If you're looking to start a landscaping business, you've picked an exciting and potentially lucrative industry.
According to the National Association of Landscape Professionals, the landscaping industry in the US is worth around $100 billion and has had steady growth over the past five years.
However, starting a successful landscaping business is hard work. If you’ve ever had to maintain a yard or property, you know the time and attention needed to keep it up.
On the business side, navigating, establishing, and scaling a landscaping business presents unique challenges and opportunities at every step.
The value of starting a landscaping business
Starting a landscaping business can be an excellent opportunity to grow your passion for outdoor work into being your own boss and creating a profitable business.
We connected with expert landscaper Armand Luisi of Scenic Isle Landscaping to get tips from his over 40 years of experience. Luisi started offering lawn care services mowing lawns as a teen, developed a highly profitable landscaping business over time, and reported bringing in revenue in the millions last year.
“You can make a lot of money if you hustle, are professional, and do consistent work,” explains Luisi.
There are many benefits to owning your own company and a lot of learning opportunities too. Aside from flexibility, growing your own landscaping business can lead to a positive impact on the environment, personal fulfillment, and growth opportunities. Let’s get started.
How to start a landscaping business in 6 steps
There are 6 main steps to consider when starting a lawn care business:
1. Conduct market research
Conducting market research is an important first step in starting a landscaping business. This can help you identify the services, target market, and competition in the area. Use these steps to begin your research:
- Define your customer
- Identify competitors in the area
- Determine the demand for services
- Research market trends: What’s the latest technology? For example, is there a new method of hedging popular among your target market?
- Consider pricing and revenue opportunities
By conducting thorough research, you can gain valuable insight into the landscaping industry in your area and make important decisions about how you want to position your own business in the market to see success.
Here are some commonly asked questions that Luisi provided expert advice on.
How much does it cost to start a new landscaping business?
Costs can vary widely depending on your region and the services you’d like to provide. However, new business expenses can be as little as the cost of a mower and materials to market. Just keep in mind that as you gain more clients and do more complex jobs, you’ll need to take on additional costs to scale and stay profitable.
How do you set your prices as a landscaper?
When asked about pricing, Luisi recommends researching your area and setting your prices based on your market. “Take the market average,” he explains. “See what other landscaping companies charge per square foot for cutting grass and set your price in that range.
As you get more experienced, make yearly increases according to the economy. In 2022, we had to raise our prices by 15-20%. We had no choice.” Luisi also had some specific tips for making bids on jobs. “Don't bid on stuff when you don’t know what you're doing or don’t have a proper license for,” Luisi explains. “It happens a lot. People will underbid the competition or take jobs they can’t do–and it can really cause damage to their reputation.
A lot of times, if we get underbid by a competitor, we end up getting the job anyhow because the person who originally got hired wasn’t able to do the work.”
How profitable is a landscaping business?
Profit margins for professional lawn care services can range between 10-30%. “Try to work on a 20% margin,” recommends Luisi. “Be sure to do the numbers. Personally, I take less for myself because I run a family business and choose to reinvest in my business, but you’ve got to be intentional and know your numbers.”
2. Determine service offerings
When it comes to landscaping, there’s a long list of services you can provide:
- Lawn mowing and maintenance
- Pruning
- Hedging
- Leaf removal
- Fertilizing
- Edging
- Mulching
- Seasonal cleanup
- Tree and shrub pruning
The list could go on. Being specific about your offerings will help you determine what equipment you need and whether you should rent or buy items.
Offer the services your market needs and diversify as you grow
While you may want to keep your services list simple initially, listen to your clients and diversify as you grow to keep business robust year-round.
“Diversification is the biggest thing to be successful,” shares Luisi. “When I started, I could make good money in the summer, but winters were slow. Eventually, I thought, ‘Let’s do snow, too.’ We started small, and now it’s a significant part of our revenue.”
Diversifying your services looks different for every business, but keep an eye out for how to best serve your target market. “For example, if you’re doing lawn services, look for other helpful work you can provide,” explains Luisi. “Do they need fence repair, gutter cleaning, tree services, or other maintenance?
If someone needs help fixing the fence, learn how or find someone to help you. If you hire a subcontractor, set your prices to pay them fairly and ensure your margin also leaves a cut for your business.
Consider transportation, landscaping equipment, and fuel
In most cases, starting small and expanding services as the business grows is best. Here’s a breakdown of landscaping equipment you may need and their estimated cost:
- Mower $300 to $2,000
- Rake $12 to $40
- Edger $88 to $300
- Blower $80 to $320
- Safety goggles $10 to $30
- Hearing protection or noise-canceling headphones $30 to $350
- Steel-toed boots $75 to $150
- Gas can $15 to $20
- High-quality work gloves $20 to $40
- Reliable transportation like a pickup truck $10,000 to $30,000+
It’s important to factor in fuel as a regular business expense, as you’ll need to regularly fuel up any gas-powered equipment. Many landscaping professionals travel significantly, so building effective routes and using a more fuel-efficient vehicle can help reduce costs.
3. Register for business insurance, licenses, and an employee identification number (EIN)
While you may want just to get out there and start working, you’ll also need to make sure you have business insurance, licenses, and an employee identification number to ensure you don’t run into problems down the road.
Getting these items is relatively straightforward and can even be done quickly.
“I recommend being fully licensed and insured from the start,” advises Luisi. “And when it comes time to hire people, get workman's compensation and make sure everything is compliant and legal.”
Landscaping business license
What licenses do landscaping businesses need? Requirements vary by state (and sometimes county or town). They can also vary depending on your scope of services.
Check what your area requires and know that you may need proof of insurance as one of the requirements necessary to receive your landscaping license. “You don’t want to get dragged down by fines or run into problems with cities or counties,” explains Luisi. “Make sure you get licensed as soon as possible."
Employee identification number
Next, you’ll need to register with the IRS and federal government to get a number for withholding taxes. In addition, most states require you to collect and pay sales tax on services completed.
You’ll need to choose a business structure that suits your needs. Sole proprietorship and limited liability company (LLC) are two of the most common forms.
An LLC tends to provide more legal protection to the personal assets landscaping business owners––you’re only liable up to the amount you’ve invested in your company.
Be sure to do your research and pick the option that best suits your needs. Check your state’s department of taxation to find the requirements for your area. Also, consider opening a business bank account early to simplify tax time and separate personal and business funds.
Business liability insurance
General liability insurance is a must. It protects you from everything from legal fees to damages costs if you or an employee makes a mistake on the job.
Things like broken sprinklers from a lawn mower can happen and you want to protect your business. “Also, many good clients don’t want you working on their property without all the proper insurance,” says Luisi.
Employment law liability insurance
Another basic form of insurance you’ll need as you grow your landscaping business is employment law liability. If you make any mistakes calculating overtime, this covers your business, helping you avoid wage and hour violations.
Having this insurance, especially as you start to work with subcontractors or hire employees, can save you from potentially huge fines if the Department of Labor audits you if they determine you haven’t paid employees correctly.
4. Create a landscaping marketing plan
Now it’s time to start bringing in your first customers. Developing plans will help keep your business recognizable and build rapport with the community.
Define your brand
Develop a brand identity for your landscaping company that reflects your business's values. This will also help you stand out from the competitors in your area. Your brand should consist of a business name, logo, and tagline.
Invest in a professional image
Luisi emphasized the importance of establishing a professional brand from the start. “Professional appearance means a whole lot,” Luisi says. ”There’s no way I would have gotten all these commercial clients without that.
You can't drive up in a truck that's falling apart with broken-down equipment. I see landscapers driving around in junk wagons––it hurts their brand. All my trucks and trailers are lettered and my guys are in branded shirts. We don't look like a ragtag crew. We have good equipment and consistently do quality work.”
Social media marketing
Facebook, Instagram, and other popular social media networks are great places to get the word about your business.
As you begin thinking about your demographic and the services you will provide throughout spring, summer and fall, it is important to consider what the off season looks like. Do you experience winter where you live? If so, as temperatures drop, what types of off-season work could you provide?
Types of off-season work for landscape business owners could include:
“Doing great work and getting word-of-mouth recommendations is important,” says Luisi. Building up reviews will take time but be sure to ask your customers to leave you online reviews so you can build up your online presence.
Some other marketing opportunities include referrals and local advertising (newspapers, magazines, community newsletters).
5. Get finances in order
Staying on top of your finances is essential as you get up and running with your landscaping business. Fortunately, these days that’s easier than ever with various accounting and invoicing software to help you keep operations running smoothly. Various apps can also help you run everything from scheduling appointments to managing payroll.
Be mindful of your operating costs
While overhead can be reasonably low when running a one-person business, it’s essential to calculate your overhead and ensure you price your services to cover expenses and earn a profit on all jobs. While it may sound obvious, be careful not to overbuy equipment, hire subcontractors you don’t need yet, or otherwise put yourself in a position to lose money.
As you begin making a business plan, consider writing out upfront landscaping business expenses. These might include:
- Renting or purchasing equipment
- Advertising services
- Registering your company
- Truck or vehicle
- Trailer
Keep cash flow strong and give your customers easy ways to pay
It’s also helpful to set up good bookkeeping and an invoicing and payments strategy to ensure you keep positive cash flow and get paid promptly. Invoice promptly via email or SMS to avoid the delays and hassles of paper checks. If you’re a BILL subscriber, you can set up automatic payment reminders and avoid chasing payments.
Accepting various payment options, like ACH bank transfers, credit and debit cards, or PayPal is also helpful. “Scenic Isle is a zero cash business now,” says Luisi. “You’ve got to simplify your operations and not wait for checks.
ACH payments help us get paid quickly and keep cash flow strong all month since clients pay at different times. You’d be surprised, but many landscapers forget to send invoices, so it’s crucial to develop a system to invoice and get payments from your clients quickly.”
6. Plan for off-season work
As Luisi explained, “with some of my shopping center contracts, we do everything. We cut the grass, take care of the parking lots, do snow plowing, painting, graffiti, power washing–everything. That way, when one thing is slow, others are busy.”
As you begin thinking about your demographic and the services you will provide throughout spring, summer and fall, it is important to consider what the off season looks like. Do you experience winter where you live? If so, as temperatures drop, what types of off-season work could you provide?
Types of off-season work for landscape business owners could include:
- Gutter cleaning
- Seasonal light installation
- Snow removal
- Paving and paver-edge work
- Pressure washing
- Winter lawn prep (draining sprinklers, wrapping young trees, planting bulbs etc.)
Automate your finances and simplify invoicing with BILL
Looking for ways to simplify operations and keep cash flow strong as you start your own business? BILL can help you easily create custom invoices that fit your brand and make it easy for customers to pay by credit card or ACH via our intuitive payment portal.
Easily track payment status and automatically send payment reminders so you can stay focused on growing your business. Learn more about all the ways BILL can help your business thrive.
