You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your landscape supply business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a landscape supply business?
When considering opening a landscape supply company, one of the largest initial costs will be the land. You will more than likely need multiple acres in which to store your palleted and dump truck delivered landscaping materials. If you also plan to run a storefront with tools and accessories, building a store may be the most likely plan. Additionally, supplying plants from a nursery will require space and a greenhouse for protecting plants in winter months, particularly in northern states. Other costs will include:
- Cash register and credit card machines
- Computers and internet service for sending and receiving information and orders
- Front end loader and delivery trucks
- Irrigation systems for nursery
- Initial costs for purchasing supplies
- Tax ID code from IRS
Business owners can reduce start up costs by purchasing used equipment and vehicles. Total cost varies, based on location.
What are the ongoing expenses for a landscape supply business?
Most expenses will be generated from materials re-stocks. Making sure you have enough materials on hand is a critical part of proper customer service and should always be a lead concern for bills and expenses.
Some other expenses will include:
- Service and maintenance of company tools and machines
- Storefront maintenance and decor
- Nursery management and plant replacement (when applicable)
- Business licensing and insurance
- Employee payroll
Who is the target market?
You will be considering two main target markets: the commercial and residential customer. The bulk of your sales will likely be generated from the commercial landscapers. They are looking for a reliable and cost-effective supply company who can handle daily medium-sized orders, as well as the large jobs requiring multiple deliveries or pick-ups.
At the same time, the residential customers’ orders may be smaller and less frequent, but their patronage will be key to building a strong customer base and reputation. Keep your overhead low by offering wholesale prices and uncomplicated services.
How does a landscape supply business make money?
Landscape supply companies make their money from the sales of landscaping supplies, such as mulch, gravel, pavers, and plants, as well as sales and service of commercial and residential lawn and garden tools.
How much can you charge customers?
The prices you charge your customers will somewhat depend on the volume of material you order, as well as market pricing. Price your materials and services competitively for your area. Depending on the services you offer, you may decide to charge less for materials, for instance, but include a service fee for deliveries, to maintain profitability. Specialty items and tools will also offer options for creating more retail profitability. Some industry averages on gravel by the ton range from $45-100, depending on the types. Mulch can run between $25-75 per yard and per mulch type. It is best to include this pricing research in your initial cost estimate for start up, when you are considering competition and market saturation.
How much profit can a landscape supply business make?
The average landscape supply company should have frequent commercial customers, often with standing contracts of their own through their customers. Account for the residential retail business as well and you could turn a profit in the $50-75,000 range, with the potential to make much more, as your business grows.
How can you make your business more profitable?
Once established, many landscape supply businesses search for additionally profitable options. One option will be to increase your specialty plant, mulch, and decorative stone options. Or sell packages for specific garden builds, such as English or Japanese-style gardens, which require a certain set of plants and accessories to complete the look. Lastly, equipment rentals and repair may be another niche service you’re able to fill.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your landscape supply business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a landscape supply business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A landscape supply business is generally run out of a medium to large sized piece of land, depending on the size of the business. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a landscape supply business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your landscape supply business will be in compliance and able to obtain a CO.
Labor Safety Requirements
Due to the fact that your employees will be working with heavy materials and large pieces of machinery, it is important that you review this federal document regarding labor safety requirements and employer responsibility.
Landscape supply businesses should require clients to sign a services agreement before starting a new project that will involve long term services. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a landscape supply business
In the beginning of opening up your business, it is best to market directly to commercial landscapers. Once they are through your door, you will be able to show off what you can do. Getting them there is the trick. Social media and direct mailings can generate interest. Once you’ve established your brand, a continued social media presence will remind customers of you and the cost will be minimal. Periodical ads and flyers can also be beneficial for keeping customers aware and will help to spread the word about your reasonable pricing and courteous service.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Establishing a reputation and offering competitive pricing are two of the biggest keys to return customers. Offering services, such as materials delivery and tool repairs can also keep customers coming back. And, when you are first deciding on a location, try to choose a location which will see now and future customer traffic. Areas that are too congested or out of the way may force customers to make alternative choices.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Landscape Supply Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Individuals with experience in residential or commercial landscaping may find this a logical career move. Backgrounds in horticulture or business management will also prove beneficial. This type of business requires you to also be able to work physical labor, sometimes in less than favorable outside conditions.
What happens during a typical day at a landscape supply business?
Day to day operations for landscape supply businesses revolve around servicing the customers, both residential and commercial, as well as restocking store supplies. Landscape supply companies are typically open six to seven days a week. Some of the daily operations include:
- Managing customer orders and accounts
- Checking and reordering stock in the store and supplies yard
- Service and maintenance of company tools
- Supply deliveries and seasonal services, such as winterizing lawns and customer tool repairs
What are some skills and experiences that will help you build a successful landscape supply business?
As mentioned above, having experience and/or knowledge about landscaping and the materials typically used is an excellent bonus for starting your own landscape supply yard. Business management would also prove beneficial, as you will more than likely be entering into this venture by yourself. Careful financial management is always critical to the success of a startup business. Having a pleasant demeanor with customers will also help, as their return business is key to your long-term success.
What is the growth potential for a landscape supply business?
Landscape supply companies mirror the interest the general public shows for maintaining their home, office, and business exteriors. With the right location and regional competition, landscape supply companies have proven to be quite profitable.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a landscape supply business?
Many landscape supply companies were started to fill a niche between commercial landscapers, needing professional grade tools and landscaping supplies in large quantities, and the DIY home pro, looking for better pricing and selection than from a chain hardware store. The key is researching the need for such a business in your area and determining the level of competition and saturation present in your area. Consider the customers’ needs and plan accordingly. Additionally, you should:
- Advertise on social media and within landscaping organizations to make a name for yourself.
- Offer supplies and tools that are staples of the industry, as well as some specialty items, to reinforce your niche status.
- Offer seasonal services and deals to keep your commercial and residential customers interested.
How and when to build a team
In this industry, it is important to have a few people on the team from the beginning. Even though much of the work may be able to be handled with machines, you will still need to interact with customers. Maintaining the supply yard, as well as a operating machinery will take two to three people regularly. A cashier/delivery recipient will also be critical to keeping the operation moving ahead smoothly. As the business grows, you will more than likely find a need for more employees, yet the operation can stay relatively small, especially with employees who can perform multiple jobs.