How To Start a Lawn Care Business

How To Start a Lawn Care Business

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Posted by Brad Smith

November 25, 2019

Tired of working for someone else? Then it’s time to branch out on your own, and we’re here to help.

Lawn care and landscaping is a huge industry with many markets inside of it. While the most common services offered are lawn mowing and general landscape maintenance, other industry-related businesses include landscape lighting, irrigation systems, tree care, landscape and hardscape design. Lawn care services may be oversaturated in your area, but there are plenty of specialty niches or other ways to stand out.

This guide is filled with advice about everything from startup costs to marketing strategy. We’ve also pulled the steps together you’ll need to take to get started into a printable check-off list.

Lawn Care Business Startup Costs and Beginning Finances

One of the best things you can do for your new business is create a financial plan. This includes a system to track your income and expenses, as well as revenue goals. Don’t worry if the plan doesn’t make sense three months from now. You have a starting point to assess, revise, and keep going.

Steps

  1. Assess your supply and equipment inventory

  2. Add up your business expenses

  3. Assess your personal expenses not covered by other income or savings

  4. Estimate your initial monthly revenue

  5. Calculate your break-even point

  6. Set revenue and profit margin goals

  7. Figure out your business credit score

  8. Compare financial options for your startup costs

  9. Write a business plan

Beginning Lawn Care Setup

If you’re looking at starting a lawn care business, check out lawn care specialist Jason Creel’s recommendations for a lawn care setup for beginners which includes a mower, trailer, leaf blower, string trimmer, and edger.

Even with Jason’s practical, used equipment suggestions, you’re still looking at a minimum of $6000 worth of equipment. Part of your financial planning will be looking at whether you should save up for whatever initial equipment you don’t already own, apply for a business startup loan, or look for other funding sources.

There’s no one right option for everyone.

What Do You Need to Start?

Beyond just calculating your business expenses, it can be helpful to assess what revenue you’ll need to turn a profit, as well as what your personal expenses are, and what additional finances you’ll need until you reach your revenue goal.

In our guide to calculating your break-even point, we go over the difference between fixed and variable costs, and how many clients you’ll need before you turn a profit.

Once you’ve calculated your break-even point, you can outline how long it will take to reach this goal. And then, set a revenue goal. Keep in mind what you’ll need for:

  • Your own salary. What do you need to live on?

  • Money to invest back in the business, such as better equipment, more employees, or a bigger marketing budget.

  • Savings.

Have a plan for what to do until you meet your revenue goal. Do you have enough savings or other income coming in?

The Legal Stuff: Lawn Care Business Requirements 

To run your own business, you’ll need to register your business on the federal, state and local levels, including registering for a tax ID. You’ll need this ID to open a business banking account and get insured. If you’re not sure how to register, you can work with a registered agent.

Steps

  1. Make sure you have all the licenses you need 

  2. Incorporate and register your business 

  3. Apply for a tax ID

  4. Open business bank account

  5. Apply for insurance and bonding

  6. Set terms of service

Shopping for Insurance Plans

Some tips to consider when shopping for insurance plans.

Ask The Community

Know other lawn care pros in your state? Ask them which insurance company they work with and how they got a good rate. If you’re new to the industry, check out our list of Facebook groups in the “Where to Go From Here” section at the end of this guide.

Work with a Company that Knows Your Industry

If you’re talking to an insurance broker that doesn’t know your industry, move on. You’ll want to be represented by someone who knows the ins and outs of your specific set of services to make sure you’re adequately covered. Not every service has the same insurance requirements or is covered in a general liability plan. For instance, if you offer snow removal, an article in Turf Magazine warns, “A common mistake is to assume that your landscaping or other core business liability insurance covers losses for snow removal. It’s up to you to make sure that liability policies cover snow removal with many major commercial properties requiring coverage of up to $2 million or more.”

Don’t Forget Workers’ Comp Coverage

Before you hire help, even just a part-time worker, you’ll want to make sure that you’re covered if anything happens to them on the job. Laws around workers’ compensation vary per state, so check out the laws dictating your area.

The Technical Stuff

Especially when you’re starting out, much of your time is going to be spent on job sites, which is why you’ll want to look for technology that is heavily automated. 

Steps

  1. Set up a website and social media profiles

  2. Shop for and invest in tech platforms (see chart)

  3. Create calls-to-action (CTAs) on your website and social media profiles

The Power of Automation

In the beginning stages of your business, you’ll need to focus on getting the job done, then training your crew, and building in-person customer relationships. In other words, you’re going to be outside a lot, not sitting in front of a computer.

As your company matures, you’ll want to hire office managers or assistants to handle the day-to-day tasks so that you can focus on growing your business. 

In both scenarios, the ideal is to set up administrative tasks so that they 1) Run without you as much as possible and 2) Are easy to train someone else to handle.

The secret to doing this is automation. 

HouseCall Pro allows new customers to book online, set recurring jobs with assigned crew members; automatically send invoices when your job is complete and receipts when your customer pays; and and then send your invoices to Quickbooks Online for bookkeeping.

Software like Quickbooks Online can automatically categorize your business expenses. And when your employers track their hours in Gusto, you can set payroll on autopilot.

Software Tools Checklist

Here’s a breakdown of the different kinds of tech platforms you should consider investing in and examples of each.

Tools to ConsiderPurposeExamples Used by Our Pros
Social Media ManagementSchedule and automatically send posts; respond to messages across social media platforms in one place.Hootsuite, Recurpost, eClincher, ZohoSocial
Email Marketing ManagerManage email campaigns.MailChimp, ActiveCampaign
Customer Relationship ManagementTrack customer leads, maintain detailed customer histories.Insightly, amoCRM, Pipedrive, Zoho
Field Service ManagementOnline booking & scheduling, job management, invoicing, and payment processing.Housecall Pro
Payroll and Accounting ManagementManage employee paychecks, expenses, and taxes.Paychex, Gusto, Quickbooks, ADP, Square Payroll

Additional Resources From Our Blog

Choosing Your Market & Target Audience 

When you’re establishing your business, it’s important to understand who you want to do business with and how you plan on standing out. These choices work together to solidify a strong brand.

Steps

  1. Outline your target market and ideal customer

  2. Decide if you want to specialize

  3. Update your brand messaging and service offerings accordingly

What Is Your Target Market?

In an episode of the Home Pro Success podcast with Corey Philip, Jeff Juchnowicz, owner of Terra Garden Solutions, explains how he works with commercial and residential clients and the pros and cons of each. 

Jeff subcontracts with larger lawn care companies to provide pest control and fertilization services for their clients, which are primarily home owner associations. “I found a niche there, where it’s not the most profitable, but … I’m at $150,000 recurring-monthly revenue, and off of that, you can really start to build your company in some different ways.”

Pros and Cons of Residential Vs Commercial

Jeff’s goal is for his business to consist of 50% residential clients (directly serving a homeowner) and 50% commercial clients (such as these lawn care companies). “When you lose a residential, it’s ok. When you lose a commercial — a big 300 or 400 home community — it’s, ‘Sorry, Jessie, I’m going to have to let you go.’ I don’t want to have to be in a position where we weren’t able to keep a contract, and I have to then let a guy go.”

How He Chooses Companies to Work With

Jeff maintains a list of every lawn care and landscaping company in his area. He keeps track of the owner’s name, the company phone and email and, when he can find it, the owner’s cell phone and email address. 

  • He assesses whether he’s ready for a new opportunity. Does he have enough manpower and other resources to handle a new large client?

  • He investigates their reputation. Do they pay their subcontractors? 

Listen to the episode for advice on how to approach business owners, plus much more.

Setting Services and Rates

Once you know who you want to work with and whether you want to specialize, it should be more clear what sorts of services you’d like to offer. In this section, we’ll look at advice on how to add new services and how to price them correctly.

Steps

  1. Create a list of services you’re able to or interested in offering

  2. Create a price list for all of your services

  3. Create a contract template

  4. Write up a terms and conditions document

Adding New Services

In the 2019 LawnSite Network Industry Survey, 32% of lawn care and landscaping professionals planned on offering more services than last year in order to increase the profitability of their business. What are you missing? Check out their list of the most common services offered, as well as opinions about upcoming trends such as landscape lighting.

Poll Your Customers

How do you know what you should add? Our advice is to poll your existing customers. Send an email with a simple question of what other services they’d be interested in. Or, if you have a large enough email list, send a small poll to get real data behind your query.

Combat Seasonality

If you live in a northern climate, then seasonality can be a big issue. Many businesses offer snow removal to stay busy in the winter, but there are other options. For instance, creative pros offer Christmas light hanging and other seasonal decorating services. Once again, it’s always a good idea to ask your customers what they could use help with.

Create Packages

As you grow your services, we recommend putting them together in packages that provide additional value to your customers. These packages tend to provide a number of services at a lower rate than what they’d cost on their own.

When you’re at a potential customer’s place offering an estimate, run them through the list of packages you offer and their cost-saving benefits. Even if they’re not interested in additional services right away, it plants the seed (no pun intended) of what other services you can offer them in the future.

Here are examples of sample packages.

Tree CareSeasonal Lawn CareWeekly Lawn and Landscape Maintenance
New tree selection and panting. Tree pruning, inspection, limb removal, and other tree care needs.Annual or bi-annual lawn aeration, fertilizing, insecticide and fungicide treatments. Bi-annual cleanup.Weekly cutting, edging, and line trimming; weed management; bush trimming and pruning.

How to Price Your Services

In an episode of his video series Lawn Care Life, Jason Creel talks about how he prices his services. While Jason’s advice targets lawn care providers, these tips will work for other businesses in the lawn care and landscaping industry, as well.

1) Start with the average rate in your location

Jason has run a lawn care business in two cities and saw noticeable differences between the two locations. He also saw how prices get driven down by competition. And he doesn’t recommend following the trend. You have to know what the going price is and take it into consideration. Charging too high above it will be a problem. But Jason also advises you to know what your financial needs are for your business.

2) Factor in your expenses and your profit margin goal

“Somebody who has very very little overhead can charge a lesser price than you if you have a lot of overhead and actually make a bigger profit. The whole thing here on pricing is not just to throw a number on a lawn because it sounds right or because that’s everybody else is doing … The end goal here is you have to make a profit,” Jason said.

3) Look at your expenses/profit margin over a longer period of time

He also recommends looking at the end of the year when you know all of your expenses for a year and can figure out what your profit margin was. It can be a guide for the next year whether you need to raise your prices and by how much.

4) Consider other factors that impact your profit margin

Jason explained that things like route density makes a huge difference. For instance, if you were working on three lawns in a neighborhood and then packing up and moving to a different location, and the next year you have six lawns in a neighborhood, you’re going to make a more effective use of your time. 

Jason will offer discounts to customers if they’re able to get their neighbors to sign up for services. With less driving time in between jobs, you can charge less and still increase your profit margin.

“Each year, in theory, your route density should improve, thus cutting down on drive time and wasted employee time and raising your profit margin. So that’s one way you can become more efficient, more profitable without necessarily charging more,” he said.

Watch the rest of the video for more guidelines about setting your prices.

Marketing and Advertising

When it comes to advertising, there’s no one perfect strategy. What works well can vary based on your location, your target customer, specialization, and simply what you’re good at. But before you spend tons of money on advertising, we recommend building up your online presence and in-person networking. These strategies can save you money in the long-run and help you find organic leads.

Steps

  1. Create a marketing plan

  2. Design business cards, car or van wrap, and other marketing materials

  3. Sign up for Google My Business

  4. Claim your business on other lead generation platforms

  5. Optimize your website for search engines (SEO)

  6. Join digital and in-person networking groups

Why Create a Marketing Plan?

A marketing plan doesn’t need to be a detailed, pages-long manifesto. On an episode of the Contractor’s Secret Weapon podcast, David Caroll, owner of Lions Share Maintenance, breaks down why you need a defined marketing strategy.

“The first thing that you have to understand when you’re looking for new leads or new prospects is you have to have a plan. As with anything in life, things are a little bit easier if you have an idea of where you’re going before you start.”

He offers the example of a pro looking to find more work or break into a new neighborhood. Step one is identifying who you are going after (i.e. your ideal customers). “Identify homeowners in a specific zip code and then start looking at the differing ways you can get in front of them. Is it direct mail, is it email, are they searching for you on Google?” Build out your plan accordingly.

David explains that your marketing strategy should be multifaceted: “Hitting customers from every angle, of course within our budget, to make sure that we’re getting multiple touches because, as a business owner who has some room on the calendar, it’s our job to simply put ourselves in front of customers.”

By the way, talking to folks that fit your ideal customer profile is the best way to find out what’s going to work best. Ask them if they search for businesses online. Ask them if they’d prefer a letter or an email from a new business. Ask them what matters most to them from a home service provider: whether it’s cost, efficiency, reputation, etc.

Additional Resources From Our Blog

Hiring

Hiring and retaining quality employees is one of the biggest problems nearly every service industry faces. But it’s also an essential element to growing your business. In this section, we offer a few tips for finding quality hires.

Steps

  1. Assess the numbers (what can you afford?)

  2. Research the legal requirements (federal, state, and local) of hiring someone

  3. Outline the hiring and onboarding processes

  4. Set up functions to handle salary and benefits

  5. Create job listing ad

Tips on Hiring

Melina Fairleigh, our VP of People, she shared her thoughts on hiring at one of our Mastermind events. Here are two of her tips:

Understand what makes you different: Know why great folks should want to work for you and articulate this in your listings, as well as in the interview. When you set yourself apart, it’ll help attract higher caliber prospects. You’ll still have to weed through applicants, but you’re more likely to find a better fit.

With this in mind, Melina suggests building a candidate experience that helps them get a feel for the company and you get a feel for them. Consider individually taking your lead prospects out for coffee to chat with them in a neutral environment. And communicate with all prospects throughout the process. Even if you don’t end up hiring someone: their experience with you matters. 

Embrace the past: According to Melina, “Don’t start from scratch every time you need to hire someone.” She suggests getting in touch with talent that you lost or past applicants who didn’t have enough experience. You never know who is ready now and looking for a great job.

Additional Resources From Our Blog

Where to Go From Here

You’re not alone if you find the process of starting a new business overwhelming. And this is exactly why community is so important.

Check out our local meetups and full day Mastermind events to network and learn from other service businesses.

Also consider joining these trade organizations:

And these Facebook groups:

For general business resources, we recommend:

Check out a longer list of small business associations. Finally, don’t forget to download the ‘How to Start a Lawn Care Business Checklist’ — a summary of all of the steps we went over in this guide.

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