April 17, 2021
Planning ahead and starting out our business on the right path can optimize your chases for success. We created a helpful checklist for you to use.
Landscaping is a large industry in the United States — over 600,000 companies serve the $105 billion market each year. The industry has shown stable growth historically — it grew 2.5% on average between 2016 and 2021.
Landscaping companies typically offer a wide range of services including lawn work such as mowing, cutting, and edging grassy areas, trimming bushes, laying sod, and maintaining grounds. Customers typically include households, businesses, neighborhood associations and local governments.The landscaping business tends to be very seasonal in regions that experience colder winters. Spring and summer are peak seasons for the industry. Many business owners and workers in landscaping offer alternative services during slower months such as snow removal.
Homeowners often place a priority on investing in landscaping because it helps maintain the value of their homes and neighborhoods. It also gives them a sense of pride in their residence. Businesses also invest in landscaping to improve their brand image. Landscaping is seen as a necessary and worthwhile expense for many individuals and businesses.
The landscaping industry is very fragmented — approximately 70% of the 600,000 businesses in the United States are operated by small business owners. The barriers to entry are low relative to other industrial and manufacturing businesses — many successful business owners today were able to start their businesses with a small amount of savings or by using their credit cards to buy their first equipment.
Starting and running a successful business can be tough. It requires wearing many hats (operational, financial, human resources, customer relations, etc). It might be tough, but it can be done and thousands have done it successfully. We have created the list below to help you run your landscaping business.
Numbers can and should be your friend. If the numbers do not add up, neither will your business. At the end of the day, you need to focus on how your business profit and loss statement works, and track it on a regular basis.
Each year or quarter you should create a forecast and budget for your operations. Think through what your business needs to operate — people, machinery, utilities, phone, etc. Add everything up. Then make a forecast of how much revenue you think your business will generate. As time goes by comparing actual to reality. Over time you will see that your forecasting skills will improve and that your budget is almost never perfect (that's normal!).
Sticking to your budget and tracking it will help reinforce cost discipline. Whenever an expenditure pops up that was not in your budget, you will start to put extra scrutiny on it. This behavior is good because it keeps you disciplined.
Cheap is not always better. Hiring people is one of the most important things you will do when you run your business. People will make or break your business. Your employees represent you and your business to your customers and the public. Also, the quality of their work will determine how customers view the quality of your company. High churn (hiring and firing frequently) can be very costly in the form of training costs.
Similar to people, cheap equipment is not always better. The quality and dependability of your equipment will have a big impact on the level of service you can provide to your customers. Downtime due to equipment malfunctions is a real cost and can make customers frustrated. Service and repair costs can add up quickly for older machines, which can end up costing you more in the long run.
Try to price every job correctly so you make an adequate profit. You do not need to win every piece of business. You should have a good idea of your overhead charges, and the amount you need to charge to break even. Always make estimates based on facts, not guesses.
A detailed estimate should contain all the details about the project. These details include the materials you plan to use, the amount of labor, equipment used, transportation costs, etc. Once you have these estimates ready, you can share them with your crew and ask them to use them as a job planner. You can share all details without the costs associated with them so that they are aware of the expectations and deadlines.
You need to maximize your revenue earned per hour. You can do this only when you divide the price of every single job by the number of labor hours. When you calculate this, you will get different ideas on earning more per hour without adding workforce or overhead charges. Here are some ways in which you can do this:
Amazon has recently moved to "game-ify" their packaging floors by making work fun and competitive among workers. By doing this they encourage more engagement and focus on the work. You can "game-ify" your work too by sharing scoreboards for each member of the crew and tracking their progress. Most people are interested in making themselves look good in front of others.
Have brainstorming sessions with your crew to understand the areas where time is wasted and what can be done to reduce inefficiencies. The people on the front line will have ideas on how to improve your business. An hour spent fixing problems or broken tools means an hour spent on payroll without getting any actual work done. Learn to listen and integrate feedback. Workers also feed good when you implement their ideas.
Use updated software and programs to automate your work. Keep your files and documents organized so you can quickly retrieve information. Simplifying your scheduling and budgeting process will remove stress from your life and help you focus on other aspects of your business.
Most of the time, many business owners make the mistake of leaving their accountant to handle all the numbers. As the owner, you should know your numbers and what they mean for your business. Once you get a hold of these figures, you should teach your crew the importance of those numbers, and what they can do to make these numbers better. This will ensure that all of you are on the same page when maximizing profits. Once they know the business numbers well, your crew will have no problems knowing the company's big picture and working towards it instead of focusing on drawing their paychecks only.
Landscaping is a great opportunity for hard-working and ambitious people. You can be successful if you stay disciplined and focused. We hope these pointers above are helpful for you in your ventures.