PDA

View Full Version : Money in landscaping biz


Roachy
06-16-2011, 12:59 AM
I would like to hear some feedback from those out there who have established lawn maintenance and landscaping companies. I havent been in the business long enough but I would like to know if you guys think it is hard for an established business owner with a college degree to make over $150K/yr in this business? I am not talking about the guy running a lawn mower gig out of his garage, but a fully licensed company that has been established for at least 5yrs. I am also referring to the northeast part of the country or any other parts that have a middle class in the $75k-$100k income range. I am looking not so much gross income of the business either. I dont want to hear comments from ppl saying they pay so much in expenses that they make nothing cause I obviously know thats a load to throw at young kids trying to get started. For those out there that make minimal money in this business Im sure it has to do with the direction of your business or your part of the country.

Frue
06-16-2011, 08:10 AM
def can do it. where you are from you should be able to do even more! It may take a while to build routes and get the maintenance needed to do it but you can def do it...

GravyTrain
06-16-2011, 08:53 AM
I'll say this, my plan in the next 3 years running out of my garage (fully insured and licensed, completely legit), after expenses, probably still solo, to make between 60k-70k pre income tax during the roughly 8 month mowing season. That is after equipment maintenance/purchase and other business expenses.

Although I have no guarantees, I feel comfortable I can be there.

topsites
06-16-2011, 09:13 AM
I suggest you put in your first day.

Roachy
06-16-2011, 11:06 AM
Thanks guys. And yes topsites I have been working a lot lately. This is my first yr starting up my business and Im sure I have been pulling in 3-4K a month or more. The problem is I have to sub out fert programs, sub out hardscapes, sub out major renovation jobs, and dont buy plants at wholesale prices either yet. Ive always done well in school and have thought about studying more to go into a medical profession but now im starting to think, I can make just as much doing this stuff. If i were to go into Physical therapy or some similar field, id probably be making $70k-90K/yr. Im sure I could easily make that working half the year and doing work that I love in landscaping.

madisonpressurewashing
06-16-2011, 12:04 PM
Go to school i say

GravyTrain
06-16-2011, 01:01 PM
get an education...some sort of education, that is invaluable...not to mention the experience of living life as a college student...you get so many free passes....

but at the end of the day...do what you love. Doesn't matter if you make 20k a year or 220k a year....you have to wake up every morning and do something, why not do something you love.

ALC-GregH
06-16-2011, 01:13 PM
Thanks guys. And yes topsites I have been working a lot lately. This is my first yr starting up my business and Im sure I have been pulling in 3-4K a month or more. The problem is I have to sub out fert programs, sub out hardscapes, sub out major renovation jobs, and dont buy plants at wholesale prices either yet. Ive always done well in school and have thought about studying more to go into a medical profession but now im starting to think, I can make just as much doing this stuff. If i were to go into Physical therapy or some similar field, id probably be making $70k-90K/yr. Im sure I could easily make that working half the year and doing work that I love in landscaping.

What's the problem then? Is it that you don't know how to do the other work or you don't have the funds to get what you need to DO the other work?

You can easily make that much and more. It takes a lot of hard work and endless days that seem to blend right together to a point that you don't do anything but work. Chances are you'll need help doing the other work you mentioned. If the work is there enough and is maxing you out, find a friend in need of some extra cash until you can hire full time help. There's a pretty drastic fall when it comes time to hire a legitimate employee when it comes to income. You could be maxed out with work for your self and be rolling in the money BUT, once you hire it's going to drop drastically until you max out BOTH of you with work. A second employee will be easier to afford if you get the work flow going.

2ndNature
06-16-2011, 04:37 PM
Roachy-

I would suggest you stick to mowing and making customers happy for at least 5 years before you jump to trying to make $150k/year landscaping. The added cost of landscaping requires a LOT of capital to do it right and in less you have around 50% down then a bank will just laugh when you ask for a loan.

To actually PROFIT $150,000 you will need to DO close to $1 million in business.

Now, I am in Omaha not NJ but I am lucky because the down ecomony has had less effect on us like it has other parts of the country.

My company currently mows 100 lawns weekly, 120 ferts(6 steps), and have a full time landscape crew and a part time designer. Plus snow in the winter.

I have to have a Gross profit of $20k/month just to pay my salaries and overhead. And that is daunting some months. Oh yeah, I make NO WHERE near $150,000 per year.

In all honesty, I could almost just mow, fert, and push snow SOLO and make close to what I do with everything.

Roachy
06-16-2011, 10:33 PM
I do have some people that are already helping me part time because sometimes the work is just too much for one person. People always say do what you love, but the bottom line is most people work because of money. I dont hate this kind of work, but I feel that I have a pretty good eye at judging quality work and feel that I can make good money at it. Im only 22 though and at a cross roads in choosing a career path so I dont want to waste my time doing these jobs if I feel Im not going to be successful staying in this business.

2ndNature: I figure with your 100lawn accts and 120fert programs youre probably avging $40 a lawn and $85an app. This is assuming you are mostly residential also. That would probably be about 16K/month in lawn accts and 9K or so in fert programs. Since you have a designer Im sure you can easily pull in another 20K a month in hardscapes. 45K a month minimum for your business? Not sure how much youre paying your employees but sounds like you are doing ok to me.

Frue: I think you are right considering youre from the northeast. Ive heard of guys not too much older than me that pull in over 100K just doing some commercial snowplowing.

Its just hard for me to consider 4years of undergrad at 40K a year and another 3yrs of grad school to get an MBA or medical degree when guys in this business will pull in just as much. Not everyone can run a business and Im sure its definately not easy the bigger you become, but Im just seeing whether the potential for money is there.

topsites
06-16-2011, 10:39 PM
Well, roachy, unlike what a lot of folks would like to think, I have come to the hard realization that in this world, it all evens out.
Folks would like us to believe that in a business, the income potential is unlimited...
And perhaps the potential is, but the reality is that our income is fixed.

It is fixed by the balance, it all evens out.

It would be great money, but the more money you make, the sooner the competition will come
racing down the very street you were just yesterday working on all by your lonesome self.

It would be great money, if the manufacturers weren't squeezing every dime out of us first with the machine, then with the parts, last but not least labor.

It would be great money if it weren't that the harder you work, the less time you have for everything else.

In the end it all evens out.

You can do like I do, work less for more money, slow hours, not a big bad gross to brag about,
but because I do most everything, it's very low expense. When a machine breaks, because I have
plenty of time on my hands, I fix it.
$200 I don't have to spend.
You can take that however you like, it's $200 I don't have to begin with, but it's also $200 I am not paying someone else.

Or you can work like others, work all the time, lots of hours, big bad gross at the end of the year...
And so many expenses it's a wonder they net what I do. When a machine breaks, they're so darn
busy they don't have time, besides they make the big bucks, so they pay someone to fix it.
$200 they no longer have, they might rake in a quarter of a million or more a year...
But in the end, how much is left?

In the end, it all evens out.

Landscape Poet
06-16-2011, 10:48 PM
Roachy-

I would suggest you stick to mowing and making customers happy for at least 5 years before you jump to trying to make $150k/year landscaping. The added cost of landscaping requires a LOT of capital to do it right and in less you have around 50% down then a bank will just laugh when you ask for a loan.

To actually PROFIT $150,000 you will need to DO close to $1 million in business.

Now, I am in Omaha not NJ but I am lucky because the down ecomony has had less effect on us like it has other parts of the country.

My company currently mows 100 lawns weekly, 120 ferts(6 steps), and have a full time landscape crew and a part time designer. Plus snow in the winter.

I have to have a Gross profit of $20k/month just to pay my salaries and overhead. And that is daunting some months. Oh yeah, I make NO WHERE near $150,000 per year.

In all honesty, I could almost just mow, fert, and push snow SOLO and make close to what I do with everything.

The question is why are you incurring all the extra overhead then?

topsites
06-16-2011, 10:51 PM
Is it possible?

Man, let me tell you...

The United States (and actually the world) has underwent a weather pattern that is just unreal.
It floods in some areas, dry as a desert in others, nobody's getting the right amount of rainfall and it's not that
we're off by an inch or two, we're talking the banks of the Mississippi are overflowing on the one end, and on the
other we have boats sitting on dirt surrounded by grass...
And you'd think, no way there was water there...
Except there's a pier!
The boats are tied to a pier, sitting on dry land.

This has been going on since my 6th year.
It is now my 10th year.

We depend on the weather for our survival.

Then there was the stock market crash in 2008 and the whole thing with the economy,
but that's just icing on the cake of crap some of us have to eat every day.
Rest assured, the grass is not greener this side of the fence.

Things have not been easy.

And I am not making this up...

Get Some...
06-16-2011, 11:05 PM
Well, roachy, unlike what a lot of folks would like to think, I have come to the hard realization that in this world, it all evens out.
Folks would like us to believe that in a business, the income potential is unlimited...
And perhaps the potential is, but the reality is that our income is fixed.

It is fixed by the balance, it all evens out.

It would be great money, but the more money you make, the sooner the competition will come
racing down the very street you were just yesterday working on all by your lonesome self.

It would be great money, if the manufacturers weren't squeezing every dime out of us first with the machine, then with the parts, last but not least labor.

It would be great money if it weren't that the harder you work, the less time you have for everything else.

In the end it all evens out.

You can do like I do, work less for more money, slow hours, not a big bad gross to brag about,
but because I do most everything, it's very low expense. When a machine breaks, because I have
plenty of time on my hands, I fix it.
$200 I don't have to spend.
You can take that however you like, it's $200 I don't have to begin with, but it's also $200 I am not paying someone else.

Or you can work like others, work all the time, lots of hours, big bad gross at the end of the year...
And so many expenses it's a wonder they net what I do. When a machine breaks, they're so darn
busy they don't have time, besides they make the big bucks, so they pay someone to fix it.
$200 they no longer have, they might rake in a quarter of a million or more a year...
But in the end, how much is left?

In the end, it all evens out.

I agree 100%.

pdenney11
06-16-2011, 11:14 PM
Get the education first. I hated school but stuck it out to get a business degree and it was the best decision I ever made.

All we do is mow. We are starting to look toward more landscape installs and maintenance. Just seems like you have to mow a lot of grass to make a decent living in my area. My profit margin on the landscape maintenance part of the business is much more than the lawn maintenance. We do specialize in lawn maintenance but to be honest it's just not cutting it for me anymore. This is our 5th year and in the next 3 years I would like to have enough mowing to keep two guys busy all week while I run a part time landscape crew. I never wanted to be a "lawn guy" and it's time to make some changes. We will still sub out our weed control and irrigation because I have no experience in those services and would feel more comfortable letting the pros handle it.

Kelly's Landscaping
06-17-2011, 12:11 AM
Its just hard for me to consider 4years of undergrad at 40K a year and another 3yrs of grad school to get an MBA or medical degree when guys in this business will pull in just as much. Not everyone can run a business and Im sure its definately not easy the bigger you become, but Im just seeing whether the potential for money is there.

You really don't have a clue do you the reason most go to collage to to avoid working. You sound as if you have a class envy issue. Yes the guys who make the most will always be business men BUT the ones that reach multi-millionaire status are so rare its not funny. You want the truth about this trade last year we took in 217,000 we paid out 218,000 you still want in this trade. Every time you think you can start to coast something becomes to old and needs replacing cause the repair costs have reached to high a level. There are benefits to this trade but all trades have them but I do enjoy riding around in my 2011 ram 4500 crew cab. And so far it seems to have been the right call as its reduced my repairs compared to last season. In fact I want to get her a sister next year. But understand this the guys that claim 30-50% profit do not pay themselves as employees if you take a paycheck you can look forward to a 5-15% profit a year. And on your example of 150k say you make 10% now you got a profit of 15,000 a new ztr with a bagging system plus sales tax can cost that much now you have 0 profit accept on paper.

MR-G
06-17-2011, 12:53 AM
the bigger you grow the less your net % gets...but it gets it from an ever growing gross if you keep building....example 100k gross...you and a helper may net you 30k or 30%....now take yourself out and hire one to take your place and you may see 10k or 10%....or less....but now you can start another crew....if you can net even 10% or 10k a year from 1 crew...you could just duplicate the same senario over and over.....40 crews may net you 400k....just an example...you could net more or less depending on how you do it...personally i would put every dime back in until i at least got to 100k net...and i would absolutely stay AWAY from financing....it may take longer to get going..but will be better in the long run....the really big money will come at the sale of the company one day.....if you dont build a co.that runs without your every minute of attention you will not get big money for it when you sell....but hey...you may want to hang on to it for many many years and never sell it....whatever the case i would much rather net 10% of 1m gross than 30% of 100k......its a no brainer for me.....im not there yet myself but am on my way...still have a long tough road ahead but i stay focused and dedicated..one thing i have learned is that less is more..keep your service as simple and routine as possible...you dont have to be the jack of all trades.......good luck to all on here ...:usflag:

MR-G
06-17-2011, 01:10 AM
The question is why are you incurring all the extra overhead then? no pun intended but he is trying to be a jack of all trades (so to speak) and thats great for his customers..but it makes it hard to really be as efficient as he needs to be to make a good net....offering more and more services always seems good on paper...but the reality is its very hard to do...and remain viable...not impossible but close...imo:usflag:

Roachy
06-17-2011, 01:54 AM
I hear what a lot of you are saying and I guess not everyone runs their business the same. If you take out loans on equipment, trucks, business location, mortgage etc it becomes difficult to make 20 30 or 40% of your net. Some companies make the same when they grow as they use to when they were smaller. And Kelly, I'm pretty sure people dont go to college to avoid working. Maybe to avoid physical work, but not everyone that goes to college comes out making a lot of money either. I already have a degree, attended a pretty reputable private university, but want to see what I can do trying to run things myself. Its funny how varied responses are on these kinds of questions. If only 5% of the people in this business become very successful, then thats a good enough answer for me.

MR-G
06-17-2011, 02:38 AM
I hear what a lot of you are saying and I guess not everyone runs their business the same. If you take out loans on equipment, trucks, business location, mortgage etc it becomes difficult to make 20 30 or 40% of your net. Some companies make the same when they grow as they use to when they were smaller. And Kelly, I'm pretty sure people dont go to college to avoid working. Maybe to avoid physical work, but not everyone that goes to college comes out making a lot of money either. I already have a degree, attended a pretty reputable private university, but want to see what I can do trying to run things myself. Its funny how varied responses are on these kinds of questions. If only 5% of the people in this business become very successful, then thats a good enough answer for me.by not financing you will be off to a slow start..but, it will quickly speed up the more crews you have paying to start the next one the easier and faster it goes...at some point it wouldnt be far fetched to be able to open a new crew every 90 days or so....develop a system that works and copy,copy,copy it..:usflag:

2ndNature
06-17-2011, 06:54 AM
topsites is 100% correct- everything is a trade-off.

I would say more like 1% reach that $150,000 mark. And in all honesty the ones that do usually had a big headstart somewhere in their past.

Good luck

2ndNature
06-17-2011, 07:51 AM
Roachy-
I think you are shooting WAY high if you think you are going to make 20-30-40% NET.

Yeah you can hit those percentage #'s if you stay small. Hell you can net 60% if you stay solo. The bigger you get the smaller your net. To have a company that will make you $150,000 per year, your net will most likely be in the 15-20% net. That means you need to do $1,000,000 in annual sales. That's roughly $20,000 per week all year long.

Rough Example: $10,000 Patio Job
-$3,000 in materials
-$2,000 in labor(including payroll taxes & ins)
So now you are already at 50% profit and you haven't even paid for fuel, equipment (skid loader, MT 52, dump trailer, job trailer, etc) trucks, shop, designer, utilities, insurance, office expenses (accounting, billing, biz insurance), marketting, etc.

Oh yeah- people here will say I just won't have payments because I will pay cash for all my equipment so that will mean more profit. That is just not reality. Even if you pay cash for everything today you still need to create a "reserve" of cash for the reality that everything we use will wear out. Some people have the discipline to do it and others don't. Either way you will always be paying for equipment in one form or another.

Also- topsites is 100% right. It's a balance. I have been on both sides and now that I am 40, I am going back to smaller at the end of this season. Make 20-30k less per year but only have to worry about ME!

I do like your enthusiasm and wish the best for you.

Mike Fronczak
06-17-2011, 08:25 AM
You have two problems here.
1. You want to make to much, I think 150K profit, doing maintenance, is a streach unless you get really large, the margins are just not there in the current economy.
2. Your subbing out the stuff that does still make money. Mowing is a break even, or loss leader for many companies. Pruning, installs, mulch, fert, etc. is where you make your margins.

Kelly's Landscaping
06-17-2011, 09:45 AM
Pruning, installs, mulch, fert, etc. is where you make your margins.

I would disagree with that pruning I do 10 k of it a year a 2 man crew brings in less a day doing it then mowing.

Mulch about 8k a year I constantly get underbid best case you make 50 a yard on top of cost and that never adds up few men can do over 10 yards a day for long.

Seeding is highly profitable 5-8 k a year for a mere 2-4 days work.

Fert we do about 25k a year this one has some nice profit my partner does over a grand a day solo on it but the costs are quite high as well. Also adding new accounts seems impossible these days the fert only companies advertize non stop we have been at those numbers for about 6 years now and not for lack of trying.

The installs is where most claim the money is but we do not do them the aggravation of always looking for the next job is a bit much. When we did them it would be like we made 3k today hehehee no we didn't I had to meet them then I often had to come back and present a bid then I got to spend sometimes 4 hours or more getting the materials. Add in plants and labor and before you know it I made them same as mowing.

Now mowing we do over 135,000 a year it is very consistent and we can see the profit is there if only we could set it up differently. Having the men work Tuesday, Wednesday, Thursday, Friday 4 days a week 45 hours or less keep the overtime in check. At 400 a man per day average that's 1600 a week per man that actually shows potential. But it never works that way cause we need to chase down all the quote profitable work that comes with the nearly 200 accounts we have. The dream set up for us is probably going to be 5 lawn crews 1 crew to do the pruning mulch seeding ect and Lou do do his fert and office work solo. Add in town plowing we will be going after as we convert to larger trucks and I can see that set up bringing in 800-1000k a year with just 10-12 employees.

Kelly's Landscaping
06-17-2011, 10:10 AM
I hear what a lot of you are saying and I guess not everyone runs their business the same. If you take out loans on equipment, trucks, business location, mortgage etc it becomes difficult to make 20 30 or 40% of your net. Some companies make the same when they grow as they use to when they were smaller. And Kelly, I'm pretty sure people dont go to college to avoid working. Maybe to avoid physical work, but not everyone that goes to college comes out making a lot of money either. I already have a degree, attended a pretty reputable private university, but want to see what I can do trying to run things myself. Its funny how varied responses are on these kinds of questions. If only 5% of the people in this business become very successful, then thats a good enough answer for me.

No I stand by that they go to collage to avoid working you are drooling over what some make but honestly do not see the hours involved to get it. Last 2 months My partner and I easily work 80-95 hours a week each. Got my first pay check of the year 2 weeks ago. You think its all physical work landscapers are problem solvers and the ones that aren't do not make it. Most who go to collage take on jobs around here at 60-100k a year hell even our cops make a 100k a year here. Teaching is rewarding but its not even close to what we do half the hours and none of the sweat.

Now you say if only 5% become successful well that is very subjective but you totally miss understood what was meant. It's not 5% its not even .5% I have 500 competitors in my general area minus out brickmen and trugreen and the fert only companies and none of them make a million a year. More then half don't see 50k a year gross just look at this site half are solo. If you want to be rich there are far easier paths to take. And yes I do have a loan on one truck of the 5 I own and my equipment its all paid for. I also have a loan on the land I use would you prefer I rent instead?

As for the companies that make the same as they grow as when they were small could you please name some of them and are they in the green industry or retail which is far far more likely.

Roachy
06-17-2011, 07:10 PM
A lot of this doesnt seem to make sense to me.
2ndnature, you are saying that your profit margins are only 15%. So if you pull in 500K in sales, you are spending 425K in expenses? Im sure I could pull in 75K just cutting lawns solo.

Kelly, thanks for taking the time to respond but Im not asking if you can make 1Million a year, Im just asking about people making only 150K. This is after 5-10years of growing a nice business. Mixture of residentail and commercial accts. Doing maintenance, install jobs, maybe small hardscapes, throw in some winter snowplowing.

Im not saying 150K after taxes, after the mortgage is paid, after the utility bills and phone bills are paid because everyone has to pay those no matter what field they are in.

Get Some...
06-17-2011, 07:25 PM
A lot of this doesnt seem to make sense to me.
2ndnature, you are saying that your profit margins are only 15%. So if you pull in 500K in sales, you are spending 425K in expenses? Im sure I could pull in 75K just cutting lawns solo. Kelly, thanks for taking the time to respond but Im not asking if you can make 1Million a year, Im just asking about people making only 150K. This is after 5-10years of growing a nice business. Mixture of residentail and commercial accts. Doing maintenance, install jobs, maybe small hardscapes, throw in some winter snowplowing.

Im not saying 150K after taxes, after the mortgage is paid, after the utility bills and phone bills are paid because everyone has to pay those no matter what field they are in.

:nono:

That is not all that easy to do........
Maybe before expense's it's easier, but not after....

Southern Elegance
06-17-2011, 10:02 PM
2nd nature is right . once you start grossing big bucks 300-500k your net goes down fast. also, this business is hard on your body, im not 40 and some mornings its painful to get out of bed.

pdenney11
06-18-2011, 12:13 PM
2nd nature is right . once you start grossing big bucks 300-500k your net goes down fast. also, this business is hard on your body, im not 40 and some mornings its painful to get out of bed.

It is hard on your body. I'm only 25 and after mowing and weedeating 40+ hrs a week I feel beat down. That's most of my reasoning for wanting to grow. I'd be more then happy to take a decrease in my net income to be able to have enough employees to take care of the physical work when I'm 40 years old. Then I can handle the accounting and estimate part of the business. No reason to beat yourself to death being solo just to make 30k more a year.
Posted via Mobile Device

Richard Martin
06-18-2011, 05:14 PM
get an education...some sort of education, that is invaluable...not to mention the experience of living life as a college student...you get so many free passes....

Why? So you can graduate, join the unemployed ranks and have $100 to $300 thousand in school debt? Most government jobs start at around $35k a year. It's gonna take you a while to pay off that debt.

You have to be extremely specific about the education you intend to get.

Only 45% of college graduates under 25 are working at a job that requires a degree.

willretire@40
06-18-2011, 07:18 PM
You can do $150k a year in Mowing only. I am not doing it but it can be done. You also cant do it solo. Actually you can really even be in the field. Here is what you need to do.

Focus on 1/4 acre lots.
Use only 32" walk behind mowers.
Use compact 4 cyc trucks without trailers.
Have all trucks wrapped.
Door hang 5 houses at every stop.
Focus on homes that are within 10 miles of your shop the first couple of years
Average lawn price of $35
1st page of google
Give prices over the phone.
One mower on the truck 2 kombi trimmers and 2 handheld blowers.

$35 per yard x 100 yards a week = $3500

Expenses per yard

Employees $13 including taxes and WC
Fuel $2 inculding truck and mower fuel
Advertising $3
Storage Fees $.50
Insurance $.30
Credit Card processing fees.

I cant think of every thing right now but you should profit $14 per yard before owner pay and corporate taxes.

$14 x 100 = 1400 x 30 weeks = $42k x 4 crews = $168k a year profit Gross would be $420k a year. I know my numbers arent perfect but you get the point.

Keep cost super low. No need to have 2 $7k mowers on the truck, back pack blowers, 1/2 ton trucks or trailers because as soon as you start adding those things your bottom line goes in the red quickly.

Now is it easy to get 400 customers Nope but it can be done in 4 years. Just depends how hard you will work to get them.