How to Start a Landscaping Business
If you enjoy working outdoors, have an eye for detail, and aren’t afraid of some physical labor, it might be time to consider starting a landscaping business. As a landscaper, your daily work may vary from mowing lawns to designing a garden to creating a retaining wall. When you own a landscaping business, you may be a one-person operation or can choose to expand and hire employees. Starting a landscaping business can be a rewarding and enjoyable career for nearly anyone who likes the outdoors.
Landscaping businesses alter the appearance of lawns, gardens, and other outdoor elements. Landscapers may provide residential or commercial services, and some work with the government or non-profit operations, too. Landscaping customers often become repeat clients, which can help a landscaper to quickly build up a roster of clients. In the off season, some landscapers offer snow removal services.
While starting a landscaping business may seem like the ideal way to spend your days outside, a lot of this business consists of in-office tasks like managing payroll, marketing, and scheduling. Plan to spend a good deal of your time on administrative tasks to keep the business running smoothly.
Landscaping will have you outdoors in some great weather and be ready to work when the weather is less than enjoyable. This business can be seasonal, so business owners need to be prepared with a side business or other seasonal business such as snowplowing that will pick up when the landscaping work dies off in the winter months.
Succeeding as a new landscaping business can be hard as it doesn’t cost a lot for a new competitor to start their business. Providing excellent service, managing employees well and professional marketing is key, and as your business grows, it is harder for these new operations to take business away.
Establishing a new landscaping company can be a challenge if existing businesses already hold the majority of local customers. When starting up a new business, make sure that there’s enough local demand for the services, or consider offering specialty services, like organic lawn care, that isn’t currently offered locally. One benefit of going into landscaping is that you can often start up a smaller business on a part-time basis, taking your time to grow it into a full-time operation.
According to IBIS World, the landscaping services industry has steadily grown by 4.6 percent from 2014 through 2019. As of 2019, the total revenue in this industry is $99 billion, and 505,643 landscaping businesses are in operation. As the number of businesses has grown, industry employment has also increased to 1,096,000.
The industry’s growth relates to the housing and property markets. As those markets have grown, the demand for landscaping has also increased. Many landscaping clients are on the higher end of the income demographic, and as disposable income has increased, this has resulted in increased use of landscapers.
Many trends are currently reshaping the landscaping industry. According to Total Landscape Care, younger landscaping customers between ages 18 and 34 are buying homes and bringing new expectations to the industry. Younger couples who have children or pets are requesting more organic landscaping approaches, but new homeowners, especially younger homeowners, also often underestimate the cost of lawn care services.
Technology integration with lawn care also continues to evolve. Aerial photography, apps, and smart sprinkler controllers allow landscapers to be more efficient with less manual labor. Changing city ordinances are also increasingly demanding that landscaping crews use battery-powered electrical equipment because of its eco-friendly properties.
Homeowners are also becoming more aware of the importance of supporting the environment, which has led many homeowners to request pollinator gardens that help to support bees and butterflies. Many homeowners who don’t have time to maintain their gardens request low-maintenance designs or hire landscapers to regularly care for the gardens.
Landscaping companies appeal to many different audiences. Some businesses market smaller-scale services to homeowners, while other businesses have large-scale operations and may specialize in working for businesses, corporations, and venues with significant acreage. Price point can also differentiate a business’ target market, and a business may specialize in providing upper-end landscaping services to a wealthy clientele. Other businesses may use only organic and eco-friendly products and methods, appealing to clients who wish to protect the environment.
In general, higher-earning households are a better target as they are often busy, can easily afford landscaping services, and live in neighborhoods where there is pressure in maintaining landscaping.
Checklist for Starting a Landscaping Business
If you’re thinking about starting your own landscaping company, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your business should be to write a landscaping business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful landscaping business.
Related: How to write a business plan
Step 2: Choose a Business Name
A business name will be needed for your landscaping business. Registration of the name will vary depending on the business entity, availability, trademarks, and more.
When coming up with names, consider using words like landscape or lawn so potential customers won’t have to guess what your business does.
Step 3: Form a Business Structure
A business structure (also referred to as a business entity)refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of structure has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business structure is best for a landscaping business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
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:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
While a landscaping business doesn’t necessarily need a traditional storefront, a garage to store lawn maintenance equipment is necessary. Business owners of smaller-scale operations may be able to run the business out of their garages, but once a business grows, it will be time to invest in a larger garage. Lease costs for this type of space will vary according to location and the size of the space needed.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
To operate a landscaping business, an owner needs to secure permits and licenses depending on their local town and state regulations. These requirements vary according to location, so it’s best to ask the local business administration or town hall to find out just which licenses and permits are needed.
Additionally, an Employer Identification Number (EIN) and other permits may be needed.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a landscaping business is another. Fortunately, the cost to start a landscaping business isn’t super expensive, though getting funding can be difficult for a new business. In order to get a small business loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
Landscaping businesses rely on marketing to find new customers. Common marketing techniques for landscapers include direct mail, paid print advertising, posting flyers in local businesses, an online Google Business listing, and social media marketing on platforms like Facebook, Linkedin, and Instagram.
Referrals are the best source of new customers, and you won’t have to spend anything to get them. Make every job important and do good work, and new referrals will keep coming your way.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a landscaping business. A few of these include:
– General liability insurance protects the business if a customer is ever injured or if the business accidentally causes property damage while on-site.
– Worker’s compensation insurance is required to protect employees. If an employee is injured on the job, this type of insurance helps to cover medical bills and lost wages.
– Auto insurance is necessary for any business vehicles or trailers. Commonly, personal policies won’t cover damage should it occur when the vehicle is being used for commercial purposes, so be sure to check your policy.
The cost to insure a landscaping business will vary depending on factors like the value of equipment and the number of employees on staff. To get an accurate idea of what insurance will cost, request quotes from multiple companies and then consider factors like premiums, deductibles, and exclusions when deciding which policy may be right for the business.
Step 10: Hire Employees
As a business grows, the owner may need to bring on additional employees to keep up with the jobs. PayScale states that the average landscaper earns $12.92 per hour or a salary of about $31,576. Landscapers with five to nine years of experience earn about $13.58 per hour, while landscapers with between 10 and 19 years of experience average $14.90 per hour. Late-career employees with over 20 years of experience earn $16.67 per hour.
Many landscapers primarily utilize seasonal or part-time workers unless they are able to work year-round. The struggle is having a pool of reliable workers who will do a good job.
When hiring employees, it’s important to budget for salaries and expenses like paid time off, workman’s comp insurance, and unemployment insurance.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your landscaping business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a landscaping business?
Starting a landscaping business can cost very little for a one-person operation, but it can also cost significantly more for a larger-scale operation. A one-person operation with a small mower, trailer, and some basic tools will cost around $3,000, but a larger business with commercial-grade equipment can cost $60,000 or more to start.
Some common startup costs for opening a landscaping business include:
– Landscaping equipment such as a lawn mower, leaf blower, edger, rake, spreader, hedge trimmer, etc. (many of these can be rented if the purchase price is too high or only occasionally need the equipment)
– Inventory, such as grass seed, fertilizer, and pesticides
– A truck and trailer rental or purchase
– Supplies such as gloves, goggles, safety gear, trimmer line, fuel, etc.
How much does a landscaping business owner make?
The profitability of a landscaping business will vary according to the number of reliable staff, competition, length of grass growing season, and even marketing techniques.
According to Lawn Starter, in 2018, 19 percent of landscaping businesses made less than $50,000 in annual revenue. Twenty-two percent of businesses made between $50,000 and $199,000, while 17 percent of businesses brought in between $200,000 and $499,999. Fourteen percent of businesses made between $500,000 and $999,000, while 24 percent of businesses made over $1,000,000 in revenue.
Long-term contracts can help hold onto customers longer; however, your services have to be excellent and priced fairly for them to renew each year.
Managing the scheduling of work is an important way to reduce costs. Without proper planning, you and your staff are spending too much time getting to and from client’s houses, which needlessly increases payroll and fuel costs.
Are there grants to start a landscaping business?
It’s extremely rare to find a grant to start a landscaping business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What skills are needed to run a landscaping business?
While starting a landscaping business doesn’t require a business degree, certain skills, experiences, and education can contribute to your success.
Experience using machinery and equipment. Landscapers need to be able to drive a truck and large trailer and operate a variety of machines such as zero-turn mowers and string trimmers. Experience using these types of machines can make for an easier learning curve when starting a business.
Mechanical knowledge. Landscaping businesses rely heavily on machines, and these machines require maintenance and can break down. A business owner who has the ability to do their own machine maintenance and even smaller repairs can save money and time over bringing in a professional.
Pesticide certification. Earning a pesticide certification allows a landscaping business owner to offer more services and provide pesticide treatments that are in demand locally.
Physical strength. Landscaping is a physically demanding job. An owner who is physically fit and strong can make an easier transition into full-time landscaping work than someone who is not physically fit.
An eye for design. Whether planning out an eye-catching gazebo layout or determining which colors of flowers would make the best addition to a garden, landscapers need to have an eye for design and an understanding of what looks good.
Knowledge of horticulture. Landscapers need to understand how to cultivate and manage various plants, shrubs, and grasses. With this knowledge, they can better advise their customers and make recommendations that will get customers the results they’re looking for.
Attention to detail. Landscaping is all about details, and landscapers need to always be looking at the details of their work.
Creativity. Landscapers may be tasked with designing gardens or coming up with solutions to problems, making creativity an important skill in this profession.
Staff management skills. If a business owner plans to hire staff, previous experience with interviewing, hiring, training, and managing employees will be valuable.
Customer service skills. Previous customer service experience can help a landscape business owner provide professional communication and address customer concerns.
What is the NAICS code for a landscaping business?
The NAICS code for a landscaping service is 561730.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?