Tips To Reducing Start
Cost Of Starting A Lawn Care Business
7 min read
Starting a lawn care business can be a rewarding, lucrative profession if you can get it off the ground. But as the saying goes, you typically do need to spend some money in order to make money.
How much money do I need to start a lawn care company? The cost of starting a lawn care business can be as low as $500, but a successful business requires some investing for equipment, marketing and sometimes hiring additional staff. You can start your business as a solo endeavor where you do all the work yourself, or you can hire part-time, full-time or on-demand labor.
Most lawn care businesses typically range from $5,000 – $8,000 in order to get started .
When planning your business, you may want to consider the following types of cost:
- Business structure
- How to impress potential clients without a lot of cash
Gross Margin: Why Is This Number So Important
Its because the total gross profit on all products sold initially is used to pay off overhead . Once overhead is paid off also known as the break-even point, you begin to make a profit at the rate of gross margin x the sales price of all items sold in excess of breakeven.
The gross profit contributes to paying off overhead and once paid off the gross profit contributes to the net profit of the firm. This is the reason many accountants refer to gross margin as contribution margin. The above concept is known as breakeven analysis and is one of the elementary cost control and pricing strategies taught at business schools.
As you increase or decrease selling prices while holding product cost constant, your gross margin rises or falls and therefore your breakeven point in a number of units to be sold decreases or increases based on selling price.
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Should I Track My Lawn Care Businesses Inventory
One of the most desirable aspects of a landscaping or gardening company is that there is very little inventory to deal with. You are selling a service, not a product.
While you will need supplies such as gas and trimmer line, inventory management can be handled without any bookkeeping, even on a large scale.
It wasn’t until my company grew to over $5,000,000 in annual revenue, that we needed to implement an inventory system.
Cons For A Lawn Business
There are a few issues that you’ll need to consider while planning your business.
- Seasonal: Unless you live in an area where winters arent bad, your customer accounts go into hibernation by mid-October. If you are looking for a year-round business, you will need to find something to diversify your product offering to keep business up and running through the winter.
- Start-Up Expenses: Depending on the type of lawn care business you decide to build out, you will need equipment and something to transport this equipment with. This may require upfront cash and in some cases, a sizable amount.
- Competitive: Open your phone book and you will find a number of lawn care businesses in your area. If the market is too oversaturated, you will find the need to compete on price and this will cut into your gross margins. Research your area and if possible speak to existing lawn care companies about what they are experiencing in your area.
- Some Economic Risk: When economic times get tough, existing residential customers may find the need to cut non-essential expenses, and for many, outsourced lawn care is one of those.
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Cost Of Seeding Your Lawn
Lawn seeding is another great way to improve and/or maintain the long-term health and vibrancy of your lawn. It depends on how large of a lawn you have, but the average cost of seeding your lawn is between $850 $1,700. The more area you need seeded the higher the price because it will take longer, and you will need more seed to finish the job.
Get Your Lawn Care Website Ranked On Google
You need robust SEO, so youre not steamrolled by your competitors. Ensure youre sending the right SEO signals by prominently displaying your branding and logo on your site.
Your site also needs to be mobile-friendly. Thats because more than half of all local searches are mobile searches.
Choose the right targeted keywords for your business. These are the ones that are going to be the most profitable. Its better to focus on long-tailed keywords because theyre easier to rank for.
You need to understand the intent behind using the keyword. This is why a user is searching for that particular term.
For example, if a searcher types lawns into the search box, he could be looking for all kinds of things. Several that come to mind include the history of lawns, how to take care of a yard, or why my lawn is better than my neighbors.
But if he typed in best lawn care near me, you know hes looking to hire somebody to do his lawn.
This will be a potentially lucrative keyword for you to use.
Business listings such as Google My Business are essential. A GMB listing can help you rank on Google and snag new customers for your lawn care business.
Thats why you need to optimize your GMB profile and keep it updated.
Local backlinks are important too. Ask business partners, local business directories, and local news outlets to link to your business.
One of the most fantastic things about it is the ultra-specific microtargeting you can do.
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Tree Pruning Or Trimming
Dont neglect the trees on your property. Its essential that you have them pruned every winter so that you wont end up with any dying branches.
This is a safety issue, and it will also encourage green growth when the spring arrives.
Beyond this, trees that are limbed-up and pruned allow more light to get to your lawn, which will improve the health and thickness of your lawn. It also just makes your property look better.
On average, homeowners with trees on their properties spend between about $292 and $638 to have tree branches pruned and to get their trees limbed up.
Beyond this number from my lawn care pricing chart, the exact price youll pay depends on the number of trees they have and the size of the trees.
Figuring Your Business Value
All Season Bill said:Since I may want to retire in about 3 or 4 years, I’m seriously trying to figure up my businesss worth. Someone told me to take your proffit from the past three years and add what business consultants call Good Will…or sweat equity for the years that you ran it since purchasing a company already established. Any thoughts?
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Sell To A Strategic Buyer
You can sell your landscaping business to a company that isnt a competitor but offers related servicesfor example, a business specializing in weekly lawn or pond maintenance.
To find a strategic buyer, go through your local business directory. Note any businesses whose services pair well with landscaping, then contact them about a possible purchase.
Which Is The Best Valuation Method For A Landscaping Business
Now that weve explored the three principal ways of valuing a landscaping business, which of them would you say is the most reliable?
Well, while we admit that were particularly fond of the Market Approach, being experts in business brokerage has taught us this one thing – that theres no single business valuation method that is universally superior to the rest. Each has its own advantages and disadvantages.
But then instead of taking that as a limitation, we methodically combined the three methods to form a foolproof business valuation strategy.
And we didnt stop there. Beacons business valuation process is now built to comprehensively analyze companies on more than 150 relevant data points.
You dont have to take my word for it, though. Heres a complimentary opportunity to try it out for yourself and get on your way to selling your business.
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Create A Business Plan
Creating a business plan is the best practice when it comes to starting any new business. This is a place to create a detailed document of all things related to your business and help you stay organizedespecially when youre getting started.
Your business plan should include the following:
- The business name.
- Whether the business will be caring for residential or commercial lawns .
- Whether you plan to be a sole proprietorship or manage a team.
- A detailed breakdown of your start-up and ongoing costs.
- Your offer strategy .
- Your pricing structure and strategy dont forget to consider lawn size, shape, and slope when determining price.
- The business and how you plan to generate customers and leads.
When starting a lawn care business there are several start-up costs to consider and account for when putting together your business plan.
Some of these start-up costs include:
- Equipment and tools
- Company vehicle or vehicles
How To Start Your Lawn Care Business
So, youve weighed the pros and cons above of starting a lawn care business and youre ready to get started.
Here are some tips to help you get mowing:
- Start small: Most lawn care professionals have only 25 customers they see regularly.
- Grow as you mow: Build your customer base through neighbors, friends, shoe leather.
- Build your reputation: With your first mow, leave a great impression.
- Find your niche: What separates you from the competition? That is your calling card.
- Wow your customers: Make your customers lawn look great every mow, every time.
And dont forget that LawnStarter can help you to grow your lawn care business. Our technology sends more jobs to you where you live growing your business and cutting your fuel costs and driving time. We also can handle much of your business operations so you can do what you love most mowing and providing other lawn care and outdoor services.
If you have questions about LawnStarters platform and ways you can better use the services, call or text LawnStarter Pro Support at 855-800-4872 Monday through Saturday.
Main Photo Credit: Max Pixel
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Start Your Lawn Case Business Legally
Like any business, you need to tick a specific list of legal boxes to get your lawn care business up and running.
Register Your Company Name/Structure
Once you have a structure for how youll run your lawn care operations, you can register your business accordingly.
There are three main types of business structures to choose from:
- Limited liability company : This structure protects medium or high-risk businesses from personal liability.
- Sole proprietorship: For those who choose to run their business alone and want full control.
- Partnership: Running a business with 2+ people still legally registered as self-employed. This structure requires an employer identification number for tax reporting purposes.
Once youve chosen which structure to run your business under, you can submit your business name to your regional government. This varies from country to country, but you can trademark and register your business name in the US if no other business is using it in your state.
Get a Business License
You cant start your lawn care business without a license. Business licenses can usually cost between $75 and $400 USD annually. Contact your local Small Business Administration or Chamber of Commerce to learn which business license you require.
Get Lawn Care Business Insurance
In order to cover damages, incidents, and injuries, you need to make sure that your lawn care business is properly insured. Typical insurances that apply to this kind of business include:
Overhead And Equipment Costs
Many lawn care businesses add an additional 1520% on top of their estimate to account for overhead costs.
You should also budget for equipment and maintenance in your overall lawn service cost estimate. Even after youve paid off your lawn mower, for example, it might still need engine repairs, spark plug replacements, or oil changes.
Some lawn care professionals charge two times the hourly rate of labor just to have their equipment on the site.
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Selling Your Landscaping Business To A Strategic Buyer
A strategic buyer is a business that operates in an industry related to your business. For landscaping, that could be a property management company, an irrigation & stormwater services company, or even another landscaping company outside of your service area.
A common strategic buyer is one who uses your services frequently. Think for a second, do you have any customers whose business could benefit by taking over the function you perform for them?
The main difference between strategics and competitors is that a strategic buyer is not a direct competitor of your business.
Choose Lawn Care Services To Offer
Not all lawn care businesses provide the exact same services to their clients. Deciding which services to provide will determine your budget and which equipment youll require.
Its worth starting with fundamental lawn care services to lock down your first clients. These include:
Understanding what competitors provide and what your customers require can help determine which additional services to provide.
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Types Of Landscaping Services
Some people often feel the need for a landscape service but are not aware as to what service they have to get. Landscaping is a lot more complex than just pulling weeds and mowing. The following services mention below are just some of the services that a landscape company can offer.
Pruning and hedging when done at the precise time of year can greatly improve plant health and flower-bloom rendition. Pruning is designed to maintain a plants shape or size and to get rid of dead plant limbs. Hedging is the art of shaping plants into geometric shapes and styles.
As a general knowledge, we know that plants acquire nutrients from the soil. To protect your plants and greenery, you must be sure that owners enroll in a plant feed protection program in your landscape plan. In line with the program and with the existing flora in your landscape, you will receive feedings and fertilizers. Pest prevention measures are also a part of this plan.
In most maintenance contracts, an irrigation start-up and shut-down are already included by most landscape business owners. As a business owner offering a seasonal display is a great addition to the services. Seasonal displays include yearly flowers for fall, summer, and spring. This service adds an extra touch of soul to landscapes and excitement as the season changes.
Leaf removal is also one of the unique services in the landscaping business. Some clients opt to avail of their service once or twice a year or as the need for it arises.
Reduce Working Capital Requirement
On average, how long does it take you to get paid? When a buyer steps in, they’ll need to have enough money to pay employees, vendors, and keep the lights on before revenue comes in.
If you’ve been extending credit to customers in excess of 30 days, this will make it difficult for buyers to use the SBA 7 program. By cleaning up your accounts receivable over 30 days, you’ll be more attractive to potential buyers.
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