When considering starting a landscaping design business decide on what you want your business to focus on and look into the costs, potential profits/costs you can expect, and who you may need to hire for your business to be a success.
Landscape design is a good business to start, just be sure to do your research first and consider aspects such as startup costs, business loans, potential profits/costs, employees, and the pros and cons of the industry. Landscape design is a great business for those who love to work outdoors and enjoy beautifying the environment.
When getting started as a new business owner you need to consider a lot of things, let’s begin with the startup costs. Some of those costs include tools that you will need. You will want to consider purchasing a company truck too. To obtain these supplies you may want to take out a business loan.
Also, be sure to determine what profits you can expect from the business. When thinking about profits, you also need to consider what will have to come out of those profits for the upkeep of your tools and the truck. One of the biggest and most constant costs of this type of business will be employees unless you are the sole source of labor. There are a lot of pros and cons of a landscaping business. A pro of this business type is the low startup cost, and a con is the amount of competition you will face.
Startup Cost
Let’s begin by talking about purchasing a company truck. You can get always opt for something cheap of course. However, the upkeep of an old, cheap truck will be higher in the long run. Also, does an old, cheap truck doesn’t paint a good image for your business?
All the tools you use will have to be purchased as well. Rakes, safety equipment, sheers, lawn movers, and plants of course. Some items you have the option of renting will lower your initial startup costs. These items will still need maintenance as well, you have to keep the law mower blades sharpened and the oil changed.
Also, another startup cost would be purchasing a business license. The price of which will vary depending on your local and state policies/taxes. Also, yearly taxes are a huge business expense, most companies save up all year to pay their tax returns. Insurance is another monthly expense you will need to pay for, an example is workers’ compensation insurance.
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Getting Started with a Business Loan
If you don’t have startup capital, which is unfortunately the case for most. A business loan is a way to get the initial money for startup costs. You can take out loans to suit your specific needs. For example, loans can be taken out for purchasing equipment.
To get a loan you need to find a lender. Consider a loan with a bank you use for personal finances. You have a history with the bank after all, as long as you have a good history with them, you can get a better rate. Just be sure you are thoughtful about the loan before you take it out, your business should be able to pay off your loan by bringing in as much money as possible.
Loans are a tool to help your business grow and you must choose the right tool. Loans through the Small Business Association (SBA) are a good way to go, they set the gold standard for business loans. They offer 7 (a) loans which have capped interest rates and limited fees. 504 loans are intended to take a long time to pay off and microloans are just what they sound like, small-amount loans, to name a few.
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Monitoring Potential Profits / Costs
Profits are something that should be calculated. After all, that is what you are working for. To keep profits high be sure to maintain your equipment (replace the lawn mower blades, change the oil regularly, etc.) so that you don’t end up having to continuously replace them.
A landscaping business has an expected 5-20% profit margin. This profit margin also depends on what services you offer. Residential installation jobs can range a profit margin between 15-20%. If you do commercial work, you can expect a smaller profit margin, 10-15%, and the commercial side of landscaping is more competitive.
Servicing many different types of markets ensures your business stays afloat even during economic downturns. For example, if your residential clients can no longer afford your services, commercial businesses may be able to pay you. Also, make sure your services are priced well. Your prices should be high enough that you make a profit, but low enough that your clients find your services worth the price.
Be sure to monitor books closely. You want to know how much you make or lose. This will also make sure you are not taking on too much additional cost.
Employees
If you are not planning on doing all the labor for your business, employees will be one of your biggest ongoing business expenses. If you want to keep those employees loyal you will have to compensate them well. Paying them low wages will result in a high turnover rate.
Some potential employees you may want would include a technician who specializes in installing irrigation systems. Keeping your plants plenty watered and reducing the time that would have to be spent watering those plants manually. Consider a Gardener as well who specializes in plants and what they need to thrive. As your business grows you may need to hire more help.
Also, if your business grows enough you may want to hire employees to fulfill non-labor positions. Some such jobs include an Accountant and a Customer Service Representative. If you have a physical office location you may even need to hire a Receptionist.
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Pros and Cons
There are both pros and cons to the landscaping business, one pro is the startup costs are pretty low. It will be low as long as you are thoughtful about how you obtain your tools. Also, another pro of establishing a landscaping business is that it can easily become a way to sell products to your clients, diversifying your business. You can suggest certain fertilizers or sell plant food.
Another Pro of a landscaping business is no matter where you are located there is a demand for landscaping. From Rock gardens to huge, green lawns, there will be a clientele base. Also, a lot of those clients are likely to become repeat clients, as long as you maintain a standard.
So, yes, there is a demand for landscaping everywhere. However, depending on your location this business can become a seasonal gig. If you are located somewhere which has four seasons your business will slow down during the winter months. You can’t landscape when plants don’t grow.
Additional cons in starting a landscaping business include a high level of competition because of the low start-up cost. Also, the high cost of labor is a con that needs to be considered. You must carefully balance your profits with your cost of labor.
A landscape design business is a good business to start. That is as long as you have an idea of what you are getting yourself into. Consider the startup costs you will be facing. Equipment will need to be purchased or rented and maintenance needs to be performed to keep that equipment working well. Insurance needs to be paid for monthly and licensing has to be bought. To get the money for the startup of your business you may want to consider a business loan.
A huge cost of this business type is employees. If that is, you are not the only source of labor for your business. Be sure to consider the Pros and Cons before deciding to open a landscaping business. Pros include a high demand for landscaping services. Cons include labor costs, if you do not pay your workers well you will have a high turnover rate. Another Con is a landscaping business is seasonal depending on where your business is located.
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Frequently Asked Questions
How to Deal with Clients Who Have Pets?
From the beginning of your business, you should develop a set of protocols for how your business handles clients who own pets. Are you willing to pick up after them? Also, do you prefer your clients keep those pets inside while your business is working on their lawns?
Ways to Retain Clients?
Consider having your clients complete surveys, so you can get constructive feedback and find new ways to grow your business. Also, be sure to consider that feedback, do they like something that your business does and is there something your business needs improvement on?
How to Get Clients?
A lot of landscaping businesses are referral-based. Give your clients your business card, they may give it to their friends. Also, consider using social media as another source of marketing.
Sources:
https://lawnlove.com/lawn-pro-resources/cost-of-starting-lawn-business
https://www.landscapeindustrycareers.org/discover-the-industry/what-do-landscape-professionals-do/
https://www.lawnandlandscape.com/article/ll1113-profit-smart-pricing/
https://www.thebalancesmb.com/pros-and-cons-of-starting-a-lawn-business-1794497
To learn more on how you can start your own landscaping business, check out my startup documents here.
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Meet Shawn Chun: Entrepreneur and Landscape Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a landscape business owner at a job site, driving down the road or anywhere else I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Landscaping Business Boss: I want to help landscape business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.