For those that love working outdoors landscaping can be an extremely rewarding business. And while the barriers to entry are relatively low, there are a few things you should know before deciding to take the plunge into this competitive business.
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Starting a successful landscaping business is all in the details. The barriers to entry are relatively low. That's why there are so many different companies out there doing it. But building a highly profitable business takes proper planning, a unique selling proposition, and a solid customer service. We're going to lay out everything you need to know to get started.
Just like any other market the landscaping business is filled with individuals who thought they could invest in a mower, weed wacker, and blower and dominate their local market.
How hard could it be right? After all, we've all cut our own grass at one time or another. So they plop down a few thousand dollars on equipment and a trailer and away they go.
They soon learn that low cost of entry means there is lots of competition and the highly profitable accounts don't just land in your lap. Many end up selling out or giving up after 2 or 3 seasons of servicing low end clientele with low profit margins.
With this in mind, buying an existing company with established accounts can be a great way to break into the market.
You'll be purchasing your equipment at a discount and you'll already have an existing client base that provides cash flow for additional expansion.
Before even considering starting your own lawn service you need to make sure you're in the right mindset. Is providing the ULTIMATE experience for your customer something that drives you? Are you willing to go the extra mile and do things that none of your competitors are doing to create a loyal and passionate client base?
It sounds cliche, but if you're not willing to give it 110% then you may as well just pack up and go home.
Providing excellent lawn care will only get you part way. You need to do it better, faster, more efficiently, and with better customer service than anyone else out there to truly succeed. If you're ready for this level of commitment here's how you should proceed.
This will be your biggest expenditure when first starting out with your landscaping business. Some of the basics you should have are:
One of the biggest mistakes many entrepreneurs make is to buy all of their equipment brand new from the get go. This can be extremely expensive and can force many businesses into debt right from the start. Trust me you'll have plenty of expenses, you don't want to add debt service to that if you can avoid it.
You can find used equipment on sites like Craigslist.com and eBay. When buying used equipment make sure you get the opportunity to inspect it. Stick with brands you trust and that can be serviced in your area.
If you're dead set on buying new equipment you can often find really good deals on Amazon. Even large items such as zero-turn mowers can be delivered to your home (in a crate, just like the dealer gets) and sometimes at a substantial discount to what you would pay at the dealer. For more information check out our zero turn lawn mower reviews.
As you get bigger you'll want to look into software for handling scheduling, invoicing, and other accounting tasks, but to start a simple spreadsheet will work. You can find templates online that allow you to modify the logo. These are quite good enough until you need something faster and more efficient.
The costs of setting up your business with your state, county, or city should be relatively low. You can check with your state's professional licensing department to find out exactly what you'll need. Once you've setup your business with the state you'll most likely be contacted by any other state entity that requires registration.
If you're planning on offering other services such as irrigation (sprinklers) or exterior landscape lighting you will need to find out what licenses and testing are required to get certified. Again your state's professional licensing website should be able to provide you with all the information you need.
Many states require the owner of the business to be licensed for any services they provide. In some instances you can hire someone with the necessary licenses to shortcut this procedure, but just be aware that were they to leave the business, your license goes with them.
Just like you'll be required to have liability insurance on your company vehicle, you'll also need business liability insurance. The cost of insurance varies by state. Many commercial contracts will require $1 million in liability insurance to even bid on their jobs. This sounds like a lot, but your annual cost should be less that $1,000.
Don't be surprised if your insurance costs increase as your revenues increase. From the insurance companies perspective the risk increases with the more work you're performing.
You've got your equipment, your insurance, and all your licensing covered. Now how do you go about driving a consistent stream of new customers? Here are a few simple and effective methods that require very little upfront cost.
This can be something as simple as printing up a couple hundred flyers and dropping them off at every house in your area. This can be a surprisingly effective tactic, but you'll want to give people a compelling reason to try your service for the first time.
This is where having a unique selling proposition comes into play. A special offer is a great way to drive new customers. Offering a 25% discount on their first mow and trim is a good way to start.
While snail mail isn't as fancy as all of the online options now available it is still a highly effective form of marketing. Why do you think you get so much junk mail? If it didn't work, you can bet big businesses wouldn't be investing their time and money into it.
You don't need a large budget to do direct mail. In fact you don't even need to hire someone to do it for you. A great tactic is to send welcome letter to new homeowners that have just moved into the area.
You can get a list of recent house closings in your area from your county's records office. Come up with a compelling form letter that offers them a discount (like the flyer). Since they don't know anyone in the area, they're very likely to reach out to you if they need your landscaping services.
It doesn't need to be fancy. Just use a plain envelope and address it by hand. This DRASTICALLY increases the open rate of the letter. Just make sure the handwriting is neat and legible. You don't want their first impression to be your chicken scratch.
Providing the best customer experience imaginable is a slow growth method, but is the most powerful strategy available to any small business.
Before you cut your first blade of grass make sure to have a referral system in place to ensure that your customers become your biggest advocates. An example might be to offer them 50% off their next service for each referral they send you. It may sound like a lot, but if you're doing your job well one client can bring you many, many more.
While the tactics mentioned above can begin to bring in clients for your business, they tend to be time consuming, and are somewhat limited in reach.
Online advertising allows you to tap into a MUCH larger market. In fact a well designed and executed marketing plan is what separates the big players from the mom and pop operations.
A well designed and informative website is crucial to your online marketing efforts. There are several good resources for building your own page, but it is generally better to invest in a professionally built site.
That's not to say you should spend a fortune on your site. In fact you should be able to get a beautiful site that is properly built, and optimized for search engines for $1,000. If you're having trouble finding a local vendor to do it for you, contact us and we can help you out.
While many landscaping companies have websites, they are often poorly built and look unprofessional. Having a site that is clean and well laid out can quickly separate you from your competition.
Here are a few basics of what your website should contain:
Your website should be the hub of all your online activity including social media, advertising, and email marketing. It should reflect the work and reputation of your business. As such it should look professional and should be regularly updated.
SEO or search engine optimization helps your website show prominently when potential customers search for things like "landscaping in your city" or "landscape design your city". Obtaining good exposure in Google, Bing, and Yahoo requires a combination of good on-site content, clear branding, and off-site work.
Local SEO providers charge based on a variety of factors including competition within the market, size of the market, and a host of other factors. While search engine optimization services can be expensive, it should be looked at as an investment rather than an expense.
Your site is an important asset that should generate a steady stream of leads for your business. That being said, it's important to target the right type of customers and the right type of search engine queries to ensure you get the biggest ROI.
The best companies will look at the lifetime value of each customer you acquire and ensure that you are spending only a fraction of that amount to obtain them as a new client. Let's look at an example.
Let's say an average lawn maintenance job nets you $40/week and is performed 28 weeks per year. Your annual revenue from that job is $1,120. If your customer service is up to snuff they might remain a client for 5 years or more. So they're lifetime value to your business is $5,600.
Now let's say you spend $2,000 per month for your optimization services. Once your site is ranking well it brings in 30 new leads each month on average. An average close rate would be around 30%. So for $2,000 per month you're obtaining 10 new customers each month with a combined lifetime value of $56,000. If you're running at a 20% profit margin this works out nearly 100% ROI.
Once you start looking at higher margin work like landscape design, exterior lighting, and irrigation, the ROI can improve significantly.
Search engine marketing or PPC (pay per click) is paid advertising. You pay search engines to give you prominent placing when potential customers search for your services. Every time they click on your ad, you are charged a predetermined amount.
SEM can be a very effective strategy, but is more nuanced than most small business owners know. Spending money on ads that send traffic to your website is no longer a cost effective strategy. Instead it is more effective to send the traffic to a landing page that is designed to convert that traffic into a phone call or email contact.
Local digital marketing agencies can help you setup high converting ads, landing pages, and auto-responder sequences that maximize your ROI from online ads. If you're interested in learning more about PPC for landscaping businesses feel free to contact us here.
Most local businesses have figured out that you need to have a Facebook page. It's a great place to update your clients on recent work you've performed, company news, and landscaping news in general. But you can also target people in your geographic area with ads while they're browsing their news feed.
Like PPC, Facebook ads require a good bit of skill to work effectively. Many a business owner has dropped a couple hundred dollars on ads with no results and quickly given up. This is leaving a VAST market completely untapped.
Facebook allows you to target potential clients based on a wide variety of interests, home value information, salary information, marital status, and a whole lot more. In fact it's downright creepy how much information you can use to get in front of potential clients.
As with PPC it's more effective to send this ad traffic to a specially designed landing page that ensures the highest conversion of paid traffic into paying customers.
There are a plethora of websites that specialize in highlighting local service businesses. Yelp, Angie's List and Houzz are three of the most popular.
It's important to create a profile on each of these sites and others. This helps your business show up in as many places as possible. Some potential customers will start their search on one of these sites as they know that there will be honest reviews of the business for them to reference.
Be sure to include all of your contact information, website, pictures of your work, and work history in your profile. This helps you to appear higher in the rankings within each of these sites.
It's crucial that you update your listings on a regular basis and respond to reviews both good and bad so that those browsing your listing see that you are engaged and respond in a timely manner to feedback from your customers.
As if there wasn't enough for you to manage, you'll also need to create a Google My Business (GMB) listing. This can be done here.
Type in the name of your business along with address. If it shows up as a listing make sure to claim it. Otherwise create a new listing. They will either allow you to verify it online or will send a postcard to the address you listed. Once you receive the postcard you simply enter the verification code and the listing will be active.
You'll want to update your listing with all of the correct NAP (name, address, phone number) info of your business. Enter the URL of your website. And enter a description of your business. It's important to not spam the description by filling it with a bunch of landscaping terms. It's best to use each term only once at most. Here's an example of what one might look like:
"Brilliant Designs is a landscape design and maintenance company that offers a wide variety of services including outdoor low voltage lighting, irrigation and sprinkler installation, power washing, and basic lawn services. We serve both commercial and residential customers."
You can also include links to your Facebook page, Youtube channel, or other social media accounts within the description.
Now that you've got all your online ducks in a row, you're ready to move on to the next steps including how to price landscaping services. If your looking for more tips on how to start a landscaping business check out some of our other articles.
Jason is a work from home dad who has a passion for DIY projects, yard work, and SEC Football. His background is IT, but he's always fancied himself as a part-time ship welder, landscaper, and short order cook. During the week he can be found on his laptop 10 hours-a-day, but on the weekends he escapes to the local DIY Cave to play with REAL toys. You can also find him on Facebook, Twitter, and can contact him via email.