Do you love working outdoors and want to be your own boss? If so, starting a lawn care business might be a great opportunity for you to turn your passion into a profitable business.
The beauty of this industry is not just in the constant need for services but also in the relatively low starting costs and the potential profits. So, if you are looking to learn more about what it takes to set up a lawn care company, read on!
A lawn care business offers various services to homeowners and businesses, such as mowing, trimming, gardening, and landscape maintenance.
You can offer services depending on your budget, market demand, and expertise. For instance, if you’re good at designing outdoor spaces, you can include garden design in your services list. Likewise, if your area experiences harsh winters, adding seasonal services like snow removal would increase sales.
The primary source of income for a lawn care business is the fee charged for these services. Pricing can be determined per service, in a packaged deal, or through a monthly or annual maintenance contract. The cost usually depends on the size of the lawn, the type of services provided, and the frequency of work.
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The lawn care services industry generates over $50 billion in annual revenue in the US.1 It is a large, highly fragmented industry that serves both residential and commercial customers.
According to the National Association of Landscape Professionals (NALP), 40% of Americans with a yard hired professionals for lawn or landscape work in the last year.2 This means that out of the 126 million households in the US3, approximately 50.4 million hire lawn care services.
The lawn care industry has grown by 5.2% annually over the last five years and is expected to continue, driven by various factors.4 The market is expected to grow because of the scarcity of free time for people to do their lawn care and the increased focus on the aesthetics of the outdoor living space.
Why Start a Lawn Care Business?
As you’re researching whether to start a lawn care business, here are some positive aspects of starting a lawn care business:
- Stable demand: Lawns are everywhere and grass is always growing, which makes lawn care a constant need.
- Earning potential: Lawn care is not a one-time service. Lawns need regular care and maintenance, which means your customers will likely need your services on an ongoing basis. This can provide a steady stream of income.
- Low startup costs: You don’t need a physical store for a lawn care business, drastically reducing startup costs.
- Easy to expand: Scale up when you’re ready. You can choose to take on larger projects or expand into areas like tree and bush pruning, landscaping, or pest control.
- Freedom and flexibility: Being your own boss offers you the flexibility to work the hours you want.
Reasons For Not Starting A Lawn Care Business
Starting a lawn care business can be challenging for several reasons:
- Competition: The lawn care industry is highly competitive, with many established businesses already operating in most areas. New businesses may struggle to attract customers away from these industry veterans.
- Liability risks: There are inherent risks in lawn care work, including potential damage to a client’s property and accidents that can happen on the job. This risk makes insurance especially important, which is an additional cost.
- Labor shortage: The lawn care industry often faces labor shortages, which can make it difficult to find and retain reliable employees.
- Physical demands: Lawn care is physically demanding work, often requiring long hours in various weather conditions. It can be taxing on the body, especially if you are not accustomed to physical labor.
- Seasonal fluctuations: Depending on your location, lawn care can be highly seasonal. In colder climates, there might be little to no work during the winter months unless you diversify services.
Steps To Start A Lawn Care Business
Step 1: Write a Business Plan
Starting a lawn care business can seem like an easy feat, but even if you have experience doing the work, keep in mind that launching a successful lawn care business is more than jumping on a lawnmower. So, one of the most important steps you can take in the beginning is writing a business plan, yet it is one that many startups often overlook. Outside of a lender typically requiring one if you need a loan, here are a few reasons I think a business plan is important for a lawn care business.
The first reason is market research, which will provide valuable insight into customer needs, competition, and pricing strategies specific to your area. By understanding these factors, your services can better meet market demand, giving your business a competitive edge. Additionally, this market research lays the foundation for developing effective marketing strategies, helping you attract and retain customers.
Another important section is mapping out operations. This includes detailing the specific services your business will offer, identifying the necessary equipment, determining staffing requirements, and establishing schedules and routines. By covering these aspects in your plan, you can work through the kinks on paper and ensure a smoother-running lawn care business.
Financial planning and startup costs are important considerations as well. In the lawn care industry, equipment, labor, and seasonal changes significantly impact costs and earnings. By calculating startup costs and projecting income and expenses, you can gain a clear understanding of how much you need to get started and estimate the financial feasibility of your business.
Related: How to write a business plan
Step 2: Source Funding
Starting a lawn care business requires capital to cover initial costs, such as equipment purchases and marketing. But for many, a big question looms: “Where will I find the money to start my business?” Here are several options to consider when it comes to consider:
Personal savings: Since a lawn care business can be started on a small scale with minimal funds, many entrepreneurs use their personal savings to finance the initial costs. This provides full control over finances and avoids having to pay back debt.
Family and friends: Borrowing money from people you know can be an option for funding your lawn care business, especially if they believe in your idea and potential for success. It’s important to be upfront about the risks involved in starting a business and to draw up a formal agreement outlining the terms of the loan. This can help prevent any misunderstandings or hurt feelings down the line.
Bank loans: Traditional bank loans are a common source of capital for starting a lawn care business. However, they may require collateral and a solid credit history. If a bank considers the loan too risky, they may use a Small Business Administration (SBA) loan guarantee for additional security.
Business credit cards: For smaller expenses like equipment purchases and marketing costs, business credit cards can come in handy. They provide quick access to funds and can help you keep track of business expenses. However, they often come with higher interest rates, so it’s important to use them responsibly.
Equipment financing: Some dealers and specialized lenders offer equipment financing tailored specifically for purchasing lawn care equipment. This allows you to spread the cost over a period of time, easing the financial burden on your business.
Microloans: When traditional lending options are unavailable, microloans can be an alternative. These loans are provided by local economic development organizations and may come with additional benefits like business training in addition to funding.
Step 3: Register the Business
Starting a lawn mowing business involves several legal steps to comply with local, state, and federal regulations. Here are some of the key considerations:
Business structure: When starting a lawn care business, you will need to first decide on a business structure. Options include:
- Sole proprietorship: This is the simplest form, where the business is owned by a single individual. It’s easy to start with the lowest cost but offers no personal liability protection if the business is sued.
- General partnership: Similar to a sole proprietorship but with two or more owners. It’s simple to establish, but partners are personally liable for the business.
- Corporation: A more complex structure, but offers liability protection to its owners. It can be costly and involves more administrative requirements.
- Limited Liability Company (LLC): Combines the simplicity of sole proprietorship or partnership with the liability protection of a corporation. An LLC is often a popular choice for small businesses, including lawn care, due to its flexibility and protection.
Related: Comparison of business structures
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
Related: Tips on naming a lawn care business
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Obtain business licenses and permits: Determine the licenses and permits required for operating a lawn care service in your area. These may include a pesticide or herbicide applicator’s license if you apply certain chemicals and specific landscaping permits may be required depending on the services that you offer.
While licensing may not be required, it’s important to familiarize yourself with any specific laws and regulations related to operating a lawn care business. This could include regulations on chemical usage, water usage, noise restrictions, and safety protocols.
Last, depending on your location, you may need to obtain general business registrations, such as a local business license, seller’s permit, and Employer Identification Number, in order to operate legally.
Step 4: Acquire Equipment
With your business registered and financing lined up, the next phase is purchasing equipment. Not only will you need the essential equipment like lawn mowers, trimmers, blowers, rakes, shovels, etc., but a reliable truck and trailer will be needed, too.
In addition to the equipment, make sure you have a secure place to store them. It’s not uncommon for a lawn care business owner to use their residence to store equipment and use a spare room to operate the business. It’s a convenient and cost-effective solution, but look into local zoning laws and neighborhood covenants (if you own your home) or rental restrictions (if renting). Alternatively, renting a space specifically for your business operations can project a more professional image and might be necessary as your business grows. However, this adds an additional expense to your budget.
Step 5: Set Pricing
Setting the right price for your lawn mowing services is the next step and can be challenging to get right. Pricing your services too high can drive away potential customers, while charging too little may not cover your costs. How you structure and benchmark pricing can mean the difference between highly profitable client relationships versus barely scraping by. Here are common ways lawn mowing businesses set their pricing.
Hourly rate: One of the most straightforward ways to charge for your services is by the hour. This means you’ll estimate how long it will take to mow a lawn and then charge based on that time. For example, if a lawn takes 45 minutes to mow, you might charge the customer $45. Some businesses also set a minimum per lawn, no matter how small. This approach is simple and easy to understand, but it does require you to accurately estimate how long a job will take.
Flat rate: Another common approach is to charge a flat rate for your services. This means you’ll set a fixed price for mowing a lawn, regardless of how long it takes. The advantage of this approach is that it’s easy for customers to understand and budget for. However, it does mean you’ll need to be able to work efficiently to make a profit.
Seasonal contracts: For regular customers, offering a seasonal contract is often the best. This could be a flat fee for a specified number of visits or services throughout a season. This approach ensures consistent work and income over several months.
Square footage: Some lawn care businesses charge based on the size of the lawn. This means you’ll calculate the price based on the square footage of the lawn. This approach can be more accurate than an hourly rate, but it does require more work to measure and calculate the price.
No matter how you decide to set your prices, the important thing is to make sure they reflect the value you’re providing to your customers. You might not get your pricing right the first time, and that’s okay. The important thing is to learn from your experiences and keep adjusting until you find the pricing strategy that works for you.
Step 6: Prepare to Launch!
With major milestones like business formation, financing, and pricing nailed down, some minor yet meaningful tasks remain. Each business’s needs will vary, but there are common areas that most lawn care businesses will need to address.
Business insurance: Business insurance can protect your company from financial loss and legal complications from accidents. Common types of insurance for lawn care businesses include general liability insurance, property insurance, commercial auto insurance, and worker’s compensation insurance (if you have employees).
Setting up bookkeeping: This involves setting up a system for handling daily transactions, taxes, and preparing financial statements. You can opt to hire a bookkeeper or use software solutions to simplify this task.
Contracts: Contracts are an important part of any business, and your lawn care business is no different. From service contracts to liability waivers, these documents help clarify expectations and protect your business. RocketLawyer and Law Depot have free and inexpensive templates that may be helpful, but consider consulting with an attorney to ensure your contracts are legally sound.
Opening a business bank account: Opening a dedicated business bank account helps maintain accurate financial records, simplifies tax preparation, and adds professionalism to your business.
Hire staff: Initially, you might start out working solo. However, as your business grows, you may need to hire employees or work with independent contractors to handle the workload. Understanding the differences and the legal and tax implications of each is important.
Market your services: Come up with a marketing strategy to let people know about your new lawn company. Various channels like direct mail, local advertising, and word-of-mouth are popular ways to promote mowing services.
Common Questions When Starting A Lawn Care Business
How much does it cost to start a lawn care business?
Depending on factors like equipment quality, location, and marketing strategy, the total to start a small lawn care business can range from $2,000 to $20,000, plus the cost of a vehicle and possibly a trailer. Here are some of the main costs involved in starting a lawn care business:
Equipment: This is often the most significant startup cost. You’ll need a reliable lawn mower, trimmer, edger, and possibly a leaf blower. Depending on the quality and newness of the equipment, this could cost anywhere from $1,000 to $15,000.
Vehicle and trailer: If you don’t have one already, a reliable vehicle and trailer will be needed to transport equipment.
Business registration: The cost for business formation and licenses vary depending on your location but can range from $50 to $500.
Insurance: Insurance is crucial for protecting your business from potential liabilities. The initial cost for general liability insurance can range from $600 to $1,000.
Marketing: Initial marketing costs can include website development, business cards, flyers, and online advertising. These costs can range from $100 to $1,000.
Location: If you’re planning to rent a commercial space for equipment storage, you’ll need to consider the cost of the initial deposit. This can vary widely depending on your location.
How profitable is a lawn care business?
The profitability of a lawn care business can vary widely based on several factors, including location, pricing, number of clients, and operational efficiency. Let’s consider a hypothetical scenario to estimate potential profitability.
Assume a lawn service charges an average of $50 per lawn and services 40 lawns per week. This would result in a weekly revenue of $2,000 (40 lawns x $50). Over a month, assuming four weeks of work, the revenue would be $8,000.
Now, let’s look at the expenses. Major monthly costs might include fuel for vehicles and equipment, which could be around $400, equipment maintenance at about $200, marketing costs at $300, and insurance at roughly $100. Adding these up gives a total monthly expense of $1,100.
Therefore, the monthly profit before taxes would be the revenue minus expenses, which in this case is $8,000 – $1,000 = $7,000.
It’s important to note that this is a simplified example. Actual profits can vary based on factors like seasonal demand, weather conditions, competition, employee wages (if any),