Annual Account Growth Rate In First 5 Years Of Business?

Discussion in 'Business Operations' started by The Swamp Fox, Sep 7, 2019.

  1. The Swamp Fox

    The Swamp Fox LawnSite Member
    Messages: 35

    In the midst of planning a lawn and landscape maintenance start-up, and found myself wondering what the annual account growth rate of other LCO's has been in, say, their first 5 years of being in business.

    I know there are many factors that affect this, such as amount of competition, amount and quality of marketing materials used, network size, etc., but figured I'd ask all the same. Will be interesting to hear at what rate other LCO's ramped up over time in terms of accounts serviced per year!
     
  2. GRANTSKI

    GRANTSKI LawnSite Bronze Member
    Messages: 1,796

    There’s definitely a lot of factors. Took me 5 years to get to $60k gross solo. That’s in a small area with almost no new homes and mostly senior citizens. Dropping low payers and off route customers over time so I could be grossing $80k but I’m not the 12hr days guy. My back is too messed up to be chasing underpaid work.
    No website but some basic marketing.
    So I think year 5 getting to $100k is possible with full marketing . But then there are plateaus that are hard to break. I think 10-20% growth per yr should be a minimum goal. Having a specific number in mind helped me (mentally) to push sales and get to that #. But this year has been another “trim the fat” year for me. Now that my routes and pricing are definitely where they should be - I’m ready to expand.
     
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  3. OP
    OP
    The Swamp Fox

    The Swamp Fox LawnSite Member
    Messages: 35

    Thanks for the feedback, @GRANTSKI! Sounds like you're running a tight ship. I know some are reticent to post revenue numbers, not to mention the topic of annual revenue obtainable has already been beaten near to death. I appreciate you sharing your experience.

    I was hoping to steer clear of ruffling any feathers with yet another "gross/net revenue" thread by asking about number of accounts/clients instead of revenue. I'm most curious about how many accounts others ended up obtaining in their first year of business, and how that grew in the four years thereafter.

    To provide some context, I have the option to launch my new solo operation in spring of either 2020 or 2021, and am trying to get a feel for how many clients are usually obtainable in the first year with some on-point marketing.

    One option for me is to flesh out my equipment roster between now and this coming spring, then use the 2020 growing season to familiarize myself with it and become a master at operating it on my own property. I would then plan to start marketing heavily that fall for commercial accounts and hit the ground running in spring of 2021 for residential accounts.

    The other option would be to obtain my equipment by next spring and immediately attempt to hit the ground running, picking up customers throughout the year.

    The first approach appeals to me far more than the second, as I tend to be methodical and meticulous in most of what I do and would hate the idea of learning my new equipment on-the-fly while servicing customer properties. I want to be confident in my tools and abilities with them before I market to potential clients, if at all possible.

    If I could obtain twenty or so clients in my first official year of business, I think that is definitely the route I will go. But if it's not unusual to only obtain 5-10 accounts that first year, maybe that "red shirt" year amounts to an unnecessary delay.
     
  4. BigJlittleC

    BigJlittleC LawnSite Fanatic
    from Chicago
    Messages: 6,240

    Amount of clients you'll gain first year will be dependent on the level of marketing and salesmanship you put out.

    My first year I had 3 clients which provided me with 20+ properties to cut a day. My 2nd year dropped all 3 of those clients and started gaining residential accounts. If my memory is correct I had about 35 mowing clients and 15 or so one time jobs that season. My advertising at that point was flyers only. Now that I'm in my 7th season I have a solid core of 40 full service clients with 18 mow only and a handful of one off clients.

    Money wise first year to second saw a 45% increase in gross sales. With around 20% growth each year following.
     
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  5. JeremyKuhn

    JeremyKuhn LawnSite Senior Member
    Messages: 601

    Depends on your area, advertising and capabilities. I don't have a huge market but there is plenty of work, my advertising is kicking in after 6 years and I'm turning things down more and more.

    I had between 50-100% growth every year so far but might need to slow it down unless I can find enough if the right employees. I'm at about max capacity for what I can manage.
     
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  6. GRANTSKI

    GRANTSKI LawnSite Bronze Member
    Messages: 1,796

    My advice is to start in fall with cleanups and do an amazing job to win ppl over so you can hopefully start spring with some existing clients
     
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  7. BrendonTW

    BrendonTW LawnSite Bronze Member
    Male, from Oklahoma City
    Messages: 1,049

    Year 1 $6000
    Year 2 $18,000
    Year 3 $80,000
    Year 4 $180,000
    Year 5 $260,000

    Might not be exact but is close. Year 9 was last year and $1.05m.
     
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  8. BrendonTW

    BrendonTW LawnSite Bronze Member
    Male, from Oklahoma City
    Messages: 1,049

    Shooting for $1.312m year 10 (2019).
     
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  9. KAZ

    KAZ LawnSite Member
    Messages: 146

    Year 1: $36k
    Year 2: $112k?
    Year 3: $252k
    Year 4 (current): $495k on track for $600k for the year.
    Year 5 (goal): $1mm
     
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  10. KAZ

    KAZ LawnSite Member
    Messages: 146

    Just checked quickbooks, I was off on my numbers for this year. We are at $447k currently. I am still expecting to sit around $600k this year.
     
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