Can you picture making a profit by keeping the lawns of homes and businesses in your area looking their best? Youâre not alone. For many aspiring entrepreneurs, starting a lawn care business sounds like a practical and achievable way to make money and be their own boss — a dream come true, in other words. If youâre reading this, youâre ready to take the next step toward making that dream a reality.
Starting a lawn care business seems easy. Just grab up some lawn equipment, find a couple of guys willing to do physical labor, and get started, right? Not exactly.
Like any other small business, building a successful lawn care business takes careful planning and hard work. You have to be willing to put in the time, effort, and money required to start and grow your business. A lawn care business may have low overhead and lower initial risk than other types of businesses, but it isnât a cake walk. However, over time, youâll begin to see the fruits of your labor through the beautiful lawns in your city or town and the profits sitting in your bank account.
In this guide, weâll break down the steps for starting your own lawn care business. Weâll start off with the importance of your business plan and what it should include. Weâll go over what you need to get started — and itâs more than just lawn equipment. Weâll talk about the costs youâll encounter and how to get the financing to cover those costs. Weâll also discuss ways to bring in customers â¦ and profits.
Letâs get started!
Create A Business Plan
Every business is different, but all businesses need one thing to be successful: a business plan. Your future lawn care business is no exception. Even if your business concept seems simple, having a solid business plan in place is a necessity.
Think of your business plan as a roadmap of your business. You wouldnât go on a long trip without a map or GPS, or put together a complicated piece of furniture without instructions, right? View your business in the same light.
Your business plan outlines your goals for the future. In other words, how will you get from where you are now — a startup business — to your goal? Every entrepreneur has a different goal. Maybe yours is to make $1 million in revenue within five years. Maybe itâs to expand throughout your state. Maybe you want to build a franchise that will go nationwide. No matter what your goals are, they need to be outlined in a solid business plan.
All business plans are different, but there are a few key sections that should be included in all plans. Those include:
- Executive Summary: A short summary of your business plan and the value proposition of your business
- Business Description: What does your business do? Include your mission statement and when your business was formed.
- Organization: Who are your team members and what do they do within the organization?
- Market Analysis: Include information about the market and your competition
- Marketing Strategies: How do you plan to market your business to draw in customers and bring in profits?
- Financial Projections: Use revenue growth and market trends to project the financial outlook of your business
Not only is your business plan critical to the growth of your company, butÂ itâs also an absolute necessity if you plan to seek funding from outside sources — such as investors or banks — in the future.
Determine What Equipment You Need
To operate a lawn care business, you need to have the right tools and equipment for the job. While you may start off small and add to your inventory as your business grows, there are a few critical pieces of equipment you need to get started. For most lawn care businesses, major equipment includes:
- Riding Lawnmower
- Push Lawnmower
- Hedge Trimmer
- Leaf Blower
- Equipment Trailer
For your business, youâll also need equipment thatâs less expensive but just as critical to operations. This includes:
- Lawn Tools
- Hand Tools
- Lawn Bags
- Eye/Ear Protection
- Gas Cans
- Garden Hoses
You should expect to spend approximately $30,000 to $40,000 for the equipment you need to start your business. As your business grows, of course, youâll need additional capital for the purchase of more equipment. For example, you may have just one truck, trailer, and mower for now, but if you have additional crews taking on jobs all over the area, youâll need more equipment.
You may even opt to offer additional services — installing sod, laying mulch, or planting flowers — all of which require additional equipment and supplies. For now, however, focus on the equipment listed above. Those items will be most critical to getting your business off the ground.
Calculate Startup Costs
With an idea of the type of equipment you need to launch your business, you can now begin calculating startup costs. This will include the cost of your equipment, plus other necessary expenses to keep your business operating smoothly.
Your equipment will make up the bulk of your costs, and you should budget approximately $30,000 to $40,000 for these purchases. You may be able to get started with a smaller investment by purchasing used equipment. However, purchasing used does come with its risks. Older trucks can break down and previously-owned lawn equipment may immediately require servicing or repairs. While you can save money in the short term by buying used equipment, you may rack up additional expenses over the long term, so consider your purchases carefully.
When purchasing your equipment, shop around. Look online and visit local retailers to get estimates of costs. Determine what equipment you really need now and what you could add as your business grows. You may even consider starting with basic equipment (do you actually need that fully-loaded riding mower right this minute?) and upgrading your equipment when your business starts bringing in revenue.
Beyond the equipment weâve already discussed, youâll need additional supplies for your business. This may include chemical weed killers, pesticides, fertilizer, and other supplies. You may purchase these supplies upfront, or you may purchase them when needed. If you plan to keep inventory, you may incur additional costs if you rent storage for your supplies and equipment.
Another big startup cost to consider is the cost of insurance. You will need to have auto insurance on your truck. You will also be required to carry liability insurance. If you hire employees now, additional costs may include workmanâs comp insurance and payroll taxes. Other startup costs include fees for permits and licenses. Weâll discuss obtaining licenses and permits a little more in the next section.
If youâre starting small as a one-person operation, your primary startup costs will be your equipment, supplies, insurance, and marketing costs. Just remember to take your time to do your research, plan, and budget to keep startup costs under control.
Register Your Business
Before you begin operating, you’ll need to register your business. There are several steps required to register a new business:
Choose & Register Your Business Name
While you may choose to operate your business under your own name, most small business owners choose a trade name. This name will need to be registered in the state where you will operate.
When choosing your name, you want to select one that is a reflection of your brand. You will also need to make sure that you select a name that is not registered by someone else in your state. You can find your stateâs registration database with a quick online search.
Choose Your Legal Structure
One of the first steps in setting up your business is determining your legal structure. Your legal structure determines how much you pay in taxes and your personal liability for your business. Legal structures include:
- Sole Proprietorship: This gives you full control over your business. You do not have to register this type of entity, so you skip over all the paperwork. However, this structure does not separate your personal assets and liabilities from those of your business. This means that you can be held personally liable for all debts and obligations of your business.
- Partnership: This structure is the simplest structure for businesses that have two or more owners. A limited partnership (LP) gives one partner unlimited liability, while other owners have limited liability and limited control over the company. A limited liability partnership (LLP) gives limited liability to all owners, protecting each against the debts of the business and the actions of other partners.
- Limited Liability Company: A limited liability company (LLC) protects you from personal liability from business debts and obligations. For example, your house, vehicle, or savings accounts will be untouchable if your business faces a lawsuit or files for bankruptcy.
- Corporation: Corporations pay higher taxes and are more expensive to form. However, corporations can also raise money through the sale of stock. This structure is best for businesses that need to raise high amounts of capital or want to go public in the future.
Most lawn care business owners will register as a sole proprietorship or LLC, but consider the number of owners you have, protecting yourself from personal liability, and the future goals of your business before you make your decision.
Register With The IRS & State Revenue Agency
If you plan to have employees now or in the future, you will need to register for an Employer Identification Number. Youâll also request estimated tax vouchers from both the IRS and your state revenue office to file with your quarterly tax payments.
Obtain Licenses & Permits
The licenses and permits that you need for your business are based upon the laws of your municipality and what your business will do. For example, simply mowing lawns only requires a standard business license in most areas. However, if you plan to spray chemical herbicides, an additional license may be required. You can find out more about license and permit requirements by contacting your stateâs Department of Commerce.
Weâve already discussed the potential expenses youâll encounter when opening your own lawn care business. Now, the big question is: how do you pay for it all? Like most aspiring entrepreneurs, your personal bank account likely isnât bursting at the seams with more money than you know what to do with.
If youâre scratching your head trying to figure out finances, youâre certainly not alone. Most small business owners donât have the funds needed to start and operate a new business. This is where small business funding plays a role.
There are more lenders than ever that are ready to give you the money you need to get your business off the ground. The trick is knowing what type of funding is best for your business and exactly where to find it.
If youâve socked away money in personal savings through the years, this money could be used to fund your new business venture. The best thing about using your own money is that you arenât indebted to anyone. You donât have to worry about loan payments, fees, and high interest rates. On the downside, if your business fails, it takes your savings with it.
Friends & Family
If you have a friend, family member, orÂ colleague with money to invest, consider pitching your idea to them. Present them with your business plan and give a presentation just as you would give to a banker or other lender.
There are a few ways you can go about getting capital from someone you know. The first is a loan. Agree to rates, terms, and the borrowing amount and get it all in writing. Then, youâll repay the borrowed funds plus interest over a set period of time, just as you would any other loan.
Another option is equity financing. Youâd receive capital for your business and in exchange, your investor would own part of your company. You wouldnât pay back the money immediately like you would a loan, but the investor would be able to take a share of your profits at a later time. Learn more about debt financing vs. equity financing.
No matter which way you go, keep everything professional and make sure everything is in writing. One thing that can sour a good relationship fast is a business deal gone bad.
As a new business owner, walking into your bank to get a business loan is pretty tough â¦ if not impossible. Banks look at your business and personal credit score, annual revenues, and your time in business. These lenders want to work with small businesses that are established and have the lowest risk. If youâre new to the game, many lenders wonât give you a second look.
This doesnât mean that youâre only stuck with high-interest, short-term loan options. If you want a long-term loan with low rates, consider a personal loan for business. With these loans, you can qualify based on your personal income and credit score â no business information required.
You can apply for a personal loan for business through your bank, credit union, or an online lender. The most creditworthy borrowers will qualify for the best rates and terms and highest borrowing limits. A personal loan for business is a great option for larger purchases that youâd like to pay off over a longer period of time, like expensive equipment.
Recommended Option: Upstart
Through Upstart, you can receive a personal loan of $1,000 up to $50,000 to use for your startup costs. APRs range from 8.09% to 35.99%. Your loan will be repaid over a period of 3 to 5 years.
Upstart is different from other lenders in that they look at more than just your credit score. While the lender does consider your credit score, education, years of credit, and job history are also factors used to determine if you qualify for a personal loan.
To qualify for an Upstart loan, you must:
- Have a personal credit score of at least 620
- Live in a state serviced by the lender
- Have a regular source of income
- Have a bank accountÂ
Equipment financing is a type of funding used to purchase equipment. Instead of paying the full cost of your equipment up front, youâll make a smaller down payment. A lender will cover the rest of the cost, which youâll pay back over time along with fees and interest.
There are two different types of equipment financing: equipment loans and equipment leases. If you take out an equipment loan, youâll typically pay 10% to 20% of the total purchase price as a down payment. Borrowers with high credit scores may qualify for 0% down financing. Once the down payment is paid and the loan is in place, youâll be able to immediately take possession of your equipment. Youâll pay for the total purchase price of the equipment plus interest over a set period of time — typically around 5 years. Once youâve made all payments as agreed, the equipment is yours to keep, trade in, or sell.
An equipment lease is more like renting. Youâll pay a down payment and take immediate possession of the equipment. Youâll make payments to your lender over a shorter period of time, usually 2 years. Once your lease period ends, youâll return the equipment and sign another lease for newer equipment. Some lenders may allow you to pay off your balance if you want to keep the equipment youâve been using.
Learn more about equipment loans and leases and which is right for you.
One of the best things about equipment financing is that you donât have to put up collateral to secure your loan. Instead, the equipment itself serves as the collateral and can be repossessed if you default on your loan or lease.
With equipment financing, you can purchase any type of equipment you need for your business, including lawnmowers, edgers, trimmers, or even a commercial vehicle.
Recommended Option: Lendio
Lendio is a loan aggregator that connects you with multiple lenders with just one application. Through Lendio, you can apply for equipment financing from $5,000 to $5 million with repayment terms of 1 to 5 years. Interest rates start at 7.5%.
To qualify for equipment financing, you must meet the following requirements:
- Annual revenue of at least $50,000
- Personal credit score of 650 or higher
- Time in business of at least 12 months
If your credit score falls below the 650 minimum, you may be able to qualify with proof of solid cash flow and revenue for the last 3 to 6 months.
Even if you donât meet these requirements, you could still qualify with certain lenders. Simply fill out Lendioâs free application or contact a personal funding manager. If you donât qualify for equipment financing or have other financial needs, you can also apply for Small Business Administration loans, short-term loans, startup loans, and Lendioâs other financial products.
Lines Of Credit
If you want a flexible form of financing, a line of credit might be right up your alley. Youâll be able to initiate draws from your line of credit, and the lender sends the funds immediately to your bank account. You can make one or more draws from your line of credit up to and including your set credit limit.
Since a line of credit is revolving, your funds will become available to use again as you pay down your balance. Interest and/or fees are charged on the borrowed portion of funds. If you donât use your line of credit, you wonât pay interest to the lender. Many lenders also wonât charge any fees if you havenât used your funds.
A line of credit is a good option when you need immediate access to cash, such as to purchase supplies or to pay for an unexpected expense, like repairs to your vehicle or equipment.
Recommended Option: Fundbox
You can qualify for up to $100,000 when you apply for a Fundbox line of credit. Fundbox fees start at 4.66% of the borrowing amount. You only pay when you use your funds, and you can save by repaying early. Payments are made weekly over a period of 12 or 24 weeks. You may receive a line of credit based on the performance of your business or for your unpaid invoices.
To qualify for a Fundbox line of credit, you must meet the following minimum requirements:
- Be a U.S.-based business
- Own a business checking account
- Have at least $50,000 in annual revenue
- Have a bank account with transactions for at least 3 months OR at least 2 months of activity in supported accounting software
Qualifying through Fundbox takes just minutes. If approved, youâll be able to initiate draws on your line of credit immediately for deposit in your account as quickly as the next business day.
Rollovers As Business Startups (ROBS)
Do you have a retirement account? If so, you may qualify for a unique type of funding known as Rollovers as Business Startups (ROBS). You probably already know that early withdrawal from your retirement account results in penalties. But there is a way to access these funds without being penalized, and yes, itâs completely legal.
A ROBS plan allows you to roll over your qualifying retirement funds into capital for your new business. Hereâs how it works:
- A new C-corporation is created
- A new retirement plan is created for the C-corp
- Funds are rolled over from your existing retirement plan to the new retirement plan
- These funds are used to purchase stock in the C-corp, giving you the capital you need to start or grow your business
Even though itâs just four steps, there are some legal issues to be aware of. This is why entrepreneurs that leverage their retirement funds in this way turn to a ROBS provider. A ROBS provider will handle everything for you, from setting up the new C-corp to maintaining compliance. In exchange, you pay a setup fee and a monthly maintenance fee.
Funds from your ROBS plan can be used for any business purpose. One of the best things about a ROBS plan is that you wonât be making payments with interest to a lender. You also donât have to worry about traditional borrower requirements like personal credit score or annual revenues. As long as you have a qualifying retirement plan, you can set up a ROBS plan. The main drawback, however, is that if your business fails, you lose your retirement funds, so be aware of this risk before setting up your plan.
Recommended Option: Benetrends
Benetrends is the creator of the innovative Rainmaker Plan, the original ROBS plan. Benetrends can get the funding you need for your business in as little as 10 days. You will have access to your retirement funds with no penalties with Benetrendsâ easy four-step process.
There are no credit score, time in business, or revenue requirements. Most retirement plans with at least $50,000 qualify.
A setup fee of $4,995 is required to start your ROBS plan. After paying this initial cost, you must pay a service fee of $130 per month. This fee covers compliance, audit protection, and other services.
When you start your lawn care business, youâll likely develop relationships with vendors. You can pay these vendors out of pocket when you receive your invoice, or you can break your purchase down into smaller, more manageable payments with purchase financing.
With purchase financing, a lender will pay your vendor up front. Youâll repay the lender the borrowed amount plus fees and/or interest through smaller payments made over a longer period of time. This is an excellent way to purchase supplies and other items critical for the success of your business when youâre facing cash flow issues or just need a little extra time to pay.
Recommended Option: Behalf
Behalf offers purchase financing, allowing you to pay any merchant with terms up to 6 months. With Behalf, you can borrow between $300 and $50,000. Monthly fees start at just 1%, and there are no origination fees, membership fees, prepayment fees, or maintenance fees.
There are no minimum time in business, revenue, or personal credit score requirements. However, a hard pull of your credit is performed by the lender and will be used to determine if youâre eligible to receive funding, as well as your monthly fee.
Business Credit Cards
A business credit card is a great way to cover expenses or make purchases without waiting for approval from a lender. Once youâre approved for a credit card, youâll be able to spend up to and including your credit limit anywhere credit cards are accepted.
Once youâve made a purchase using your credit card, youâll be required to make a monthly payment until you repay your balance, plus interest charged by the credit card issuer. This is a type of revolving credit, so as you repay, funds will be available to use again. Once youâre approved for a credit card, you donât have to wait for approval to make a purchase. You can make one or multiple purchases up to and including the credit limit set by the lender.
You can cover an emergency expense or purchase supplies using a business credit card. You can also use credit cards for recurring expenses, such as gas for your truck and machines. With a rewards card, you can even get cash back or perks just for using your card.
If you donât qualify for a business credit card, consider applying for a personal credit card to use for business expenses.
Recommended Option: Spark Cash For Business
Capital One Spark Cash For Business
$95 ($0 the first year)
The Spark Cash card from Capital One offers unlimited 2% cash back that you can redeem anytime. New cardholders can earn a $500 cash bonus just for spending $4,500 within the first 3 months of opening their accounts. This business credit card has a 19.24% variable APR. There is no annual fee for one year, and the fee is $95 after the first year. Employee cards are available at no additional cost.
To qualify for this credit card, you must meet these requirements:
- Excellent personal credit score
- No bankruptcies
- No defaults on loans
- No payments over 60 days late on a credit card, loan, or medical bill for the last year
- A loan or credit card for at least 3 years with a credit limit above $5,000
Recommended Option: Chase Ink Preferred
Chase Ink Business Preferred
18.24% – 23.24%, Variable
Another business credit card to consider is the Chase Ink Business Preferred card. With this card, you’ll be able to rack up points just by making purchases for your business. All travel, shipping, advertising, internet, cable, and phone purchases yield three points for every dollar spent for the first $150,000 spent annually. You’ll receive one point for every dollar spent on all other business purchases with no limitations.
You’ll also be eligible to receive a bonus offer of 80,000 bonus points if you spend $5,000 within 3 months of opening your account.Â Points can be redeemed toward cash, gift cards, or other products and services.
Chase Ink Business Preferred has a variable interest rate of 18.24% to 23.24%. The card has an annual fee of $95. Other benefits are also provided for cardholders, including cell phone protection and free employee cards.
To qualify for this card, you must have good to excellent credit.
Bolster Your Web Presence
The internet has made life easier than ever for small business owners. After all, you can do your accounting online, shop for supplies and equipment, and communicate with customers. Perhaps most importantly, you can market your business online. Bolstering your web presence is a quick and easy way to reach your target market, helping you bring in new customers and boost your profit potential.
Set Up Social Media Profiles
Social media has morphed into something much bigger than just chatting with family and friends. These days, people are using social media to find and connect with new brands and businesses. Shouldnât your new business be included?
One of the best things about social media is that itâs free to set up your profiles. Add your business to Facebook, Twitter, Google+, Instagram, LinkedIn, Yelp, and/or Pinterest. With these social media profiles, you can share information about your business such as operating hours and services provided, post photos of completed jobs, promote specials, or share news about your business. On sites like Facebook, satisfied customers can even post reviews and ratings.
Want to learn how to get the most out of your social media pages? Take a look at our Guide to Social Media Marketing.
Build Your Website
Most people turn to the internet when theyâre looking for a service provider, which is why itâs so important to have a website. No experience with web design? Donât worry — there are a variety of web builders that do the hard work for you. Check out some of our top picks.
Your website doesnât have to be complicated. Make sure that your design fits your brand and provides the most relevant information that customers need, including a list of services provided, your service area, and your contact information. You can even take it a few steps further by adding photos of jobs youâve successfully completed, price lists, special promotions, and news and updates.
One last thing to note is that when you choose a domain name, make sure that it reflects your brand and includes your business name. However, you also want to make sure that itâs short and easy to remember. Avoid using symbols and numbers to make it easier for current and future customers to find you online.
Check out more tips and tricks for creating and maintaining your web presence.
Choose Business Software
Every business — including your new lawn care business — needs business software to keep operations running smoothly. You can use business software to keep track of appointments, store customer data, process payments, create invoices, and keep up with your financials. Letâs explore a few types that would be useful for your lawn care business.
Managing your finances is one of the most important aspectsÂ of running a business. Accounting software makes it easier than ever to track your finances. With this type of software, youâll be able to keep up-to-date on the money that you receive, what is owed to you, and what you owe. In addition, using accounting software also makes it easier for you to run important financial statements and file your taxes.
Todayâs accounting software comes with more features than ever, including cloud-based storage, online invoicing, automatic payment reminders, and mobile apps for tracking on the go. Unsure of which software is best for you? Check out some of our recommendations. If you’re new to accounting or need a refresher, make sure to download our eBook, The Beginner’s Guide to Accounting.
Start Free Trial
A great choice for freelancers needing some extra help managing their business
Payment Processing Apps
Very few businesses today are âcash only.â This is because credit cards, debit cards, and even mobile devices make it easier than ever for consumers to pay for their purchases. To make payments more convenient for your customers, consider using aÂ payment processing app.
Payment processing software transmits data between you, your bank, and your customerâs bank, allowing you to accept credit cards, debit cards, and other forms of payment. Many payment processors also include the hardware needed to accept these methods of payments. This hardware may be included in your subscription cost or for an additional fee.
Worried about bulky hardware? Donât be. There are devices that easily affix to a mobile phone or tablet, so you can take payments anywhere — from your own office to your customerâs front yard.
Best Overall Mobile POS
Review Visit Site
Retail POS:Â Free trial ($60/mo value)
Restaurant POS: Free trial ($60/mo value)
Square POS: Always free
Field Service Management Software
Another type of software to consider purchasing for your business is field service management software. This software allows you to keep up with everything from your customers to your employees. There are even programs that are specific to lawn care companies.
With this type of software, you can keep up-to-date records on your customers, from their contact information to their history of appointments. With this software, you can easily schedule new appointments and dispatch employees. Other features may include automatic invoicing, route optimization, easy estimates, and GPS tracking.
Advertise Your Business
In order to make your business successful and profitable, you have to have customers. And you have to reach customers by spreading the word about your business.
While bolstering your web presence is a good first step, donât stop there. Consider purchasing paid ad space on social media platforms or search engines to reach a broader audience. Yelp for Business is an excellent way to advertise yourself while gaining street cred with potential clients.
You can also utilize free online sites like Craigslist to advertise your business. Just remember to follow the rules before posting and avoid spamming the website.
Moving beyond the web, never underestimate the power of âold schoolâ marketing techniques like flyers and door hangers. Post flyers in areas that get a lot of foot traffic, such as retail shopping centers, and put door hangers around your neighborhood and surrounding areas. You can design and print these yourself, or you can pay an additional fee to a professional printer. Either way you go, this is a very affordable way to market your lawn care business. Before you use this method of advertising, contact your city government office to learn about any restrictions and always make sure to get the permission of the property owner before distributing flyers on private property.
You can also use your work truck to advertise your business. Make sure that your business name, telephone number, and/or URL are prominently displayed and easy to read. Online printers can create custom vinyl decals featuring your logo, name, and contact information at a very affordable price.
Finally, word-of-mouth advertising is one of the most effective methods of advertising in this industry. If your customer likes your service, theyâll tell their friends, family members, neighbors, and colleagues about your service when recommendations are needed. They may give you a glowing review on your website or social media page, which could lure in additional customers. Always make sure to provide the best service to your customers so theyâll refer you to new customers in the future.
Your new lawn care business wonât be up and running overnight, but taking the time to go through each step ensures a better chance for success. Every business is different, and you may need to tweak some of these steps to better fit the vision for your lawn care business. Maybe taking the steps in a different order makes more sense for your business, or maybe thereâs a step that isnât relevant to your future goals.
No matter how you picture your future, youâre now armed with the knowledge of what it takes to start your own lawn care business. Now, itâs up to you to determine what steps youâll take next to become a successful entrepreneur.
The post How To Start A Lawn Care Business appeared first on Merchant Maverick.