Many people decide to start up a lawn care business every year. Some are successful and some fail because running a profitable lawn care business can be tough.
Starting up a lawn care company is enticing to a lot of people for several reasons. Firstly, it’s a cash business so profits can be quick and your hard efforts are rewarded early on. Secondly, the barrier to entry isn’t that hard to get over either. You can get started with some equipment that’s easy to obtain, some of it can be second hand too. Starting up isn’t really all that expensive compared to a lot of other businesses.
It seems like you’re ready to start seeing some great profit right from the get go, however it’s easy to overlook the not so obvious aspects of running a lawn care business and this can it to fail
In this article, I’ll cover the 12 causes of why I see lawn care business fail.
Of course, these are just a few ideas from my perspective, and how I think about being a lawn care business owner. Take the information here as you so wish.
Bad Cashflow Management
One thing I often see is business owners not allowing for all of their future expenses.
People often take the money they’ve earned straight to the bank at the end of the month without considering what they have spent.
Even though you may have made x amount of money, you may have spent spent money on things like gas, new lawn mowers blades or mower oil that you haven’t yet accounted for.
All of these expenses will be important when it comes to paying tax so you need to factor everything in to your profit calculation.
I’ve found its useful to track expenses using an excel spreadsheet. You can clearly see how your business is doing and quickly identify the areas where there are inefficiencies. You can then plan to improve on these in order to make better profits in the future.
Managing your cashflow and ensuring you actually get paid for your work seems obvious, but its something people sometimes don’t pay attention to. Let’s say somebody doesn’t pay up. Do you understand how to provide customer service and give follow up phone calls? Do you know how to get legal representation and send polite letters to get people to follow up with you? You’ll want to work out a way of dealing with these problems before they arise.
Finally, it’s common for lawn care business owners to get too complacent once the business starts to make good profits. You’ll often see them take too much money out of the business to when it can’t support the lifestyle they’re trying to live.
You’ll often see lawn business owners trying to do too much too soon. Whether it’s adding too much new equipment, taking on too many clients or taking on too many jobs they can’t commit to, it can be hard to keep up with a business that is trying to grow too fast.
Forcing a workload on your business that it’s not capable of handling can have financial repercussions too. Servicing top of the range equipment will damage your wallet faster than you think. It’s better to take your time and build slowly.
Doing the opposite of expanding too fast can be a problem too. You sometimes see people trying to stick with push mowers or 30-inch walk behinds for too long. They never make an attempt to upgrade their equipment in order to improve efficiency. You can only do a certain amount of work with some equipment so its good to try and upgrade when your finances allow for it.
Poor Sales Skills
When you run a lawn care business, it’s not just about cutting the grass. You need to be able to put yourself out there in order to get customers through the door. You may be very competent in cutting grass, but if you’re able to promote yourself properly, you’re going to struggle.
Getting new customers in the first couple of years can be one of the hardest challenges because you’re probably not well established in your area. You may not have built good relationships yet, and there might be a lot of other competition too.
Often established lawn care business owners end up turning down customers, but if you’re just starting out, you need to think of ways to attract customers other than by word of mouth.
It’s good to have a system in place to collect potential customers’ contact information and a way to give out pricing information too.
If you have just started your business, let everyone know about it. Tell your friends and family you’re in business. They may want to help to support you.
You can have the best equipment and the best routes, but if you don’t know how to sell your service, you’re not going to be in business very long. Spending time on making postcards, lawn signs, cold calling and developing online skills with social media are all things that often get overlooked.
Bad Time management
Time management is essential if you’re going to be mowing multiple lawns throughout the day.
You’re going to be travelling all around town to different properties so it’s good to figure out how to maximize your time mowing lawns, and spend less time driving to jobs. You’ll also save on gas money too.
You may be able to squeeze in an extra customer or two by saving time on transportation so make sure you figure out an efficient route for each day in the week. You’ll need to be able to adapt if you get thrown off schedule too.
When you’re just starting out, there’ a good chance that you will have more time on your hands than money. There’s no excuse to not give your clients excellent service so that you can build your reputation. When you don’t have many customers, the ones you do have are really important to hold onto, so you’ll want to do them a good job and spend that extra bit of time to give them the best service possible.
Using the Wrong Equipment
If you intend to do a professional job, then you’ll want to being using professional equipment.
Buying stuff off the shelves may be great for residentials and home owners, but it’s probably not going to be suitable if you plan on running a lawn care business.
Lack of Discipline
Any business requires a tremendous amount of discipline in order to be successful. You need to be realistic in working out the number of hours you’ll need to put in to achieve success.
It’s almost certainly going to require some amount of sacrifice.
When you work for someone else, it’s easy to not feel any repercussions for slacking off but when you work for yourself, you need to be brutally honest and realistic about the effort you’re putting in.
You may get rained off for a couple of your working days. While you may have made plans to do other things you enjoy on your days off, you might have to reschedule any missed jobs into those days rather than just letting them go. While it might be possible to hire extra employees in the future to help you play catch up, you may not have the cashflow to fund your business in this way and so discipline will be key.
Finally, you need to be disciplined with your spending. When you tally up your revenue and expenses to see what you have left at the end of the month, you need to make sensible decisions on how you will reinvest that money back into your business to help it grow and make you more profit in future.
Paying the price early on will help you to be more comfortable further down the road.
Being reliable is essential for any customer-based business.
If you’re going after customers that are willing to pay slightly more for quality, they will not be interested in having someone who doesn’t show up to the job when they say will.
I’ve found that giving customers a window of when you will turn up is the best way to go here.
Sometimes its nearly impossible to follow a really tight schedule when running a lawn care business because there are some things which may not be in your control. For example, you might get rained off or stuck in traffic when travelling between jobs.
In any event, do your best to stay reliable and trustworthy in order to maintain a good reputation with your customers.
If you’re running a more established lawn care business, you might consider bringing on employees to help you with the workload.
While it might seem like a good idea, you need to be careful of who you hire because bad employees that are lazy or dishonest will let you down and can cause your company to go under.
Maybe multiple employees deicide to quit on the same day, or they try to steal your customers.
There are many situations where your employees can try to sabotage your company and this is why a lot of lawn care business owners choose to work alone.
It’s good to establish company values when you first start your company. Try and to get everyone involved to understand what the culture is. Increasing motivation and morale of your employees will decrease the likelihood of them doing you wrong.
It’s a sad reflection of our society, but unfortunately its very common for people who own lawn equipment to have their stuff stolen.
A lot of the equipment you need is high value, and thieves will try and take any opportunity to steal from you. This can be a huge blow to your company and can cause it to fail so make sure you have good insurance and just in case this happens to you.
If your business heavily relies on you to do the work and you become incapable due to getting hurt, its going to be a huge problem.
Working a lawn care business is quite labor intensive and it doesn’t get any easier as you age.
If you do get hurt, your business could go under if you don’t have anyone else that is able to take over.
Again, it might be a good idea to get insurance in this case.
It can be tempting to get persuaded by various marketing opportunities out there that you don’t really need.
It’s easy to get wasteful on unnecessary spending from a business standpoint.
If you want to peruse some of these opportunities when you get more established and have a little extra income, that’s fine. When you’re just starting out, it’s better to spend money only on things that will convert customers.
In some areas, the competition can get so high and you might have other lawn care providers that will do the same job for a price that is too low for you to compete with.
After all, you need to be able to negotiate a price that will cover your expenses, so its simply not worth it to you to try and compete for a ridiculous price.
There is a minimum number of labor hours that you can put in even where you hire someone, so it’s important to keep your prices up high enough.
It’s a psychological thing too. If you’re price is too low, it gives the perception to the customer that you’re a low quality lawn care provider which is not something you want. Furthermore, if a client does want a very low price, the chances are that’s not the type of customer that you’re looking for anyway.
I’ve found its always best to price somewhere in the middle of the road, or maybe slightly higher. A lot of customers will be willing to pay a greater amount for that extra bit of quality.
These are just some of my ideas and things I’ve learned over the years. I think a good way to be successful in any business is to study successful companies and do your best to find out what they’re doing that you aren’t.
Become a student, always keep learning and never stop working hard!