I mentioned in my weekly roundup post that a friend and I were considering starting a landscaping business.
Ultimately I decided to not pursue a small business. While that idea is currently on hold, we spent a pretty significant amount of time discussing various things that we would need to do or take care of for the business to become a reality.
Today I’ll share 5 things to consider before starting a landscaping business. This is by no means an all-encompassing list, but it should serve as a good starting point for those thinking about starting a landscaping business.
1) Scope of the Business
Landscaping businesses can be as a one-man lawn-mowing business. It can be as complex as a company that offers all services including grading, retaining walls, storm drain work, and more.
While it may be unrealistic to offer every service from the get-go, it’s important to know the direction you are headed with your business. Our specialty would have been retaining walls and grading. These projects are big enough that you don’t need to have a huge number of clients to have consistent work, but small enough that they can be completed in a relatively short period of time.
2) Equipment and Capital
Equipment is one of the most important things to consider before starting a landscaping business. Having the proper heavy machinery – such as a bobcat – as well as the proper trailer and hauling equipment is essential for a landscaping company’s success.
Think about it. Even if you specialize in laying sod there is a good chance that you will want to transport these materials yourself to save money. That alone will require a truck and trailer.
Repairs are inevitable for heavy machinery, so it’s important to have ample capital for worst-case scenarios. Let’s say you are working on a retaining wall and your bobcat needs a repair. Do you have a few grand in accessible capital to get the proper repair done quickly so it doesn’t hold up work? Or do you have a backup bobcat?
3) Roles and Responsibilities
Assuming you are going to start your landscaping business with a partner (or two), it’s important that each individual recognizes their roles and responsibilities. Partnerships can fall apart quickly if responsibilities are not spelled out clearly from the get-go.
Unless otherwise stated in a legal document that was signed when the partnership was formed, everyone in the partnership has an equal claim to the business regardless of whether they are active participants in it. That means that one of the partners could stop doing any sort of day-to-day work and still have the same claim to the profits as a partner who is out working on the job sites each day.
4) Payment and Website
I personally see websites as a huge opportunity for new businesses, landscaping businesses in particular. The reason is that a lot of contractors are so used to working out in the field that they neglect their websites. Many look like they could have been made 10-20 years ago and haven’t been updated in years. Investing in a good website can help land clients.
Additionally, companies need to figure out how to collect payment. It would be strange for a company to not accept all types of credit cards, so it’s important to make sure that your company has that option set up from the get-go.
5) Liability and Insurance
Many people who start businesses – landscaping businesses or otherwise – do not realize just how important insurance is. There are a huge number of things that can go wrong at a landscaping job site. I won’t rehash a list of them, but I will say that if you aren’t covered you could be facing significant legal fees as well as potentially huge settlements.
While it’s important to find clients, have a payment system set up, and have equipment in working order, I would argue that having insurance trumps everything else. The last thing you want is to build a successful business only to lose everything because you didn’t have the proper insurance coverage.
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These are just a few things to consider before starting a landscaping business. There is a lot of money to be made in this line of work, so if you are discouraged by the sheer number of things you need to do just to get your business established, realize that others are also discouraged. On the bright side, it makes for less competition.
Have you ever considered starting a business only to put it on the backburner once you realized all the hurdles you had to overcome just to get it started?
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Photo by Sean McGinnis
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I have a family member who’s a contractor. He mainly does paving and retaining wall jobs but he also does home remodeling in the winter months when he can’t work outside. He added additional services slowly as well. He has a lot of large equipment that always needs to be repaired so having access to cash is important. Last year he tried going into a joint venture with another contractor and did not go well. The partnership ended after one month because the roles and responsibilities were not clearly spelled out. It’s definitely hard labor and lots of places where you need to cross your ts and dot your Is but there is a lot of money to be made. BTW, did you ever complete your retaining wall in your backyard?
Practical Cents Thanks for sharing your insight on this topic. I think being a contractor sounds easy on the surface, but there is so much that you need to do and take care of to ensure a successful business that it really doesn’t fit for a lot of people. It’s amazing how much quicker things can be done because of the equipment available these days.
I planned on taking a week of PTO in August to do the retaining wall, but changed my plans because of the new job. I also didn’t feel 100% prepared because there was such a massive amount of dirt to move that I need to have a solid plan in line for where that will go or how I’m getting rid of it. I am happy I put it off because it means one more year to save money for it. I do still plan on doing it, but I may hire some help (i.e. someone with a bobcat) to help. I’ll re-evaluate the plan this Winter.
These are great tips for any business. My first (and only) business was actually a landscape business. I was 10 and a neighbor friend and I went door to door and offered to rake leaves for $2-$5. The business failed after a few months and I’m pretty sure all of my earnings went straight to gummy bears.
Yes, have had this though about the potential obstacles involved in getting an internship education business up and running.. It’s likely that I’ll probably start this as a side hustle, wait to validate the idea then once and when it takes off then commit to it full time :)!
Couldn’t imagine you as a landscapper DC ;) haha
My husband has been considering starting a landscaping business, and he actually has a small lawn mowing business right now. He’s wanting to take the business to the next level – as in, an actual business, not just cash and small accounts, but one thing that’s holding him back is the insurance and liability issues. Insurance is expensive, and the fear of liability is tough!
Rick did landscaping for a buddy who owned a landscaping biz years ago. Super hard work, but some valuable skills were learned. I remember bringing the guys pizza and pop once as they worked on a large job in 95 degree weather. Yuck.
I love thinking through business ideas! Most of the time, though, I end up ruling ideas out pretty quickly, for various reasons. Your point about insurance is so valid… the number of people I know that don’t have insurance for their small ventures is really scary.
My husband just started a painting/drywall/handyman company! He had to get licensed, insured and purchase about $2500 in tools. So far, so good, though! We’ve actually only advertised on Craigslist and the amount of work he’s had is unbelievable. In 2015, we’re hoping to hire on a few people so he’s not working by himself and so he can take on more work. Owning a business is fun, but there’s always something to do and it’s a TON of work. Thanks for the post!! Great read!
The Barefoot Budgeter Haha that’s a funny story. I would totally hire someone to rake my leaves for $2-$5. Then again, I have a ridiculous amount of leaves…
mycareercrusade I”m insulted at your last comment. I need to go take a lap around the house to cool down…very upset.
Some businesses like the landscape/construction business are incredibly difficult to start as a side hustle. It would be hard to justify $20-$40k in equipment up-front if we were not going to utilize it full-time.
RetiredBy40 I’d be curious to read a post about the quotes your husband has received. Insurance is expensive, but there is also a lot of things that can go wrong. Imagine a worker having some sort of catastrophic accident that leaves them unable to work the rest of their life. That’s a BIG insurance claim.
Laurie TheFrugalFarmer It’s definitely a different sort of labor. Let’s just say I would do all the business development, finance, etc. primarily and get my hands dirty at least a few times a week. My friend has all the skills and knowledge to run a construction team, so he would be able to leverage that skill set.
moneypropeller Insurance is important, especially when you are working with clients who could become hurt or where a catastrophic situation could leave you on the hook for a big claim.
Sarah Brooks Even with blogging I’m noticing how there is always something additional that can be done. It’s really pretty incredible. That’s awesome that you and your husband took the plunge, and I’m glad he’s getting a lot of business. There will always be drywall jobs whether with new construction or renovations.
Can’t tell if you’re serious there, sorry DC if I did insult you there :O..
Yeah agreed, the capital investment is a large barrier to entry there and probably something you’d need to be passionate about :)
mycareercrusade Haha I’m glad you couldn’t tell, that was my goal!
I agree with what you are saying about the capital. If you don’t have passion for what you’re doing you will be more likely to regret the initial capital investment. You also need to have customers lined up, at least imo.
Haha very cheeky but I like it :)
Agreed and customers that are willing to pay!
For me, making sure that I had the right amount of insurance would be the scariest part. I don’t have any doubt of my abilities or leadership skills, but I would be very nervous about being ruined by some sort of legal suit. I’m sure that I would go overboard with insurance protection just so that I could sleep at night without worry. http://www.rocksolidservicesllc.com/
When starting a business, there are always so many different things to consider so that you can make it grow and be successful. All of the different considerations that you give here, I thought, were very insightful. Your first suggestion to first set the scope of your business is very important. You talk about how knowing the direction your company is going is very important. I think that if you know what work you will be doing, you will be able to financially plan better, and you will be able to get started with your advertising and the actual work of your business. Thanks again for the great insight! http://www.southernlandcon.com
The part that stuck out to me was when it talked about getting the equipment and the capital for it. Something like that would make sense, because I doubt someone could do a lot of landscape work without the proper equipment. With that kind of situation, I can see how it might be a good idea to do some research to determine what options would work best for you. http://www.rocksolidservicesllc.com/
This is a great guide when it comes to landscaping, it especially helps when starting any business in my opinion. I actually started a restaurant business and this perfectly applied to that as well. Thanks for the help, definitely something awesome to share to other entrepreneurs. http://www.oslandscaping.com
I love gardening and working outside in my yard, however I don’t think that I would want to try to start my own landscaping business. Like you pointed out, there are a lot of costs when it comes to equipment you would need. That is why it might just be best to hire a company instead of just trying to start your own. http://www.smith2.com/profile/firm/
These 5 points are key! License and insurance are such a big deal in this industry. Too many people go without it and in the long run it comes back to haunt them! Our company http://brkcustomconcrete.com is fully insured here in Pittsburgh.
I really like your tip to consider equipment when starting a business. Do you think it would be a good idea to rent some of the larger items, like a bobcat, in the beginning? I think that would give you some time to save up money so you can invest in the necessary items. It would also be nice because you wouldn’t have to worry about repairs.