Landscape Company Business Plan

One of the frustrations I hear from landscape start-ups is that money always seems to be going out faster than it’s coming in.Freshly-minted landscape professionals complain that every time they turn around they have to buy something just to get the job done.Guess if you have to, but include a number for taxes!

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You must understand your overhead burden and work that number into your labor rate.

In other words, what does it cost you to run your business for one day or even one hour?

It goes without saying that it costs a lot of money to build or renovate a landscape.

To get a job done you have to spend money upfront to get all the products you will need to actually build that landscape.

Am I better off buying this piece of equipment at this stage of my business or would it serve me better to borrow it from a fellow landscape professional or rent it and pass that cost directly through to my client on that job?

It's this kind of questioning about spending money that will help you avoid leaking all your profits out into purchases that may not be the best use of working capital at that stage of your business growth.So here’s a little homework that’ll help you in the long-run: list out your insurance cost, your truck payment, your rent or lease payments, along with any other cost that is fixed and will need payment whether you go to work every day or not.Finally, and most important, jot down your estimated taxes for that year.Deciding to make that big leap to strike out on your own is almost always connected to a desire to make more money, right? So the big question is: What makes this question so hard to answer is that what you charge has less to do with what you personally want to earn per hour and more to do with all of the costs associated with running your business (each hour).Before you set an hourly labor rate you want to know what it costs you at the end of the year to have run your business for that year.What to charge your clients for your time is always a tricky subject.If you've been working for another landscape company for a year, or maybe even for 10 years, then you know what you’ve been getting paid as a worker for each hour you work.Divide that number by the number of months you think you can work; say, 8 months if you’re in New England.Then divide that into the number of weeks in that 8-month period you’re planning to work. But remember, if you are going down to hours, you need to be thinking of the BILLABLE hours. Now you have an overhead burden number that you know you have to recover. This gets more complicated when you start bringing on employees, so just beware and be ready to do the math to make sure you are recovering that fixed overhead burden you just figured out, along with all the associated costs of carrying employees (wages, insurances, uniforms, training, etc.).It even costs upfront money if you’re running a maintenance company -- mulch, fertilizer, and plants, just to name a few expenses.Emerging landscape business owners often find themselves using credit cards – and sometimes multiple credit cards -- to pre-fund their projects or to start up their season, which often costs a lot of money in interest charges.


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