdy and large vehicle which can accommodate the equipment required for the role. A locking toolbox is another crucial piece of equipment to obtain. Small businesses can usually store their equipment in a garage; however larger ones will find it more efficient to invest in a storage facility that can manage all the supplies. Trimmers, edgers, and blowers will be essentials for most landscape care roles.
Digging, cutting, grading, measuring, and marking tools will also be necessities depending on the type of specific role you go for. Basic carpentry tools can come in handy for many landscape care jobs. A general budget of around 4−6 should suffice for most new landscape care businesses. This budget will only cover the cost of essential tools and equipment. The specialist stuff can end up totaling longer.
If landscape maintenance doesn’t interest you, landscape design can be the perfect role to unleash your creative spark. Landscape design is a position that will still re- quire some maintenance in a similar vein to the above roles; however, the key difference is that landscape de- sign involves designing and creating entire landscapes. Landscape design can include virtually any aspect of the outdoors part of a home. It involves planning a feasible project, and then implementing this is in an effective manner to make it a reality. Ideally, an owner will already have experience with the latest design software. They may additionally get involved in the physical aspect too, or leave this entirely with contractors.
One key advantage of landscape design is the availability of potential high earning contracts that operate on a long term basis. A landscape design firm can start as a one-man business, before eventually developing with growth. A bachelor’s degree in landscape architecture can be highly useful for this role. Startup costs will go towards the equipment, which will include a high-end computer capable of dealing with the latest design software. Landscape design can be highly lucrative, but it is a role that is heavily oriented towards those with high reputations. It can prove to be more difficult at entry when compared to the above services; however, it can also provide the highest long term earning potential.
Managing the Seasonal Aspect of the landscape business
Landscaping is undoubtedly a heavily seasonal profession. However, that doesn’t necessarily mean you will be forced to wind down your business during the quieter periods. It does mean that there is a necessity to actively manage and plan for active periods and less busy periods. The climate situation of your city will play a major role in influencing which periods are more active than others. Therefore, it is critical to research the industry in your region and become knowledgeable with the yearly climate.
In general, April to October will be the busiest months of your service. These months cover spring and summer to early autumn. The best time to market your services is during the early spring months as this will allow you to manage clients during the peak summer months. Fall and winter will come with a dip, and the incidence of this dip can depend on whether there are any extreme temperatures. An unusually cool fall can result in an extremely quiet season, and a warmer than usual winter may result in some extra demand for landscaping. The quiet months can be used as an opportunity to pursue other goals and review your business plan by gearing it up for spring.
Additionally, you can use the equipment at your disposal to offer alternative services that are suited for the cooler temperatures. In the autumn this can include raking leaves and in the colder winter months, it could involve snow plowing. It is critical to prepare for the months with low activity, as they will strain your budget. However, if you plan accordingly, you can ensure that your business is kept sustainable, and ready to go for the following peak season. A landscaping service based solely upon lawn mowing and lawn care will be affected by the seasons far more than a diverse landscaping services business where specialist services can be in demand all year round.
Residential or Commercial landscape business?
If all that wasn’t enough to put you off, then your second consideration will be whether to focus your landscaping services business on a residential or commercial level. It is possible to target both of these demographics; however, it is usually better to focus on one of them due to their inherent differences. Each of them has their own specific benefits and risks to take into account.
One key difference will be the notion of contracts. The majority of residential agreements will not require lengthy contracts and simple handshake agreements can be all that is needed for smaller projects. We do recommend having documents ready for both residential and commercial projects. However, a key difference between the two is that commercial projects will require lengthy contracts that cover all aspects.
Commercial clients will also require larger amounts of liability in insurance. This can typically be a figure of up to $2 million. Residential clients typically require won’t have a specific figure in mind, and coverage of up to $400k is often suitable. Commercial clients can usually afford a monthly rate of maintenance, whereas residential clients will often pay in a few lump sums. The prospect of long term work is more likely to be gained from commercial clients. Targeting commercial clients can create a more steady cash flow.
The specific profit margins from these clients may be lower but are offset by the regular nature of the work involved, which provides higher total prof- its in the long term. Residential clients are more likely to refer you to their friends, whereas commercial clients are usually wary of passing along your information to competitors. Communicating is easier with residential clients since you are usually in direct contact with the homeowner. Dealing with commercial clients usually involves dealing with a staff member who is responsible for communicating the needs of the owners. There can be mistakes made in miscommunications, and badly get- ting across the wants of the owners can cause a difficult working situation.
It is evident that greater long term rewards can be reaped through targeting commercial clients; however, it comes with extra responsibilities that suit larger businesses. Smaller landscaping startups should be more inclined to focus on residential work whilst they grow.
The Basics of Business Operations of a landscape business
Regardless of which type of landscaping business you choose to start, there will be common business operations for you to consider. It isn’t a requirement to be highly business savvy, but a working knowledge of these operations will be essential in order to succeed.
Estimating in the landscape business
One of the most important operations will be the estimations. Clients will want an upfront figure about how much a job is expected to cost. There is generally an assumption that these estimates are to be taken as a guide, and that the final price may differ due to a range of factors. However, these initial estimates are key in ascertaining time and re- sources to a specific job. Estimation is a skill itself that has to be developed. Your estimate should include all of the relevant costs such as materials, labor and any equipment that is being rented for the job. This figure should also include the total profit you intend to take from the job. It should include the exact services that are being offered to the client. In general, it is expected of landscaping services to provide a free and no obligations quote before starting on any work.
General Administration in the landscape business
All businesses require some form of administration, and landscaping is one where admin plays a key role due to the importance of maintaining relationships with clients. Administration includes answering phone calls and responding to emails. It also means processing payments and managing the financial aspect of the business in general. This can be time-consuming for larger companies, why is why they usually hire an administrative professional to respond to customers and to keep track of all the books. They are usually competent enough to handle basic accounting too, although larger companies may want to hire an in-house accountant for this role.
Purchasing Tools for a landscape business
The landscaping business requires the purchasing of some equipment which can last for a few years; however, there will be other constant supplies needed to maintain the running of the business. These can include general office supplies and specialist supplies such as fertilizer or petrol oil depending on the type of services you include. Bulk purchases need to be managed, and everything must be recorded on the account. A purchasing plan can help you to plan ahead for upcoming jobs.
Managing Circumstances in the landscape business
Every business should be run in a way that allows it to cope with extreme circumstances. Landscaping is a business that can be heavily affected by extreme changes in weather. These aren’t always predictable, and they can therefore provide a huge shock to the running of your business. It is critical to prepare for all eventualities, and ensure that relationships with clients are kept healthy even in extreme situations. One step to plan for unforeseen circumstances is by overestimating the time it will take to complete a project. Allowing a small increase in estimation can give you some breathing room to accommodate any unusual or unexpected events that make the job last a bit longer than it should. A cold patch can provide an excellent chance to catch up with your office administration and financial duties. In business as in life, you should always be ready to face the unexpected. Landscaping is a profession filled with excitement and a range of uncertainties that are constantly ready to come out and test your business. The management of every eventuality is what separates a casual company from a professional one.
Landscape Business Industry Outlook 2019
The industry is very healthy and highly feasible long term. The demand remains stable for many landscaping services, and this a substantial number of professionals and services are meeting this demand by entering the industry every month. These new startups include massive corporate chains as well as small individual operations. Demand from both residential and nonresidential clients has in- creased as markets have stabilized. It is difficult to obtain an accurate number of active businesses in the field, due to the high incidence of ‘informal cash in hand services’ which is missing from general statistics. Current estimates show that there are around 10,000 individual lawn care service providers and approximately 12,000 landscapers in the United States.
These figures come directly from the National Association of Landscape professionals. An- other important statistic is the roughly 1 in 4 Landscaping services are run by self-employed professionals and 1 in 6 work part-time. This statistic reveals how prevalent a direct relationship with the owner and the client is. The market for these services continues to grow every year and landscaping services alone contribute $35.6 million through the value they provide on an annual basis according to a report from the Professional Landcare Network.
The growth of this sector continues to be led by a significant demographic. The aging population is made up of affluent homeowners who value the gardens in their homes. These are the people who have considerable cash reserves to spend on general maintenance around their house. Some of these older people will be retirees who are out of work, and therefore have an increased focus on improving their homes. This demographic is a crucial retainer, as they tend to prefer relationships with individuals rather than obtaining the services of larger corporations.
They know the value of a high-quality landscaping job, and many are prepared to pay a premium to achieve their desired lawn. Many don’t have the physical capabilities anymore to conduct the strenuous activities, but they re- main highly passionate about their yards. They take pride in their entire home, which includes the garden. This sense of pride is why they place a high emphasis on maintaining their homes to a high standard.
Key Targets for Landscaping:
Older aged people aren’t the only demographic that has a high requirement for landscaping services. There are a number of key demographic groups worth keeping an attentive eye on.
• General homeowners – It is not just older homeowners who need landscaping services. The younger crowd of new homeowners can also require significant landscaping work. This demographic usually consists of professionals who have hectic work lives. They may also not have the skills or the expertise to man- age their own landscaping needs. Unlike the boomers, this demographic will often not have a clear vision set out. They will require the service to set out a vision for them, and complete it an efficient manner. New homeowners are also an important demographic as they may wish to change the existing landscaping to match their standards and vision better. Homeowners who are frequently out on business can also be valuable long term customers.
• Home Sellers – Another important demo- graphic for landscaping are homeowners who are looking to sell their homes. One of the best ways to increase the value of a home is through providing a fresh touch on the landscaping. Homeowners looking to sell their homes will be eager for a service that can provide a high-quality service, which makes a noticeable difference in the valuation of their homes.
• Builders – Not all builders will have access to dedicated staff to provide landscaping services. They often reach out to local professionals to handle the landscaping aspect of the job. They can provide substantial long term work as they will demand a rigorous effort for the new property.
Finding Employees for a landscape business
Many people start landscaping services as individuals. However, it is a fairly tough job that requires significant physical exertion. It can make more sense to take a more 29 41
management based role that is still hands-on or leave the work entirely to employees. The trouble is that finding reliable help can be a bit of a hurdle. Landscaping is an industry that typically has low levels of entry, and low levels of worker retention. The type of worker that you can recruit will largely depend on the budget you have available. You can expect lower paid workers to be less professional experienced, and more inclined to leave after a shorter period.
Whereas, a higher pricing structure will usually allow you to hire specialists who will be more inclined to remain in your company. There is a tradeoff between the price you pay for employees and the budget you have left to spend on advertising. As a general guide, we suggest paying workers slightly above minimum wage for basic roles and researching common salaries for more specialist roles. A dollar or two higher can make a big difference for retaining long term employees, which is something to keep in mind when considering the salary strategy for hiring.
Green Practices in a landscape business
One significant trend in 2019 is the adoption of green practices. Homeowners and commercial clients alike are beginning to become far more aware of the importance of utilizing green methods. There is a higher level of gen- eral awareness for green practices, and an appreciation of services that incorporate some of these into their services. Therefore, a key point of differentiation can be to implement sustainable green practices within your business. In city markets, this can prove to be pivotal. A lawn oriented business can look towards providing organic soil, and even going as far as to providing full organic lawn treatment programs.
The equipment is also important, and a green practice can involve investing in more battery equipment. Being environmentally conscious must be combined with a realistic and efficient approach. It will not be feasible for a new business to go entirely green, but some effort towards becoming knowledgeable about green practices can set up the company for the long term future, where the notion of environmentally conscious practices will only continue to grow in this industry.
The Allure of Franchising in the landscape business
There are many franchising opportunities available in this sector, and it can be tempting to start with an existing franchise due to its reputation and prestige. The decision to start independent or to start through an existing landscaping franchise is an important one. Franchises increase the startup costs substantially, but they do offer a clear path to fast growth. Alongside purchase costs, there is also an annual cost and portion of earnings that goes to the franchise. An established brand name helps tremendously with early growth; however, this growth comes at the cost of the various expenses and fees associated with franchising.
Many landscaping business owners take pride in their company and assign their mottos to it. Franchises remove the individuality aspect from the landscaping services business. However, they also remove some of the stresses of running a business. The technical aspects of the business such as cold calling clients, managing finances, creating estimates, and job scheduling becomes comparatively easier. Ultimately, franchising should be a consideration if the costs are not a burden, and the owner wants a more hands-off approach when compared to starting fresh with an independent landscaping service business.
Landing Your First Landscaping Clients
Marketing is becoming ever more crucial in this industry. All types of landscaping businesses require some mar- keting plan in place. It is critical to allocate a reasonable advertising budget to allow your business to gain a footing in the competitive market space. Social media advertising can bring dividends. Advertising can come in the form of Facebook and Instagram ad campaigns. It is also essential to utilize local Google listings as registering your business can bring significant targeted traffic to your brand. You can do this by visiting “Google My Business.”
It is critical to add your business to all of the major local listings websites such as Yelp and Yellow Pages. Classic methods such as offline flyer campaigns can also serve as valuable marketing tools. Business cards are also important, and you can have these made in substantial quantities for minimal costs by taking advantage of the numerous online services available. In this evolving marketplace, it is key to have a differentiated marketing strategy that can reach the various segments of the target demographic.
It is important to maintain consistent marketing efforts as clients can quickly dry up. One easy way to maintain a brand presence is by decorating your van or vehicle with a clear logo and summary of your services. The name of your company and telephone number should be visible as this will allow customers to contact you easily. They may see you working on another project and can be impressed enough to contact your company. Branding is a vital aspect of any landscaping services business, and your brand image should be visible wherever it can be.
Another way to build up a client base is through a simple referral system. You can give customers incentives for telling their family and friends about your service. An incentive such as a 10% discount for the existing and new customer can be enough for a referral scheme to be successful in bringing you, new clients.
Chapter 9 Legal Steps creating a landscape business
All businesses require crucial legal steps for formal registration. In this industry, it can be tempting to start in a casual manner and handle clients purely through cash transactions. However, it is generally advisable to start your business on a solid legal footing as this can avoid future problems, and can optimally set up a company for the foreseeable future.
Landscaping Service Business Plan
A solid business plan is a crucial initial requirement. Any plan should include detailed figures for initial startup costs, running costs, and a realistic break-even target. It should also include information on the target demographic of the business.
The next step is to form an official legal entity. The creation of an entity is critical, in case a client attempts to sue, as it prevents personal liability.
Registering for taxes upon creating the business will save you many future headaches. You should be fully aware of both state and federal taxes. A business advisor can help you plan your tax structure.
Dedicated business bank account
Although it is not essential, we highly recommend opening a business bank account that is used solely for the company. As well as keeping your finances organized, it can make the company come across more professionally to clients. Cash flow management is critical in this industry, and the careful management of funds during the quieter periods will be a huge determining factor of your eventual success.
Accounting for a landscape business
It is crucial to keep accurate accounts that cover all expenses and incomes of the business. A smaller startup can usually handle this themselves through the use of soft- ware, whereas larger companies may require dedicated accountants. It is essential to consider the specific permits and licenses for operating in your state and city. These can vary wildly depending on location, so it is vital to research these to ensure that your business can function entirely legally. The local city government will have information on which licenses and permits you will be required to have for legal operation. The consequence of not obtaining these can be hefty fines and possibly even the termination of your business.
Insurance for a landscape business
All business owners should have insurance. You should purchase insurance that provides coverage for yourself, your equipment and your clients. This expense can save you a substantial amount in the case of an extreme event. Protecting damages is essential for ensuring that your company is sustainable.
It is essential to decide upon a key motto that will come to define your brand. The perception of your brand will be critical in whether it is ultimately successful. It is key to establishing a web presence as offline marketing will not be enough in 2019. A flashy website and active social media can help to spread awareness of your brand. A tech-savvy owner can usually manage this themselves; however, the management of an online presence can easily be outsourced to those who would instead focus on the operations of the business itself.
It is critical to understand your location and target demographic. A baseline hourly rate should be set both for yourself and any employees you hire. Landscape services can vary wildly in what they charge. It is crucial to con- duct competitor research, and identify local services which provide similar services to the ones you intend to include in your business. It is critical to understand the type of neighborhoods you will cover, and the general makeup of these areas. Your pricing will depend on the services that you offer, and what your demographic is willing to pay.
It is essential to keep in mind that reputable companies in this sector can command far higher fees due to their reputation. In the early stages of your business, creating brand awareness through word of mouth and referrals should be prioritized over profit. A competitive pricing structure can help massively in establishing your presence. The costs of running your business should also play a role in your initial pricing structure.
Your profit margin should be kept lower in the initial phases of your business. There are many ways to set an initial pricing structure, and they are all valid so long as they cover all personal and business expenses, as well as leaving some leftover for further investment in the company.
This should serve as a basic guide to being able to start your very own landscaping services business. It is an industry that encompasses a wide variety of roles and services; which makes finding an area to focus on a relatively easy task. The service is one that will retain high demand for high-quality work. The competition is fierce; however, the opportunity for substantial profits exists if there is a long term strategy that focuses on delivering exceptional work and building up the awareness and reputation of the brand. Combing this strategy with an effective pricing structure can lead to a highly sustainable business that can continue to grow. We hope this guide acts as the motivation for you to research further and eventually start your own landscaping service business.