Can A New LCO Land Commercial Accounts?

The Swamp Fox

LawnSite Member
Location
Michigan
Hello all, new member here working on planning a solo LCO start-up. In the process of crafting my business plan, I've determined that my ideal client or "avatar" may well be mid-sized commercial accounts.

My question is whether a new-to-the-scene but professionally operated, branded, and marketed LCO has a decent shot at landing bids for commercial accounts.

From what I've read, the somewhat typical path of progression for many new LCO's seems to be starting out in residential, then working their way up to servicing some commercial accounts over time. I am unclear if this is simply because there are lower barriers to entry in residential service (smaller equipment, no contracts, no requirements for insurance), or whether it is because commercial accounts typically ask for references / prefer established LCO's with experience.

I'm aware that the going rates for lawn / landscape maintenance on a per-acre / per-hour basis typically decline as properties scale up in size compared to postage stamp lawns, but that's a trade-off I'm willing to make for sake of job enjoyment. It's just a matter of knowing myself — I wouldn't make a good high-volume, mow-and-blow guy.

Now for some context. I live under a mile from a nice-sized industrial park on the local city outskirts, which is filled primarily with industrial companies possessing lawns ranging from 1–4 acres in size. Most of these properties outsource their landscape maintenance, making them potential customers.

From the outside looking in, I believe mid-sized commercial accounts such as these and those similar — such as local churches ranging in size from 4–8 acres — represent my ideal client base. There's a couple of reasons for this:
  1. My goal is to run an extremely efficient operation in support of my ideal work-life balance. It seems to me that meeting revenue goals with larger properties belonging to a small number of commercial accounts rather than small properties belonging to a higher number of residential accounts will make for less time wrapped up in overhead like customer phone calls, special requests, pet / toy / property access issues, billing, windshield time, and planning routes.

  2. One of the things I enjoy most about lawn maintenance is the act of mowing itself, which I enjoy far more than string trimming, edging, or blowing. Laying razor-straight stripes does something for my OCD complex, and I've always found time in the sun on the mower to be a stress-reliever. I think focusing on mid-sized properties (1.5–4 acres) will prove more rewarding than will the typically much smaller residential properties which involve a much lower ratio of overall time spent mowing compared to operating handheld equipment.

  3. I've read that commercial accounts may be more likely than residential accounts to favor bidders on the low end of the price spectrum. I think this may play to my advantage, as it may be easier to initially break into commercial work than into residential accounts who already have a relationship with another LCO. I suspect I will have a significantly lower overhead / labor cost than will the local competition due to my proximity to these properties, my structure as a solo operation, and some other operational factors, which should enable me to maintain profitable margins at attractive price-points.

  4. I hate the idea of being watched while I work. This would not be an issue on these commercial accounts, which are located on quiet streets. This is a stark contrast to residential or smaller commercial work which could well be along main thoroughfares.

  5. Caring for aforementioned commercial accounts would enable me to mow early mornings, late nights, or weekends should conditions allow and I so choose, something that I would have less flexibility with if servicing residential accounts. This would give me more flexibility to maintain my ideal work-life balance, an important consideration for me.
Since I plan to structure my equipment roster, branding, and marketing in such a way as to target my desired client, the question I'm left with is whether LCO's new to the scene find it challenging to land commercial accounts, or whether this is a feasible business plan.

For what it's worth, my degree is in business and I have extensive experience in the project management profession, currently serve as the Treasurer for our HOA, and derive a sadistic pleasure from digging through legalese and fine print. All this to say that the contractual and other business-related aspects of dealing with commercial accounts don't overly faze me.
 

Mumblingboutmowers

LawnSite Senior Member
Commercial really isn't any harder to get than residential. But there are more residential jobs than there are commercial. I don't think it would be wise to try to be "commercial only". You best take what you can get when getting started and weed them out someday far down the road. It really helps to know someone working at a commercial facility, but if you don't, start sending them a letter once a month to let them know about you and your services and maybe they will call you for a quote the next time they decide to look for a new mowing service.

Commercial in general doesn't pay as well as most people believe. You are still dealing with people and instead of dealing with toys and lawn furniture you will be dealing with trash. Depending on the commercial setting you may also have more liability hanging over your head if you need to mow around people and parking lots.

The other issue I see with commercial is less job security. You are more likely to be replaced than you would be on residential jobs.

It takes years to acquire and ideal customer base/route. I wouldn't try to or expect to do it upon starting a business.

Sounds like you are serious about getting into the lawn business and I wish you success, just don't be too picky right off the bat.
 
OP
T

The Swamp Fox

LawnSite Member
Location
Michigan
Commercial really isn't any harder to get than residential. But there are more residential jobs than there are commercial. I don't think it would be wise to try to be "commercial only". You best take what you can get when getting started and weed them out someday far down the road. It really helps to know someone working at a commercial facility, but if you don't, start sending them a letter once a month to let them know about you and your services and maybe they will call you for a quote the next time they decide to look for a new mowing service.

Commercial in general doesn't pay as well as most people believe. You are still dealing with people and instead of dealing with toys and lawn furniture you will be dealing with trash. Depending on the commercial setting you may also have more liability hanging over your head if you need to mow around people and parking lots.

The other issue I see with commercial is less job security. You are more likely to be replaced than you would be on residential jobs.

It takes years to acquire and ideal customer base/route. I wouldn't try to or expect to do it upon starting a business.

Sounds like you are serious about getting into the lawn business and I wish you success, just don't be too picky right off the bat.
All salient points — I appreciate you weighing in with your experience. It's encouraging to hear that commercial is not necessarily harder to break into than residential, although the smaller number of overall jobs may mean chances of landing a bid are not as high.

I can definitely see the job security being on a bit more shaky ground. I'm also cognizant of the fact that setting up a route comprised of, say, 5-10 commercial accounts creates a significant revenue / cash flow risk if you were to lose just one account, far more so than if you were "diversified" — to borrow an investing term — across 30-40 smaller residential accounts.

I don't want or plan to be overly selective with potential clients, and if anything I will probably end up becoming overly lenient with those I do take on as I have a hard time saying no in general. But at the same time, any income generated will simply be discretionary to our existing lifestyle, which I feel gives me a little more freedom than would otherwise be the case when targeting ideal customers / accounts.
 

BigJlittleC

Banned
Location
Chicago
Commercial is usually lowest bid wins. The ones that are looking for top quality will want a proven track record. That's not to say you couldn't land a few with a fake it till you make it approach.

If your able to get your marketing materials in front of the right people you can land any account that your capabilities allows.

Since your at 0 clients I would pursue every lead and find the niche market you fall best into. When I started I figured I was going to be a mow and blow guy. Quickly found myself enjoying the full service and gardening clients much more. Plus the margins are much better then mowing.
 

Gus McGee

LawnSite Senior Member
Since you will be flying solo you can easily land commercial work. Most commercial accounts are about coming in with the lowest bid and doing just barely acceptable work. There are exceptions to that, but as a general rule that is the way of the world. Since you don't have to pay employees you can offer very competitive bids. Just don't sell too low and work for coolie wages.

As long as you look professional, know what you are doing, and can handle the full scope of basic landscape maintenance offerings you can get commercial work. Just go out banging on doors so to speak.

Just don't get yourself in over your head and bid on larger projects that you can tackle.
 

Mac-s Lawn & Snow

LawnSite Bronze Member
While I'm new to lawncare, I've been in the landscaping business for 30 years. I'd say 80 percent of the commercial work I've done comes from referrals or because I was already working in the area. Thats going to really limit you from the start. You should already have a website going and stating your launch in the spring. Image and branding and SEO will need to also be mastered before startup. I think this is most important-You need to be able to sell. Outside sales can be brutal. You must have some charisma and a good personallity to have success.

Do you plan on working for Property Management Organizations? I'd be targeting the local ones and avoiding ones on the other side of the country.

With all this being said I'd probably budget around 80k to 100k dollars for your startup. I'd like to see your business model sometime(send me a PM and I'll give you my email) and I wish you good luck.
 

Hayduke

LawnSite Senior Member
Location
Oregon
But at the same time, any income generated will simply be discretionary to our existing lifestyle, which I feel gives me a little more freedom than would otherwise be the case when targeting ideal customers / accounts.
Don't be that guy. If you don't need the money, then price your services as high as you can. Then it will at least be worth your time and you won't won't be lowballing the guys out of business who really need the work.
 

Mumblingboutmowers

LawnSite Senior Member
While I'm new to lawncare, I've been in the landscaping business for 30 years. I'd say 80 percent of the commercial work I've done comes from referrals or because I was already working in the area. Thats going to really limit you from the start. You should already have a website going and stating your launch in the spring. Image and branding and SEO will need to also be mastered before startup. I think this is most important-You need to be able to sell. Outside sales can be brutal. You must have some charisma and a good personallity to have success.

Do you plan on working for Property Management Organizations? I'd be targeting the local ones and avoiding ones on the other side of the country.

With all this being said I'd probably budget around 80k to 100k dollars for your startup. I'd like to see your business model sometime(send me a PM and I'll give you my email) and I wish you good luck.
80k-100k dollars for startup? Especially for a solo operation?
I think the guy is just trying to start a profitable business, not a multimillion dollar company.
 

Mac-s Lawn & Snow

LawnSite Bronze Member
80k-100k dollars for startup? Especially for a solo operation?
I think the guy is just trying to start a profitable business, not a multimillion dollar company.
well,

OK, say the OP has a truck and that takes $40k of my estimate right there. Nows here the list of equipment and expenses I see:
Enclosed Trailer
60" ZTR propane powered
Hand helds
36" small area mower
Truck and trailer wraps
leaf loader
dump trailer
snowplow
Website SEO google ad money
Accountant

It all adds up and sure it can be done for a lot less money. If the OP wants to land commercial accounts first year it is going to be tough with a 20 year old F150 and a mesh trailer. He will need to have his image marketing and branding figured out before he cuts his first blade of grass. Personally, I don't like commercial work and think it will be a very challenging business model to implement but it can be done and I want to see him have success.
 

fireball756

LawnSite Senior Member
Sure you can. I have been around a long time and have witnessed hundreds of guys start like you Suddenly they just appear, each being the best, world class, amazing, “green”, “carbon neutral”, cost efficient, IPM, and minority owned. They become so good at it that their work life experience enables them to disappear. For example, Jon Debella was a Philadelphia disc jockey making the big bucks. Suddenly he became a landscaper. He would fly to the nursery in his helicopter, fly the plant material to the job site, drop the plants from the sky and declare the result glorious. Here is the bill. You can’t get any more efficient than that. You have to ask Howard Stern where he is now
 

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