Data provided here comes from our team of experts who have been working on business plan for a landscaping company. Furthermore, an industry specialist has reviewed and approved the final article.
Is running a landscaping company profitable, and what is the typical monthly income for such businesses?Let's check together.
Revenue metrics for a landscaping company
How does a landscaping company makes money?
A landscaping company makes money by providing landscaping services to customers.
What are the services provided by landscaping companies?
Landscaping companies offer a range of services to enhance and maintain outdoor spaces. These services encompass various aspects of landscape design, installation, and upkeep.
They often provide consultations and design planning to create visually appealing and functional landscapes tailored to client's preferences and needs.
This may include features like plant selection, hardscape elements (such as patios, pathways, and retaining walls), water features, and outdoor lighting systems.
Landscaping companies also handle the implementation of these designs, which involves tasks like planting trees, shrubs, and flowers; laying down sod or turf; building structures like pergolas or decks; and setting up irrigation systems for proper watering. Beyond initial installation, these companies offer ongoing maintenance services, such as lawn mowing, trimming, fertilization, pest control, and seasonal clean-ups to ensure the longevity and vitality of the landscape.
What about the prices?
A landscaping company offers a variety of services with prices that can vary based on factors such as the scope of work, location, and specific requirements.
Basic services like lawn mowing and maintenance typically range from $30 to $60 per visit, depending on yard size. For more extensive lawn care packages, including fertilization, weed control, and aeration, prices might fall within the $50 to $100 range per session.
Tree and shrub maintenance, which involves trimming, pruning, and disease management, can range from $100 to $300 or more, depending on the number and size of plants. Installing new plants, flowers, or shrubs might cost anywhere from $50 to $200 per plant, depending on species and size. Hardscape installations like patios, decks, and walkways can range from $10 to $40 per square foot, while adding features like outdoor lighting, irrigation systems, or water features might cost an additional $500 to $1,500 or more.
Comprehensive landscape design services, involving planning, layout, and plant selection, could start around $500 and go up to $5,000 or more for larger, intricate projects.
| Service | Price Range ($) |
|---|---|
| Lawn Mowing & Maintenance | $30 - $60 per visit |
| Lawn Care Package (Fertilization, Weed Control, Aeration) | $50 - $100 per session |
| Tree & Shrub Maintenance | $100 - $300+ per session |
| Plant Installation | $50 - $200+ per plant |
| Hardscape Installations (Patios, Decks, Walkways) | $10 - $40 per sq. ft. |
| Outdoor Lighting, Irrigation Systems, Water Features | $500 - $1,500+ each |
| Landscape Design Services | $500 - $5,000+ per project |
Who are the customers of a landscaping company?
A landscaping company may serve residential, commercial, and industrial customers.
Which segments?
We've prepared a lot of business plans for this type of project. Here are the common customer segments.
| Customer Segment | Description | Preferences | How to Find Them |
|---|---|---|---|
| Residential Homeowners | Homeowners seeking landscape design and maintenance for their properties. | Attractive garden designs, lawn maintenance, seasonal planting. | Local advertising, neighborhood events, social media targeting. |
| Commercial Properties | Businesses and office complexes needing landscape services to enhance their image. | Professional designs, low-maintenance plants, outdoor seating areas. | Networking with local businesses, online business directories. |
| Property Management Firms | Companies managing residential communities or rental properties. | Regular maintenance, landscaping that adds value to properties. | B2B networking, property management conferences. |
| Event Planners | Organizers of weddings, parties, and events requiring temporary landscaping. | Themed decorations, temporary flower installations. | Event planning expos, collaborations with event venues. |
| Seniors Communities | Retirement communities where residents value well-kept outdoor spaces. | Safe pathways, accessible gardens, low-maintenance plants. | Collaboration with retirement homes, senior-oriented publications. |
How much they spend?
Within the detailed framework of our business model, clients of a standard landscaping company generally spend between $150 to $400 per month. These expenses vary, often depending on the size of the property, the complexity of services required, and whether the services are for residential or commercial properties.
Research indicates that landscaping contracts typically last from 4 to 12 months, as some clients seek seasonal maintenance while others require year-round services. Certain factors, such as climate, type of vegetation, and client preferences, significantly influence these durations.
Therefore, the estimated lifetime value of an average customer for a landscaping company would range from $600 (4x150) to $4,800 (12x400), considering the length of the contracts and the monthly expenditure.
Consequently, we can reasonably estimate that an average customer would generate around $2,700 in revenue for a landscaping company, balancing between shorter contracts and less intensive landscaping needs against year-long, comprehensive maintenance contracts.
(Disclaimer: the figures presented above are based on industry averages and generalized scenarios. They may not precisely reflect the specific financial dynamics of your individual business context.)
Which type(s) of customer(s) to target?
It's something to have in mind when you're writing the business plan for your landscaping company.
The most profitable customers for a landscaping company typically fall into the category of homeowners with larger properties and higher disposable incomes.
These customers tend to be the most profitable because they require more extensive landscaping services, such as lawn care, garden design, and regular maintenance, which generates higher revenue.
To target and attract them, a landscaping company should focus its marketing efforts on neighborhoods or communities with these demographics, use visually appealing marketing materials showcasing their best work, and offer personalized consultations to understand the specific needs and preferences of these customers.
To retain them, excellent customer service, consistent quality of work, and proactive communication are key—sending regular updates, offering seasonal promotions, and providing loyalty discounts can help build long-term relationships and keep these profitable customers coming back for more landscaping services.
What is the average revenue of a landscaping company?
The average monthly revenue for a landscaping company can generally range from $5,000 to $50,000, depending on various factors such as the scale of operations, clientele, and services offered. Let's delve into specific scenarios to understand this better.
You can also estimate your own revenue, using different assumptions, with our financial plan for a landscaping company.
Case 1: A small local landscaping business
Average monthly revenue: $5,000
This type of landscaping company often operates within a small community or a less populated area. The services are basic, catering primarily to residential homes with modest yards. Such a company may handle routine garden maintenance, lawn care, and simple design projects.
With limited capacity, the company might manage around 20 projects per month, with an average charge of $250 per project. This setup restricts its earning capacity, bringing the total estimated revenue to approximately $5,000 a month.
Case 2: A well-established landscaping company in a suburban area
Average monthly revenue: $25,000
Positioned in a suburban locale, this type of landscaping company often benefits from a more extensive customer base, including both residential and commercial clients. The services are more diverse, ranging from regular maintenance to more complex landscaping projects involving garden design, hardscaping, and installation of irrigation systems.
Given the wider range of services and a larger clientele, the company could handle around 100 projects monthly, averaging $250 per project. Additionally, more significant projects could be charged at higher rates, contributing to an increased revenue. Thus, the company could generate around $25,000 in monthly revenue.
Case 3: A premier landscaping company with comprehensive services
Average monthly revenue: $50,000
This upscale landscaping business caters to high-end clients and large, commercial projects. Not only does it offer standard landscaping services, but it also provides comprehensive solutions like architectural landscaping, eco-friendly garden designs, water feature installations, and more.
The clientele for such a company is willing to pay premium prices for unique, customized services. With the capacity to handle both numerous and large-scale projects, this company might only need 20 sizable projects per month at an average of $2,500 per project.
Given the complexity and scale of the projects, along with the additional services offered, this landscaping company could comfortably generate $50,000 per month, establishing it in the highest tier of the industry in terms of revenue.
The profitability metrics of a landscaping company
What are the expenses of a landscaping company?
Operating a landscaping company entails expenses for landscaping equipment, landscaping materials, staff wages, and marketing.
| Category | Examples of Expenses | Average Monthly Cost (Range in $) | Tips to Reduce Expenses |
|---|---|---|---|
| Labor | Wages for landscapers, crew members | $3,000 - $6,000 | Consider hiring seasonal workers, use efficient scheduling |
| Equipment | Mowers, trimmers, trucks, trailers | $1,000 - $2,500 | Regular maintenance, consider leasing instead of buying |
| Materials | Plants, seeds, mulch, soil | $500 - $1,500 | Buy in bulk, negotiate with suppliers for discounts |
| Fuel | Gasoline, diesel for equipment | $200 - $500 | Invest in fuel-efficient equipment, plan efficient routes |
| Insurance | Liability, workers' compensation | $200 - $600 | Shop around for insurance, maintain a good safety record |
| Marketing | Advertising, website maintenance | $100 - $300 | Focus on cost-effective online marketing, word-of-mouth |
| Office Expenses | Rent, utilities, office supplies | $300 - $800 | Consider a home office, energy-saving measures |
| Licenses and Permits | Business licenses, permits | $50 - $200 | Ensure compliance to avoid fines |
| Maintenance | Repair and maintenance of equipment | $100 - $300 | Perform regular equipment maintenance |
| Taxes | Income tax, property tax | $500 - $1,000 | Consult with a tax professional for deductions |
| Training and Education | Employee training, certifications | $100 - $300 | Invest in ongoing education for staff |
When is a a landscaping company profitable?
The breakevenpoint
A landscaping company becomes profitable when its total revenue exceeds its total fixed and variable costs.
In simpler terms, it starts making a profit when the money it earns from providing various landscaping services becomes greater than the expenses it incurs for equipment, salaries, transportation, and other operating costs.
This means that the landscaping company has reached a point where it covers all its expenses and starts generating income; we call this the breakeven point.
Consider an example of a landscaping company where the monthly fixed costs typically amount to approximately $15,000.
A rough estimate for the breakeven point of a landscaping company, would then be around $15,000 (since it's the total fixed cost to cover), which might be achieved by servicing 10 to 25 properties per month, assuming the company charges between $600 and $1,500 for a landscaping project depending on its complexity and size.
You have to know that this indicator can vary widely depending on factors such as location, the range of services offered, operational costs, the scale of the projects undertaken, and competition. A large landscaping firm handling extensive commercial projects would obviously have a higher breakeven point than a small business catering to residential gardens that does not need as much revenue to cover their expenses.
Curious about the profitability of your landscaping business? Try out our user-friendly financial plan crafted for landscaping companies. Simply input your own assumptions, and it will help you calculate the amount you need to earn in order to run a profitable business.
Biggest threats to profitability
The biggest threats to profitability for a landscaping company can include fluctuations in weather conditions, as extreme heat, droughts, or heavy rains can impact the ability to work outdoors and lead to decreased demand for services.
Additionally, rising fuel and equipment maintenance costs can eat into profits, as fuel powers the company's vehicles and machinery.
Competition from other landscaping firms in the area can also drive prices down and reduce profit margins.
Seasonality plays a significant role, with the business often experiencing lower demand in the winter months, necessitating careful financial planning to cover expenses during slower periods.
Furthermore, unforeseen issues like equipment breakdowns or accidents can result in unexpected expenses and downtime, impacting the bottom line.
These threats are often included in the SWOT analysis for a landscaping company.
What are the margins of a landscaping company?
Gross margins and net margins are financial metrics that signify the profitability of a landscaping business.
The gross margin is the difference between the revenue earned from landscaping services and the direct costs associated with providing those services.
Essentially, it's the profit remaining after subtracting the costs directly tied to the landscaping operations, such as plants, materials, direct labor, and equipment used on the job.
Net margin, conversely, encompasses all expenses of the business, including indirect costs such as administrative expenses, marketing, rent for the office space, and business insurances.
Net margin offers a comprehensive view of the landscaping company's profitability, accounting for both direct and indirect costs.
Gross margins
Landscaping companies generally have an average gross margin ranging from 30% to 50%.
For instance, if your landscaping company earns $20,000 per month, your gross profit would be around 40% x $20,000 = $8,000.
Let's illustrate with an example.
Consider a landscaping company handling 20 projects per month, with each client being charged $1,000. The total revenue for the month is $20,000.
However, the company has expenses for materials, plantings, and direct labor.
If these costs total $12,000, the company's gross profit equates to $20,000 - $12,000 = $8,000.
Thus, the gross margin for this landscaping company is $8,000 / $20,000 = 40%.
Net margins
Typically, landscaping companies have an average net margin in the range of 5% to 20%.
Using straightforward math, if your landscaping business generates $20,000 per month, your net profit might hover around $2,000, representing 10% of the total revenue.
We'll use the same scenario for consistency.
The company, earning $20,000 from client projects, incurs direct costs of $12,000.
There are also additional overheads, such as marketing, office rent, administrative expenses, and business insurance. Assuming these total $6,000, the equation becomes $20,000 - $12,000 - $6,000 = $2,000.
So, the net margin for the landscaping company calculates as $2,000 divided by $20,000, resulting in 10%.
It's crucial for business owners to recognize that the net margin (in comparison to the gross margin) provides a more accurate insight into the real earnings of your landscaping company. It reflects the entirety of costs and expenditures involved in running the business.
At the end, how much can you make as a landscaping company owner?
Now you understand that the net margin is the indicator to look at to know whether your landscaping business is profitable. Essentially, it tells you how much money is left after all expenses have been paid.
The profit you'll make largely depends on your business acumen and operational efficiency.
Struggling landscaping company owner
Makes $800 per month
Starting a small landscaping company, you might opt for lower-cost, less reliable equipment, limit your service offerings, and not invest time in marketing or customer relationship management. As a result, your total revenue might not exceed $4,000 a month.
Additionally, if your expenses are high due to poor planning or waste, your net margin might be as low as 20%.
Thus, your monthly earnings would likely be no more than $800 (20% of $4,000).
This represents a minimal income scenario for a landscaping business owner.
Average landscaping company owner
Makes $6,000 per month
Should you set up a standard landscaping company with decent equipment, offer a variety of common services, and engage in regular marketing activities, you could see total revenues of around $25,000 per month.
By keeping a close eye on your expenses, perhaps you can maintain a net margin of around 30%.
Under these conditions, your monthly earnings might be around $6,000 (30% of $20,000), representing a stable yet unremarkable outcome.
Exceptional landscaping company owner
Makes $35,000 per month
You commit to excellence, investing in high-quality equipment and skilled employees, providing a range of specialized services (like architectural landscaping or eco-friendly solutions), and dedicating effort to marketing and strong customer relations.
With your superior offerings, total revenue could soar to $100,000 monthly.
Furthermore, with adept management and operational efficiency, you could achieve a net margin of around 35%.
In this optimal scenario, your monthly earnings could be around $35,000 (35% of $100,000).
Such success is achievable with careful planning, significant dedication, and a well-crafted business plan for your landscaping company!