A lawn care business offers the services of cutting grass lawns, trimming around the edges, removal of debris, and maintenance of turf, which includes fertilization, weed control, and pest control.Most lawn care businesses offer regular service on a weekly, bi-weekly, or monthly schedule depending on the maintenance needs of the customers. Services may be offered to residential customers, commercial customers, or both.
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.
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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:
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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.
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.
Business Guide: How To Get Commercial Lawn Care Accounts
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:
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.
Do I Need A License To Run A Lawn Care Business?
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.
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.
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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.
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.
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Lawn Care Business Name Generator
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If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your lawn care business is sued.
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
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Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
How To Start A Lawn Care Business In 2023 (complete Guide)
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Young Beaumont Boy Pursues Dream Of Becoming Entrepreneur And Starts Lawn Care Business
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
How To Start A Lawn Care Business With Little To No Money
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.
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.
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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.
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.
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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.
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.
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.
Certifications & Licenses Needed To Start A Lawn Care Business
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
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
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