A lawn care business does basic grass maintenance like mowing, edging, weed eating, and blowing. Learning how to start a lawn care business starts with understanding costs that include equipment, business licenses, insurance, and depending on your state, a mowing license. You can pay yourself around $60,000 a year with a well-functioning lawn maintenance business.
Every lawn care company needs to file as a legal entity. This protects the owner’s personal assets if a lawsuit were to occur against the business. Incfile is an online legal service that walks you step-by-step through registering your lawn business as a legal entity. Register your business today for only $49 plus state fees.
Here’s how to start a lawn care business in five steps.
1. Write Your Lawn Care Business Plan
A lawn care business plan helps you get clear on the market you’re serving, equipment costs, and how much money you expect to earn and spend during the first three years in business. With a lawn care company, there is no shortage of customers, but you need to know how you’ll reach and differentiate your business from your competitors. Your financial projections determine how long it will take for your business to be profitable after you factor in equipment startup costs.
Traditional vs Modern Business Plan
Before creating your lawn care business plan, you need to determine if you’re going to create a traditional or modern business plan. A traditional business plan is similar to a business report and a requirement for receiving a bank loan. A modern plan, such as a business model canvas (BMC) is preferred by many business owners who aren’t getting a bank loan and want to create a more simplified, visual business plan.
Market Research for Your Lawn Care Business
The market research section of the business plan section is where you explain who your ideal customer is and how many you need to sustain your business. As the owner of a lawn maintenance business, you have a lot of potential customers. The main question your market research should answer is, “What neighborhoods are underserved?”
The best way to answer this question is to do personal research. Drive around and see which neighborhoods have lawns that are not being taken care of. You can also research which lawn companies serve which neighborhoods. Then, look up their Google reviews and identify which companies have the lowest average reviews. Marketing your lawn company in the neighborhoods that your lowest reviewed competitors service is a good idea because some customers are likely to be unhappy with their service.
Research Lawn Care Equipment Cost
Even though you’ll be purchasing your lawn care equipment after acquiring necessary capital, it’s important to research equipment costs. You’ll factor the lawn care equipment costs into the financial projections we’ll discuss later. You’ll also include the costs into the amount of capital you need to acquire to start the business.
The main question you need to answer about equipment is whether you should purchase it new or used. If this is your first business, it’s wise to keep your startup costs low and purchase used equipment from local stores or on websites like Craigslist or Equipment Trader. When your business earns a profit, you can upgrade your mowing equipment.
Competitive Analysis for Your Lawn Care Business
The competitive analysis section of your business plan is where you document your competitors’ strengths and weaknesses. This information can help give you marketing ideas because you can focus on providing a service or feature that a competitor does not. For example, it could be a service like sod installation or a business feature like a money-back guarantee.
To conduct a competitive analysis, research your top five lawn care competitors. For each company, list their strengths and weaknesses. What do those businesses do well, and what can they improve on? A company’s marketing is your number one source of information for competitor research. Look at their print marketing and online marketing by reviewing their website and Google My Business listing.
“When launching a business, it is necessary to make a plan and understand the steps you need to take to create a successful company. Be an expert at understanding your profit and loss statements so you can maximize your profits because a healthy bottom line is important.”
―Russ Jundt, Founder, Conserva
Financial Projections for Your Lawn Care Business
The financial projection section is the most difficult part of a business plan. It’s where you document startup costs or how much money it takes to start your business. You’ll consider these costs when projecting how much money you plan to earn monthly for the first two years that you’re in business. You’ll also need to add a subsection that shows a high-level view of income and expenses in a year-by-year format for the first three years.
For example, if you’re taking out a loan to purchase lawn equipment, it’s a startup cost. You need to factor in the loan repayment as a cash outflow every month until it is paid off. It may take you several months or years to pay off startup costs. Additionally, you can save money on taxes by deducting the cost of equipment from your business tax returns.
You must finalize your financial projections if you’re seeking funding from a bank or investor. Typically, it is the first section of a business plan that they look at because they want to know how and when they will make their money back. Additionally, once you start the business, you will use your projections to determine if you’re meeting your financial goals.
Business Plan Software for Your Lawn Care Business
You may find that working on a business plan from scratch is an overwhelming process. There is software available to walk you step-by-step through the process. Live Plan is a business plan software that shows you each section you need to complete along with additional detail so that you know how to complete it. Live Plan also takes the financial projections numbers you entered and creates visually appealing charts. Use these charts to understand the potential growth of your lawn care business better.
Live Plan has a lawn care business plan example you can learn from. The example is a traditional business plan that would be used for funding from a bank or investor. Its fictional lawn care company requires $16,000 in startup costs and doesn’t become profitable consistently until the ninth month.
2. Obtain Funds for Your Lawn Care Business
After you write your lawn care business plan, you’ll be ready to seek funding. If you need a substantial loan―more than $75,000―you will most likely start your funding search at a bank. If you’re well networked in your community, you can also seek an investor or start a crowdfunding campaign. You can take out a smaller loan―less than $50,000―in the form of a personal loan, or you can use credit cards to finance costs, such as lawn care equipment.
Secure a Bank Loan
Typically, a bank wants to lend at least $75,000 to a small business. You may need a loan amount of this size if you’re purchasing higher-end equipment like trucks, trailers, and commercial mowers. Additionally, if you’re hiring several employees, you need to have enough funds to cover the first month of their salaries.
If your company is a startup, the bank will require you to have the funds you’re seeking in a separate account, like a certificate of deposit (CD). This is because the bank wants to recover its loan if your business fails.
Take Out a Personal Business Loan
If you’re looking for funding of less than $75,000 or don’t have money saved as collateral for a business loan, you may want to explore a personal loan. Personal loans are typically based on your credit score but can be used for business purposes. A credit card can be used as a personal loan as well. Business owners typically use credit cards for costs of less than $10,000. A personal loan or credit card has a higher interest rate than a loan secured to an asset like a CD account.
Find an Investor for Your Lawn Care Business
An investor is someone or a group of people who lends you money for a percentage of equity (ownership interest) in your lawn care business. People look for investors so that they don’t have to assume debt. Additionally, if the business were to fail, you typically wouldn’t owe an investor any money whereas you would for a bank loan.
It can be a challenge to find an investor in your community. The best way to discover an investor is to create a business plan with clear financial projections and network within the business community like joining your local chamber of commerce.
Crowdfunding for Your Lawn Care Business
Crowdfunding is a way to raise money for your lawn care company by offering rewards for services paid in advance. A crowdfunding campaign for a local business can be successful if you have a network of potential customers willing to purchase your services in advance. For example, as a reward, you could offer homeowners a deal to buy several months or a year’s worth of lawn maintenance in advance at a discount. You could then use the money raised to buy the lawn equipment.
Typically, a crowdfunding campaign will charge a 5% fee on all proceeds for using their platform. In exchange for a fee, the platform will provide a website landing page, a messaging system for campaign updates, and promotion within their platform.
3. File Legal Documents for Your Lawn Care Business
By the time you’re ready to file legal documents, you’ve used your business plan to secure the necessary capital to start your lawn care business. Before taking on any customers, you need to submit documentation to avoid legal challenges and tax implications. Filing as a legal entity protects your personal assets if your business ever faces a lawsuit. Liability insurance protects the business if an employee becomes injured on the job or a customer’s property is damaged.
File Your Lawn Business as a Legal Entity
Filing as a legal entity forms a business organization that separates and protects your personal assets. If the business is ever sued, establishing it as a separate legal entity ensures your personal assets are protected. Additionally, when you file as a legal business entity, your personal assets are protected from any business debts, aside from lawsuits.
Approximately 80% of small businesses file as a limited liability corporation (LLC), which is a legal entity that protects its members from a business’s debts and lawsuits. Depending on your business and tax structure needs, you may want to file as a corporation, such as an S Corporation. Incfile is an online legal service that assists you through setting up your lawn care business’s legal entity. Register your business with Incfile today for only $49 plus your state fee.
Obtain Your Employment Identification Number
Your employment identification number (EIN) is a number the IRS gives businesses for federal income tax and employee payroll tax tracking purposes. It is free to apply for an EIN from the IRS. Typically, the EIN is also required to open a business checking account.
Secure a Lawn Care Business License
Typically, you don’t need a license to operate a lawn care company with mowing and basic maintenance of a lawn. However, several states, such as California and Alabama, require a lawn maintenance-related license. If you’re applying chemicals to a lawn like pesticides, it’s likely your state requires a license for that service. Regardless of the services your lawn care business provides, it’s wise to check your state’s and county’s official website for lawn maintenance business license requirements.
Get Liability Insurance for Your Lawn Care Business
Purchase liability insurance for your lawn care business to protect yourself in case of employee injury or property damage. For example, if your mower provides substantial damage to an irrigation system on a commercial property, your business may be liable for that damage. Several states, such as Louisiana and California, require liability insurance to operate a landscaping business. The typical cost of liability insurance for a lawn care company is around $400 a year.
Open a Business Checking Account
You should open a business checking account before your lawn business incurs expenses. It’s wise to keep your business finances separate from personal finances in the event of a tax audit. Chase Business Checking provides safe and reliable checking for small business owners with a minimum balance of $1,500.
4. Set Up Lawn Care Business Systems
Once you’ve completed your legal documentation and opened a business checking account, you can set up business systems, such as hiring processes, and purchase applicable software. If you have employees, you need payroll software. All businesses need accounting software. It helps to track income and expenses. Customer relationship management (CRM) software allows you to track your business leads and stay in touch with customers.
“How are you going to run your daily scheduling? Your daily bookkeeping? How are you going to keep track of equipment maintenance? These are just a handful of the dozens of different mini systems that you will need to implement into your daily life to run and grow your lawn care business. The good news is that there are excellent online solutions for each of them.”
―Zach Hendrix, Co-founder, GreenPal
Hire Employees for Your Lawn Care Business
Many lawn care businesses begin with the owner as the sole employee. Other lawn businesses start with a few employees handling different lawn maintenance tasks to handle different tasks of lawn maintenance. If you’re searching for employees to hire, you can post your open positions on job posting websites like Craigslist or Indeed. You should also run a background check before hiring an employee.
One of the best ways to find employees is by using your website and social media. Add a “Jobs” page to your website with your lawn maintenance job description. Take that page and share it with your social media followers. Sharing a job opening is also a great way to promote your business without directly advertising to your personal friends on Facebook.
Pay Your Lawn Care Employees
Once your employees work for your lawn care business, you need to pay them. It’s essential to maintain your business’ payroll records in case of a tax audit. Gusto is a low-cost payroll software that costs $39 per month, plus $6 per employee paid. With Gusto, you can add human resources (HR) services like workers’ compensation and healthcare benefits.
Online Accounting and Billing Software
Part of being a business owner is tracking income and expenses. QuickBooks is an online accounting software that helps you keep track of your business’ financials. You can also use QuickBooks software to send invoices to your customers. One benefit of sending invoices online is that you can give your customers the option to sign up for automatic monthly billing. This reduces the time you have to spend every month collecting on invoices sent to customers.
Lawn Care CRM
CRM software helps manage leads and customers for your lawn maintenance business. It’s important to keep track of customers you interact with about your lawn care services. You might want to schedule follow-ups with certain customers or mail them discounts to entice them to sign up for more lawn care. It’s also important to keep in contact with your customers to ensure they are receiving adequate service.
Use a CRM to separate yourself from other lawn care competitors with better customer communication. For example, send your customers a card wishing them a happy birthday and include a discount. Automating this process with a CRM will save you time. It’s difficult to set up birthday reminders and send out cards to dozens or hundreds of customers without a CRM to assist.
A basic and free CRM software is HubSpot CRM. HubSpot provides free CRM software in hopes that you will eventually sign up for other paid services like its marketing tools.
“Take time out of working ‘in’ the business to work ‘on’ the business (commit X hours per week). Identify what’s holding you back and work on chipping away those roadblocks. It’s easy to find reasons to go back into the field, but as a business owner, understand that your time is better spent running your business.”
―Butch Dellis, Co-founder, Nutri-Green Professional Lawn Services
5. Market Your Lawn Care Business
The best way to market your lawn care business is through face-to-face communication. Potential customers like to meet the person maintaining their lawn. Referrals are also great marketing for your lawn care company. Traditional marketing like business cards, flyers, and thank you notes makes your business memorable to current and potential customers. Additionally, potential customers go online to look up your business. They want to see the quality of your work and read online reviews before committing.
Traditional Marketing for Your Lawn Care Business
Traditional marketing includes the physical materials you need to market your lawn care business. You can use a company like Vistaprint to print business cards, flyers, posters, and small signage.
A strategy you can implement to secure long-term clients is writing handwritten thank you notes to all first-time clients. This is a kind gesture that your customer will remember. Additionally, the thank you note is also a great marketing piece your customer may share with their neighbor.
Networking for Lawn Care Customers
If you’re interested in getting commercial landscaping clients, networking is a must. Joining and attending meetings for your local Chamber of Commerce or Business Networking International (BNI) group helps potential customers put a name and face with a business. Additionally, you may want to network with other residential based service companies, like pressure washer and pesticide companies, to receive referrals. Property managers are also a great group to network with because they may recommend your business to their home residents.
“I got booked solid within a couple weeks of starting a lawn mowing company. It was all thanks to one networking technique my dad used to help me get started. He called the real estate agent who’d helped my parents find their house. My dad mentioned to the agent that I was beginning to mow lawns around the neighborhood. Almost overnight, she sent tons of work my way because she was aware of so many new homeowners in the area. If you’re just getting started in lawn care, consider investing time at local real estate networking events in town. Try to become the go-to recommended lawn care expert for multiple real estate agents. You’ll never be without leads.”
―Alexander Lewis, Owner, Lewis Commercial Writing
Get Lawn Care Government Contracts
Government-owned properties like schools and military bases hire lawn maintenance companies through government procurement contracts. To apply for these contracts, you need to register with the proper federal, state, or city entity. If you’re interested in government contracting, it’s best to visit your local Procurement Technical Assistance Center (PTAC), which is a taxpayer-funded federal program that provides small business owners no-cost consulting on doing business with the government.
Online Marketing for Your Lawn Care Business
Having a quality online presence for your lawn care company helps you get in front of your ideal customers and give you credibility when potential customers find your business online. For example, when someone searches your business’s name using Google, your Google My Business (GMB) listing will show with customer reviews, business photos, and contact information.
Here are online marketing strategies for your lawn maintenance business:
- Website: A website for your lawn care service is the digital billboard for your business. If you’re trying to create your own website, save time by using an existing lawn care website template, and enter your business’s information.
- Email marketing: Email marketing is the best free or low-cost way to get your business in front of current customers. For example, you may want to send an email out to your existing client base announcing that you will be paying a referral fee to those who recommend a new customer for lawn service. MailChimp is free for the first 2,000 email subscribers.
- Social media marketing: At a minimum, you need to create a Facebook page and make a dozen quality posts about your business. Your Facebook page will show in Google when someone searches the name of your lawn maintenance business. Having a Facebook page show in Google will give your business added credibility.
- GMB: Every business that has local customers gets a free GMB listing. At a minimum on your listing, you need to fill out your business’s basic information like phone number, hours of operation, and address. If you operate your lawn care company from home, you don’t have to show your home address. You can hide your address, and create a radius showing what area you mow lawns.
Depending on how much time you have, you can work on your online marketing strategies every week, month, or quarter. At a minimum, your website should be updated with accurate information. You should also review your GMB listing every month to monitor negative reviews and flag inappropriate or inaccurate photos that may be uploaded by users.
Frequently Asked Questions (FAQs) About How To Start a Lawn Care Business
This section includes the most frequently asked questions about how to start a lawn care business.
How much does it cost to start a lawn care business?
You can start a lawn care company with as little as $2,000 to more than $100,000. How much you spend depends on your equipment needs. You can begin a lean-budget mowing business with used equipment stored on a truck you already own, a business registration for $150 and liability insurance, which costs around $400 a month. Lawn maintenance business expenses increase as you add industrial lawn equipment, trucks, trailers, employees, and an office.
Do you need a license to start a lawn care business?
Yes, you may need a license. Some states like Alabama and California require a license to maintain lawns. Other states like Georgia and Illinois don’t require a license to operate a lawn care company. It’s best to check your state’s and city’s license requirements before opening a lawn business, which can be found on your state’s (or city’s) official website.
How much do you charge to mow a lawn?
The average lawn care price is between $30 to more than $200 per visit. The size of the lawn and type of lawn services provided affects how much you charge per lawn. A good rule of thumb is to charge $60 per worker per hour of work. You may also want to incorporate travel time into your lawn mowing estimate. If you are already cutting a lawn in that neighborhood, you may quote a lower price because of the short travel time.
“Make sure to charge enough for your services. Starting out, it can be tempting to undercut the competition. Rather than lowering your prices, make your services so great that they’re worth the price.”
―Blair Matthews, Head of Sales and Marketing, American Turf & Tree Care
Is lawn mowing a good business?
Yes, lawn mowing can be a great business if you’re well organized and do quality work. If you provide a great service, your business can spread by word of mouth quickly. That is a unique feature of a lawn mowing business. What hurts many lawn companies is the amount of travel time between jobs. It’s best to focus on a particular neighborhood or area and build clientele there. Focus your marketing materials and networking to one specific area, like homeowners’ association (HOA) meetings.
How much does a lawn care business license cost?
If your state or city requires a lawn care license, they typically cost less than $100. Remember, in addition to the business license, your lawn company needs to file as a business entity in your state, which costs around $150.
How much is insurance for a lawn care business?
A lawn care company needs liability insurance, commercial auto insurance, and workers’ compensation insurance if it has employees. Liability insurance for a lawn company protects you from property damage and costs about $400 a year. Commercial auto insurance is about $750 a year for minimal coverage. Workers comp insurance is roughly $450 a year per employee.
A lawn care business can be a weekend side business or a multimillion-dollar business with hundreds of employees. To start either, you’ll need a business plan with financial projections. Use software like a CRM system and a GMB listing to help you track and attract new customers. Once you pay for your equipment and have a solid client base, your lawn care company can be a highly profitable and successful business.
Every lawn care company needs to register as a legal entity before mowing a lawn. Registering as a legal entity protects your personal assets if a lawsuit was to ever occur against the business. Additionally, it protects your personal assets from any debts the business accumulates. IncFile is an online legal service you can use to set up your business’s legal entity in minutes. Register your business today for only $49 plus state fees.