The landscaping industry is hugely lucrative but only for those who run their business the right way.
I started my landscaping business in 1997, and during those 25 years, I`ve learned the mistakes to avoid, all of which I want to share with you today.
Avoid them, and you could create an evergreen business that provides you a handsome income and job satisfaction for years to come.
1. Not correctly pricing services
The first mistake you must avoid is charging too little or too much because both could put you out of business.
To find the right price for your services, ensure to research materials and labor costs in your area and charge appropriately to make a profit.
When pricing your landscaping services, there are a few key factors to consider:
- Costs of materials: This includes the cost of plants, mulch, soil, pavers, water features, all groundwork aggregates, and any other materials needed for the job. Be sure to factor in the delivery price and any additional costs associated with purchasing materials.
- Labor costs: This includes the cost of wages, benefits, and any additional labor-related expenses.
- Overhead costs: Includes expenses such as rent, utilities, insurance, and any other costs associated with running your business.
- Local market rates: Research what other landscaping businesses in your area are charging for similar services. It will give you an idea of the competitive market.
- The complexity of the job: Large, complex jobs will require more time and resources and may require higher pricing. The key is to charge your worth!
Once you have considered these factors, you can set your prices accordingly. It’s also essential to review and adjust your prices periodically to ensure that you’re still competitive and making a profit.
2. Failing to plan for seasonal fluctuations
Many landscaping businesses experience a slowdown during the winter months. Plan for this by saving money during the busy months to cover costs during slower times.
How to plan for seasonal fluctuations as a landscape gardener:
- Plan by budgeting for slower months: During the busy months, set aside extra money to cover expenses during the slower months.
- Diversify your services: Offer a range of services such as lawn care, tree trimming, garden maintenance, and snow removal to provide income during the winter months.
- Network with other professionals: Building relationships with other professionals in the industry can lead to potential job referrals during slower times.
- Plan for seasonal promotions and discounts: Offering special promotions or discounts can help attract new customers during slower months.
- Develop long-term contracts: Long-term contracts with repeat customers can provide a steady income stream, especially during the slow months.
- Use marketing strategies to promote your services: Use social media, flyers, and other marketing strategies to promote your services and attract new customers.
- Be prepared for unexpected weather: Be ready for unpredictable weather events that may change the usual pace of your business, and have the plan to handle them.
Look into alternative revenue streams: Consider alternative revenue streams such as renting out equipment or offering consulting services to other landscaping businesses.
3. Not investing in proper equipment
Proper equipment can save time and money in the long run and can make the difference between a professional-looking job and a mediocre one.
How to invest in proper equipment as a landscape gardener:
- Determine your needs: Before investing in equipment, list the tasks you will be performing and the equipment needed to complete them to determine what equipment is necessary for your business.
- Research equipment options: Once you have a list of the equipment you need, research the options available. Consider factors such as cost, durability, and ease of use.
- Look for used equipment: Used equipment can often be a cost-effective option, but inspect it for wear and tear and have it serviced if necessary.
- Invest in quality equipment: While it may be tempting to go for the cheapest option, quality gear can save you money in the long run by reducing the need for repairs and replacement.
- Consider financing options: If you can’t purchase the equipment outright, consider financing options such as equipment loans or leases.
- Properly maintain your equipment: Regular maintenance and cleaning of equipment can prolong the life of your equipment and reduce the need for costly repairs.
- Keep track of equipment inventory: Keep track of the equipment you have when it was last serviced and when it needs to be serviced again to ensure it is always in good working condition.
Consider safety features: Invest in equipment that has safety features such as rollover protection, seat belts, and brake systems, and make sure all your equipment meets the safety standards.
4. Not building a solid customer base
Strong customer relationships are key to repeat business, so invest time building and maintaining good relationships with clients.
How to build a solid customer base for a landscape gardening company:
- Offer excellent customer service: Ensure you exceed customer expectations by going above and beyond to meet their needs to build trust and loyalty.
- Build relationships: Take the time to get to know your customers and understand their needs, as you can then tailor your services to meet their requirements.
- Communicate effectively: Keep customers informed throughout the process, from the initial consultation to the final walk-through, to ensure that the customer loves your work.
- Follow up with customers: After you finish a job, follow up with the customer to ensure they`re satisfied with the job and address any concerns they may have.
- Use word-of-mouth advertising: Encourage satisfied customers to spread the word about your business. Positive word-of-mouth advertising can be a powerful tool for building a solid customer base.
- Leverage online reviews: Encourage customers to leave positive reviews online and respond to negative reviews professionally and courteously.
- Offer incentives: Offer incentives such as referral discounts or loyalty programs to encourage customers to continue doing business with you.
Invest in customer retention: Check in with your customers and offer them special deals or promotions to engage their interest in your services.
5. Not having a proper business plan
A clear business plan will help you stay focused and on track and make it easier to secure financing or investors if needed.
A business plan for a landscape gardening company should include the following key elements:
- Executive Summary: An overview of your business, including its mission statement, the services you offer, and your target market.
- Industry Analysis: Describes the landscape gardening industry, including trends, growth prospects, and competition.
- Market Analysis: An analysis of your target market, including demographics, size, and local landscaping needs.
- Service and Product Line: Outlines your business’s services, products, and prices.
- Marketing and Sales Strategy: Details of your marketing and sales strategy, including how you plan to reach your target market and generate leads.
- Operations and Management: Outlines the day-to-day operations of your business, including the management structure, the role of key personnel, and your business location.
- Financial Projections: Financial projections, including income statements, cash flow projections, and balance sheets.
- Conclusion: A summary of the critical points of your business plan and describe your company’s future growth prospects.
It’s also important to remember that a business plan should be a living document and reviewed and updated as your business grows.
6. Not keeping accurate financial records
Keeping accurate financial records can help you identify areas where you may overspend or need to be charging more.
How to keep accurate financial records for a landscape gardening company:
- Keep track of all income and expenses: All money received from customers and all money spent on materials, labor, and overhead costs.
- Use accounting software: Use software such as QuickBooks or Xero to keep track of financial records. This software allows you to track income and expenses, generate reports, and send invoices.
- Separate business and personal finances: It’s essential to keep your business finances different from yours to make it easier to track income and expenses.
- Keep receipts and invoices: Keep all receipts and invoices of business purchases because you can use them to support income and expenses reported on your tax return.
- Generate financial reports: Generate financial information such as balance sheets, income statements, and cash flow statements to get an overall picture of the financial health of your business.
- Monitor cash flow: Keep a close eye on your cash flow to ensure that your business has enough money to cover expenses.
- Hire a professional: Consider hiring a professional accountant to help you set up and maintain your financial records and to ensure that your bookkeeping is accurate and compliant with local laws and regulations.
- Review and update records: Review your financial records periodically and update them as needed to ensure they remain up-to-date.
7. Not having the proper licenses and permits
Not having the correct licenses and permits to trade in your location can result in fines and even the closure of your business, so don`t skip this step.
The specific licenses and permits required to run a landscape gardening business will vary depending on the location and regulations of your state or municipality.
Here are some standard ones most landscape gardening businesses may need:
- Business license: Most states and cities require a business license to operate in their jurisdiction.
- Contractor license: Some states require a contractor’s license(depending on income) to perform landscaping work. You can get it through a state licensing board.
- Sales tax permit: If your business sells goods or services subject to sales tax, you must get a sales tax permit.
- Pesticide applicator’s license: If your business applies pesticides, you`ll need a pesticide applicator’s license.
- Irrigation contractor’s license: Some states require a license for installing and maintaining irrigation systems.
To avoid fines, check with your state or local authorities to determine which licenses and permits you’ll need for your business.
8. Not carrying enough liability insurance
Landscaping can be dangerous work, and it’s vital to protect your business with liability insurance.
The liability insurance you need as a landscape gardener will depend on several factors, including the size of your business, your services, and the potential risks associated with your work.
As a general rule, landscape gardeners should carry liability insurance with at least $1,000,000 in coverage. This coverage level will help protect you and your business in case of a lawsuit or claim.
However, it’s essential to remember that the specific amount of liability insurance you need will depend on various factors, including the size of your business, the services you offer, and the potential risks associated with your work.
Consult with an insurance agent or broker specializing in landscaping business insurance to determine the right coverage for your business. They will consider your business’s specific risks and exposures and help you find the coverage that best fits your needs.
9. Not having workers comp or vehicle insurance
Besides liability insurance, you`ll need workers’ compensation insurance to run a landscape gardening business.
Workers’ compensation insurance can provide coverage for employees suffering injuries injured on the job.
Consider other types of insurance, too, such as vehicle insurance for any vehicles used for business and equipment insurance for any expensive tools or machinery used during work.
Starting a landscaping business isn’t rocket science but running a successful one takes hard work, initiative, and experience in what to avoid.
You now know the pitfalls.
Start slowly and fertilize your business with the right strategies because when you do that, it`ll keep growing.