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The landscaping industry never slows down. While spring and summer are the busiest seasons, there is plenty of work to be done all year round. If you’re thinking about starting a small landscaping business, it can be a great way to escape the traditional 9 to 5.You have the best chance for success if your area isn’t oversaturated with providers. But even if it might seem a little tight, there’s probably a way to differentiate yourself by offering unique services. In this article, we’ll discuss how to grow a landscaping business, including how to retain clients, expand your services, and get more leads, as well as financing options for when you need additional working capital and are looking to expand.
How to Retain Current Clients
One of the first lessons when starting a business is learning how to find and then retain clients. One method is to encourage customers to sign up with a monthly contract by offering them a discount. With their bank information and a written agreement in place, you can do an automatic withdrawal once a month, which will stabilize your revenue. Customers who sign up on a monthly, seasonal, or yearly basis may be more likely to stay for the long haul if you consistently deliver top-notch service at a bargain price.Next, offer additional services on an as-needed basis. Services you may consider are:
Tree and bush pruning
Leaf removal
Gutter cleaning
Snow removal / driveway cleaning
Hardscaping — wall or path installation
Planting trees or shrubs
Tilling gardens
Boulder installation
Special requests
In addition to offering additional services and special requests, offer to give them a discount if they sign a contract. Once they know you can handle all of their yard’s needs, they may be less likely to take their money elsewhere. Lastly, offer bundle services when and where you can. This does two things: It makes the customer feel as if they are getting a bargain, and it prevents customers from only choosing lower cost services, which can restrict your growth and profit margins.
Methods to Get More Leads for Landscaping Business
The first and most important method to growing a landscaping business (or any other) is to utilize referrals. This can be done any number of ways. For example, you can ask to leave a sign in their yard, give existing customers a discount when a friend or family member books and pays for your services, or you may offer a free, one time service, such as leaf removal.Next, consider expanding your service area. While it may entail more driving, it’s possible to greatly increase your client base by just expanding your area of operations a few miles or more. Lastly, if you’re not already doing so, consider expanding your services to include commercial real estate. This may require you to purchase additional insurance and hire an employee or two, but any additional costs you incur might pay for themselves very quickly. Realtors may also provide a good source of income, but keep in mind they may need fast-turnarounds to accommodate last minute showings.
Landscaping Services That Make the Most Profit
If you’re looking to make the most profit, it makes sense to center your services on tasks that bring in the most revenue. Nationwide, irrigation and lawn care appear to be the most profitable, while mowing and mulching bring in the least returns. However, because mowing and mulching will likely be how you acquire many customers (and possibly pay your bills), you may want to consider bundling those services with others, which we discussed above. Other profitable services include:
Downspout extension installation
French drain installation
Pond installation
Garden bed construction
Snow removal
Post storm cleanups
Tree removal
The trick is finding jobs that customers are unable to do themselves (as opposed to simply unwilling). Grass cutting for many people is simply something they don’t want to do in the heat of summer, but they would likely change their minds if companies decide to charge too much to increase their profit margins. Tree removal or pond installation, on the other hand, is a different story. Therefore, find jobs that the average customer can’t do to significantly increase your revenue.
How to Expand Your Current Lawn Care Services
When expanding the services you offer, utilize off-seasons to learn new skills. It’s unrealistic to learn and implement a new branch of landscaping while you’re fully booked with other projects. Also, if you anticipate you’ll need to hire additional employees, use your slower off-seasons to train them during this time, too.Don’t forget to send current and past clients information about your additional services when you’re ready to move forward. For this, email and direct mail can go a long way.
Financing Options for Lawn Care Startups
Wondering how to start a landscaping business with no money? A lawncare business start up likely won’t find a magic bullet to its capital issues, but it may be surprised by what’s available. Small business loans for new businesses do exist. They often require a personal guarantee and have less favorable loan terms, but the myth that a business must be in business for a minimum of two years before it can get a loan is not true. It is true for some lenders and loan products, but not all.One of the top small business loans, the SBA 7(a) loan, is available for certain start ups that meet the eligibility requirements. So if you’re looking for a loan for landscaping, you may want to start here. Because SBA loans are insured by the federal government, they have some of the best terms in the industry. However, other loans may be a good fit, too. Popular loan options for new businesses that may make great landscaping business loans include:
Equipment loans
Equipment loans use the purchased machinery itself as collateral to secure the loan. The repayment length typically coincides with the equipment’s useful life, which can make calculating taxes a little easier.
Merchant cash advances
Merchant cash advances provide borrowers with a lump sum. Instead of making monthly payments, a small percentage of each credit card sale is automatically forwarded to the lender. Because payment is guaranteed, no collateral is required.
Invoice financing
Unpaid customer invoices are used as collateral to secure the loan. Once payment is received, the borrower pays off the loan amount with interest. Invoice financing can be useful for working capital needs.
Invoice factoring
A third party buys a company’s unpaid invoices at a discount and collects payment on its behalf. Once payment is received, the remaining invoice is forwarded minus any fees. Other options besides small business loans include grants and crowdfunding. However, success is not guaranteed for either as both are highly competitive. We suggest pursuing them, but know that bootstrapping and small business loans should likely be your primary strategies. Recommended: How to apply for a small business loan.
The Takeaway
Launching and expanding a landscaping business can be done by just about anyone who understands how to retain their clients and offer the right services. When capital is needed, remember there are loan options regardless of how new your business is. From SBA loans, merchant cash advances, to equipment loans, there are often ways for small business owners to fund their projects and growth needs. Learn more about small business loans with Lantern Credit.
Frequently Asked Questions
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Photo credit: iStock/ArtistGNDphotography
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About the Author
Lauren Ward
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
