Start a lawn care business by following these 9 steps:
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 guide to starting your lawn care 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 lawn care business?
The costs include obtaining a simple business license, equipment, supplies, promotional signage, flyers, business cards, a website, Internet connection, and having a pickup truck (monthly lease or purchase).
You can have very modest liability insurance for this business; however, you will need to pay for worker’s compensation insurance if you hire employees.
A typical start-up budget for an owner/operator business with no assistants is under $3,000 and consists of:
- Mower - $500
- Trimmer - $200
- Leaf Blower - $200
- Hand tools - $100
- Gasoline Can - $25
- Oil and Gasoline - $20 per tank needed.
- Promotional Signage (to put on sides of truck) - $100 for magnetic signs
- Flyers - $50
- Business Cards - $25
- Website Creation – Free to $500
- Internet Services (website registration, hosting, and Internet connection) - $50 to $75 per month
- Insurance $50 to $200 per month
- Pickup Truck Lease - Nothing down with good credit, $299 per month plus $100 per month for insurance
Read our lawn care business purchasing guide to learn about the materials and equipment you'll need to start a lawn care business, how much to budget, and where to make purchases.
What are the ongoing expenses for a lawn care business?
The ongoing expenses include labor cost, truck and equipment maintenance, and operating expenses. A typical monthly expense budget for a small operation with a home-based office (rent free) would be:
- Labor (per assistant) – Minimum wage up to $15 per hour.
- Employee Taxes - 7.65% up to about 15% of the wages paid (depending on the state)
- Telephone/Internet Connection - $50 to $100 per month
- Promotional Flyers/Business cards - $75 per month
- Insurance - $50 to $200 per month
- Truck - $299 per month
- Truck Insurance $100 per month
- Gas - $200 per month
- Equipment Maintenance - $50 per month
Who is the target market?
Long-term customers who are willing to sign up for ongoing automatic payments are the best. These customers allow you to plan your budget far in advance.
Local businesses can also be excellent customers, as they typically are willing to pay more for your services than residential customers, and they are more likely to request regular service. Big operations with lots of lawns are excellent customers, such as hospitals, office buildings, shopping malls, and schools. However; many have their own lawn maintenance crews, and landing a big contract like that can be difficult, because this business is highly competitive.
How does a lawn care business make money?
These businesses charge a monthly service fee for the basic lawn maintenance service and earn additional revenues for any special services provided such as installing new grass sod, fertilization, and winter preparation.
How much can you charge customers?
There are many undocumented workers in the lawn care business, and, whether you like it or not, you will be competing against them. Such companies are usually undocumented, pay workers less than minimum wage, have no insurance, and do not pay taxes.
Legitimate companies charge at least 150% minimum wage for the amount of time each worker is on their customer’s site. S,o for example, if the minimum wage is $10 per hour, the charges would be based on a rate of $15 per hour. A set charge per month is usually around $25 for a simple residential lawn that takes under two hours to cut. A commercial business might pay more because of the time needed to cut the lawn.
How much profit can a lawn care business make?
Lawn care alone, on a small scale, is not a highly profitable business. Competition is severe because of the low cost of entry and the lack of sophisticated skills needed for this business. Most of the small operators who work in this business do so in order to make a decent living when compared to taking a regular job instead. Typical owner/operators, who work alone and are successful, work very hard to make $30,000 to $50,000 per year. To make more money, a business owner needs to run more than a single crew, and offer additional services to existing customers.
How can you make your business more profitable?
Besides cutting and maintaining lawns, a lawn service business may offer additional services such as snow removal (in colder climate areas) and landscaping. Landscaping is a different, yet related business. It includes the installation of pavers, walkways, sidewalks, and retaining walls. It also includes installing water features (ponds, fountains, and waterfalls) and planting trees, shrubs, and flowers.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. 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 lawn care business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
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.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
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
In most states, it is necessary to obtain a Lawn Service license. 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.
In addition, certain local licensing or regulatory requirements may apply. For more 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.
Lawn care businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your lawn care business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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 lawn care business
Promotional signage on the truck(s) used for the business is important. If possible, when the truck is not in use, park it on a street with lots of traffic in a place that is highly visible. Using door-to-door distribution of discount promotional flyers to residences and business is also an effective way to advertise your business. Hand out your business cards to everyone you meet. If possible, put a promotional sign on all the lawns that you maintain that has your contact information on it. Make sure you have an attractive website that uses the best practices for search engine optimization (SEO) to have a good rank on the search engine results page for local searches.
How to keep customers coming back
Many new customers will come from word-of-mouth from your existing customers, so be sure to do a great job that pleases your customers. Show up on time according to the scheduled work and always clean up meticulously before leaving the job. Never leave a job partially finished or poorly maintained. Check in with customers regularly just to see if there is anything extra they need you to do.
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 Lawn Care Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
The people who succeed in this business enjoy working outdoors in a variety of weather conditions. The temperature varies depending on the seasons. At times during the summer, it may be very hot in certain locations. This work requires enough physical strength and stamina to be able to lift heavy equipment in and out of a pickup truck and to push the lawn cutting equipment around the yard.
People who are friendly and like to talk with people usually are more likely to get customers. It helps to have a good eye for details and to be meticulous in the maintenance work in order to do a good job that customers appreciate.
What happens during a typical day at a lawn care business?
The days start very early. Before going to the customer’s job sites, the equipment needs to be inspected and to make sure it is in proper working order. Typical activities of this type are cleaning the mowers and sharpening the cutting blades. Additionally, all equipment that uses gasoline needs to be filled with a mixture of gasoline and the appropriate amount of oil required. After all the equipment has been checked, the trucks are loaded and the crews (if any) are assembled and given the day’s job orders that have been prepared in advance.
The rest of the day is spent working at customers’ job sites. Naturally, any problems that come up, like truck breakdowns or equipment troubles, need to be dealt with. When the crew(s) return to the office, they should fill out a report of the work completed, making note of any special conditions or requests by the customers. This information is added to the system for billing purposes, and to help in the preparation of future job orders for those customers.
At the end of the day, equipment should be cleaned and checked for damage to see if it needs repairs. For some owner/operators, these can be very long work days, until they can hire enough crew to reduce their workload.
What are some skills and experiences that will help you build a successful lawn care business?
One way to attract customers is to make your own lawn look spectacular. By practicing on your own lawn you will be able to learn the skills needed to keep a lawn in perfect condition. All of the information is readily available on the Internet, which enables any person interested in this business to be self-taught and to improve their skills.
What is the growth potential for a lawn care business?
Many operations start out with a single person, perhaps one helper, and a single pickup truck. The ability to expand depends on the acquisition of more equipment and being able to hire more crew members.
There are very large commercial companies in this business that serve an expansive area. There are national companies as well. Realty Biz gives a list of the top 50 lawn care companies in the USA. TrueGreen is the largest lawn care company in America. They are headquartered in Memphis and serve over 1.7 million residential and commercial customers from multiple locations across the country.
If you add landscaping services, ValleyCrest Landscape Companies is the biggest in the USA with international operations also. They have over 100 locations, more than 10,000 employees, and earn over US$1 billion in revenues each year.
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Take the Next Step
Find a business mentor
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 lawn care business?
Many people get their start in this business by simply cutting lawns for their neighbors. That makes this business the perfect entry-level business for young people. There are no educational requirements or certifications necessary.
How and when to build a team
Many start out as single workers and owner/operators and then add one assistant when the workload increases. You can hire additional crew if the jobs can be found and the necessary equipment is available. Expansion requires capturing more jobs, having available workers, sufficient equipment, and open work-time slots for scheduling.
Make sure to hire documented workers because it is dangerous to use undocumented workers and there are hefty fines ($2,000 per person).