Do you want a piece of an industry worth $129 billion? It seems unreal but that’s the market size of the landscape services industry in the United States. The National Association of Landscape Professionals also highlights in its financial benchmark study that a landscape business has a median of 305 customers and generates $12,798 per customer. That’s enough motivation to jump into the landscape industry, but, before you do, there are a few important things to keep in mind first to ensure that you’re setting yourself up for success.
Is Landscaping Business for You?
If you’re interested in learning how to start a landscaping business, you must already have a green thumb and prefer working outdoors. It’s indeed a great way to start your own business and make a good living doing something you love. However, before you invest considerable time and resources in your landscape business, you must be sure that you’re passionate about landscaping and want to seriously pursue it as a career. Ask yourself, do you truly find joy in designing, constructing, and maintaining outdoor spaces?
Running a business in any industry comes with its challenges. There are legal, financial, and tax obligations to consider. If you want to expand, finding the right people to hire can be exhausting. Finding clients as a new business takes time as well. If you’re passionate about landscaping and love the idea of entrepreneurship and the freedom it provides to be your own boss and set your own hours, then you’ll relish the challenges and be incredibly motivated to vanquish them.
9 Steps to Start a Landscaping Business
You need more than just a shovel and a lawnmower to start a proper landscape business. First, it’s important to figure out the services you’ll offer and what you’ll charge for them. Landscapers are also required to have a business license in most states, and if you’re in a state that does, ensuring compliance with those regulations is crucial.
The legal requirements of setting up the business structure are relatively simple. In addition to acquiring the necessary tools and equipment, you may also need business insurance, which includes general liability insurance. There are a few other things to be mindful of as well, so let’s go into more detail so that you can launch your business rather effortlessly.
Determine the Specific Services You Want to Offer
All great businesses start with a business plan. It lays out the services you’re going to provide, what you’ll charge for them, and how much it would cost to operate the business. This will enable you to reasonably chart a path to profitability and growth.
Before you start creating the plan, gain a thorough understanding of your local market. There are a variety of services that you could offer, such as irrigation, gardening, lawn mowing, mulching, tree trimming, landscape design, and more. See what services homes and businesses require. Research competitors to figure out how you can provide additional value to customers.
This process will help narrow your focus so that you can find the right target audience. Once you’ve figured out which landscaping services to offer, you can begin to put together a pricing structure.
Set Your Rates
It’s important to first consider business expenses when pricing the services. Take the equipment, marketing, payroll, and other related expenses into account. Survey the local market to see how much your competitors are charging for similar services. An easy way to do this is to call up some of those service providers for quotes.
Use the information to put a suitable pricing structure together. It’s tempting to undercut competitors on price as a new business and that strategy can work within reason. However, you shouldn’t be lowballing them so much that clients feel your prices are too good to be true and that there must be a catch somewhere.
Plan and Manage Your Finances
Prudent financial management is the key to success in business. Set up an accounting system to keep track of customer accounts, business expenses, and schedules. Your goal should be to ensure that not a single item slips through the cracks. There should be complete transparency for the money coming in and going out.
This will enable you to effectively push for growth by setting budgets for marketing and expansion. You’ll also be in a much better position to make informed business decisions should market dynamics require you to adapt quickly.
Decide on the Type of Business Structure
It’s important to choose the right business structure when setting up your landscaping business as it determines how the business will be taxed and what liabilities it will have. Most landscaping businesses typically choose one of the following structures:
Sole proprietorship: It’s an unincorporated business where the owner is personally liable for the debt, tax, and legal liabilities. Since there’s no separation, the owner can be held personally liable for any business liabilities. Many small business owners start with a sole proprietorship as it’s the easiest and least expensive to set up.
Limited Liability Company (LLC): The LLC is a business that blends the ease of a sole proprietorship with liability protection. The assets and liabilities of the LLC are separate from the owner, so they enjoy greater insulation in case of a lawsuit or bankruptcy. That’s the primary sole proprietorship vs. LLC difference. LLCs are also able to choose how they’re taxed.
Register Your Business
In addition to registering your business with the state, there may also be other requirements you need to meet. Contact your local business licensing office to find out the licenses or permits you’re required to obtain. You also need to get an Employer Identification Number (EIN) for your business from the Internal Revenue Service (IRS) to open a bank account, make tax payments, and qualify for any eligible deductions.
Open a Business Account
When running your own business, it’s important to separate your personal and business finances, even as a sole proprietor. This makes it much easier to manage finances for your business and also helps simplify matters during tax season. Once the business is set up and the EIN has been obtained, open a business bank account in a suitable bank.
Buy the Equipment and Supplies
Your equipment needs are defined by the services you’re offering. A landscaping business will typically require a lawn mower, leaf blower, weed whacker, shovel, trimmers, rake, gloves, and ear and eye protection. Additional supplies such as soil, fertilizer, and mulch may also be required so that you have everything readily available for a job.
As the business starts growing, you’ll need to hire more people. Decide whether full-time employees are required or if the business needs can be met with part-time independent contractors. The latter can often be cost-effective while full-time employees reduce your need to find and train new people.
Quality labor can be tough to come by in the landscape service industry, so consider the type of experience and qualifications they have before making a decision.
Market Your Services
It’s time to get the word out about your business and the services that it offers. Effective marketing will bring in more customers and put the business on a path to sustained growth. Establish a solid online marketing plan. Create a great website that lists your services and provides contact information. Promote it using social media networks to gain more visibility.
You can also run ads in local publications and attend trade shows to generate more leads. It’s a great idea to join professional organizations in the industry to get referrals and build relationships with other landscaping business owners to expand your network.
Customer referrals are a powerful marketing tool as well. When clients are happy with the service that you’ve provided, you can request them to recommend your business to people in their network and even offer discounts to referred customers.
Tips to Sustain and Grow Your Landscaping Business
Launching a business is easy. The hard part is making it profitable and achieving sustained growth. It’s common for new businesses to fail because the owners either underestimate the challenges or overestimate their ability to compete in a difficult business landscape.
As long as you understand the fundamentals of operating the business, choose the right business structure, stick to a solid plan, and make informed decisions to adapt quickly, you have a better chance than most at scaling up the business to new heights. Here are a few easy tips to help you do that:
- Stick to the business plan but be willing to adapt
- Never mix business and personal finances
- Leverage your experience and qualifications to offer the best service
- Maintain proper insurance cover to reduce liabilities for the business
- Be patient and don’t take too much risk for business expansion
- Focus on “word-of-mouth” marketing by delivering exceptional results for clients
The Grass is Certainly Greener for Landscape Businesses
There is a lot of potential for a landscape business to generate impressive revenue and profits. You can realize that potential by doing the necessary due diligence, choosing the right business structure, and offering services relevant to your target audience at the right price. Keep business and personal finances separate from the start. Hire the right people and always maintain adequate insurance coverage to keep the business protected against liabilities.
To achieve sustained growth, focus on smart financial management. Choose doola Bookkeeping to easily and accurately track every business transaction, make informed decisions, and eliminate stress during tax season.
How much does it cost to start a landscape business?
A basic landscaping business that provides mowing and maintenance services can be started for a few thousand dollars, while a larger business with more services would require costly equipment, raising the startup cost to over $10,000.
How to start a landscape business with no money?
You can share your business plan with lenders to get a small business loan for starting a landscape business. Or you can start a landscape business with no money by using your landscaping skills for labor before raising enough capital to start the business.
How to start a landscaping business with no experience?
It’s best to work with an established landscaping business to gain some experience before starting your own, as it will equip you with the knowledge to effectively run your landscaping business.
How profitable is owning a landscaping business?
Owning a landscaping business can be quite profitable as the average profit margins for companies in this industry range between 20-45%, depending on the areas they operate in and their pricing structure.
Is it hard starting a landscaping business?
Starting a landscaping business is relatively easy as there’s a low set-up cost for a one-person operation. Once enough revenue has been generated, more equipment and labor can be brought on board to expand the business.