January 19, 2022 by Laura Renae
Some would say that starting a landscaping business is as easy as buying a lawn mower and selling your services to those who are willing to buy them. And when you think about it, it’s no secret that 11-year-olds have been making profits from lawn care for as long as anyone alive can remember. Though lawn care and landscaping go hand in hand, starting a landscaping business may not be quite as easy.
Landscaping can include a range of services like your basic regular lawn maintenance or edging to more advanced projects like installing a retaining wall, laying a walkway, or designing a backyard oasis.
In today’s article, I want to share with you how you can go about starting your own landscaping business with the potential to make $100,000+ per year in profits.
We have created a landscaping business income and expense excel spreadsheet that is perfect for helping you start a landscaping business. We have a video that walks you through how to fill out our landscaping financial projection template below.
Now that you’ve had a chance to look at the income and expense excel spreadsheet, I want to go over some of the most important things to consider, as well as some of the more common questions and concerns a new landscaping business owner may have regarding generating sales, tracking expenses, and ultimately making a profit.
How Much Does It Cost to Start A Landscaping Business?
The startup costs for a landscaping business will vary depending on what professional services you want to provide as a landscaping business. There are a lot of services that fall under the umbrella of landscaping, so your first order of business will be to narrow down what services you are qualified to provide, which ones you may need or want to get certified for, and which ones are out of the question. Once you figure out your particular service offerings, it’ll be easier to figure out what equipment you’ll need and, ultimately, how much money you’ll need to start your new landscaping business.
For the purposes of this article, we are going to base our expense estimates on the assumption that your new landscaping business offers some of the more common services without going too deep into specialized services.
BASIC EQUIPMENT NEEDED TO START A LANDSCAPING BUSINESS
- Riding Lawn mower ($2450 average price)
- Edger (avg $150)
- Weed eater ($200 for midrange battery powered)
- Truck ($15,000-$25,000 to buy–for this example, this would be for a 2010 Chevrolet Silverado), if financing, account for a $2,500 down payment
- Utility trailer ($1500 if purchasing outright)
- Shovel ($15-$30)
- Rake ($15-$30)
- Tiller (midrange, $350)
- Wheelbarrow ($50-$100)
- Storage unit ($150-$200)
- Miscellaneous tools (budget for an additional $1500-$3000)
OTHER EXPENSES TO ACCOUNT FOR
- Business license (this can cost anywhere from $50-$300 depending on several factors including size of business, location, industry, and state where you are starting your landscaping business)
- Necessary certifications (particularly, if you’re a landscape designer, you may need more training, and you may need additional certifications if you want to provide specialty services)
- Plates, taxes, and registration fees for truck ($1000-$1100)
- Contractors license (varies depending on the state and type, $50-$200)
Based on our research, we calculate that you may need anywhere from $15,000 (if you’re financing a truck) to $30,000+ (if buying your truck outright) to start your landscaping business. That number is based on average prices for the listed equipment and will vary depending on whether you choose to buy lower-end equipment, higher-end equipment, or if you choose to rent your equipment to start.
We highly recommend utilizing our landscaping business income and expense spreadsheet to weigh your options and see what route will best serve your landscaping business goals and get you started.
What are the Operating Expenses for a Landscaping Business?
Once you have figured out how much cash you’ll need to start your landscaping business, you’ll need to consider what it’s going to cost to operate your business on a monthly basis. There are a number of expenses that will have to be paid no matter how much or how little work you book in a month.
Some of the fixed expenses you can expect may include:
- General Liability Insurance ($50/mo)
- Advertising & Marketing (depending on strategy–perhaps $1,000/mo)
- Contractor’s tools and equipment insurance (avg $17-$69 depending on location)
- Equipment rental costs (if equipment not owned)
- Rental of storage facility for equipment (Approx $150/mo)
- Workman’s comp
- Health Insurance
- License renewals (yearly)
- License Plates (yearly)
- Permits (yearly)
Likewise, you’ll have to consider the variable expenses and possibly plan and save for some unplanned expenses. Some of the variable expenses may include:
- Upkeep/Maintenance of equipment (if not rented)
- Replacing faulty or broken equipment (varies)
- Gas/fuel for equipment
- Fuel for transportation
As with any business, much of these expenses will depend greatly on the choices you make when starting your new landscaping business. You’ll have to choose what types of insurance coverage you actually want to purchase, or whether renting or buying equipment will work best for you. Insureon.com has a great reference article for gathering information about different types of insurance and what kinds of protection they provide for a landscaping business owner.
Our estimates lead us to say that you may want to budget for about $4,000 of fixed monthly expenses, and a safety net of $1,000 for those variable expenses. Of course, our projection template spreadsheet is a resource intended to help you make solid estimates for how much it will cost you to run your landscaping business so that you can include solid financial projections in your business plan.
How Much Can a Landscaping Business Generate in Sales?
Calculating revenue for a new landscaping business may present more challenges. There are a lot of factors that need to be considered when trying to calculate what you can make in sales in your first and even second year of business.
The amount of revenue you can generate is going to depend deeply on the services you provide, what you charge for your services, how many clients/projects you can serve in a month, size and scope of landscape projects, and how many employees you have under your hire.
If you’re looking to make a certain dollar amount in sales, you’ll need to make some decisions about pricing. Forbes Advisor has a very helpful article out that can help you get some insight into average costs of landscaping projects, and the average cost for the manpower it takes to complete the project.
Whether that’s a few large projects or many smaller projects/contracts, you’ll have to set that goal and decide what that means for your business. You’ll also need to figure out how many months out of the year you’ll actually be able to do landscaping projects. The winter months don’t lend themselves to landscaping, so you may have three months in there that you don’t get much work. Or on the other hand, you may need to turn to a different service offering during the winter, such as snow removal or salt services.
There are a lot of variables and factors to consider when it comes to how much you can make from your landscaping business. Using our landscaping business sales projection spreadsheet will allow you to change variables and see how your projected income will change.
How Much Profit Can Your Landscaping Company Make?
Much like your sales revenue, your yearly profits will vary based on the particular circumstances of your landscaping business.
According to Lawn Care Millionaire you ought to be able to earn between 5 and 20% profit margin in the lawn care and landscaping business. In order to earn a $100,000 profit you would need to generate at least $500,000 in annual sales.
Take some time to fill out our landscaping financial projection template with your specific business assumptions and see how much potential profit you can earn based on your business plan.
Landscaping Business Frequently Asked Questions
There are a lot of questions surrounding the start of a landscaping business. We would like to address some of the most frequently asked questions we came across in our research.
- What’s the difference between lawn care and landscaping?
Lawncare and landscaping have many similar qualities, and share some of the same services, but they are different in nature and purpose. In general, lawn care is just that; it is the upkeep, care, and maintenance of one’s yard/lawn. Landscaping, on the other hand, is geared more toward design and transformation. If you are looking to provide services that fall solely under the upkeep umbrella, you may be leaning more toward a lawn care business. But don’t be fooled, many landscaping companies will offer lawn care and maintenance services, as well as their transformation and design services. This allows the landscaping company to keep clients and regular business, as well as to maintain the integrity of their landscaping design.
- What are basic landscaping services?
Once you know that there’s a difference in landscaping versus lawn care, it’s
good to know which services fall under landscaping. Some of the basic services that you might see offered by a landscaping business include:
- Pruning/Trimming (trees, shrubs, bushes, etc.)
- Installation (walkways, pea gravel, retaining walls, flower beds)
- Irrigation systems
- Seasonal displays
- Landscape Design
- What should I charge for my landscaping services?
Earlier we mentioned the Forbes Advisor article that is a great resource for finding information on the average prices of landscaping projects. They do a great job of breaking down the other cost elements of landscaping projects as well. According to Forbes, landscapers generally charge an average of $50-$100 per hour for landscaping projects requiring two landscaping technicians, and 80% of the cost of landscaping is to pay for said labor. Though some landscapers may be able to charge more for their services if they are also designing the project, $50-$100/hr is a good baseline. Something we urge you to keep in mind, however, is that prices may vary from project to project due to size of property and scope of project. Not all landscaping projects are created equal.
There are a lot of things to consider when looking to start a landscaping business. So if you want to see exactly how your numbers would work together for starting your landscaping business, we recommend you take a few minutes to watch the video that will walk you through our financial projections demo.
And of course, if you have any questions about how our expense spreadsheet works, feel free to reach out at firstname.lastname@example.org