How do you get to 15-20% margins in landscape maintenance?

Ijustwantausername

LawnSite Silver Member
Location
Raleigh NC
After owner salary I would love to get to these numbers since we are currently at 10.5% margin year-to-date. I just took a 16K cut in salary so I am curious how the numbers will look on account of this in the next few months.

We will do $400-430K this year, up from $310K last year.

My biggest line item is employee wages. Other than firing one of my guys and me working in the field more I simply don't know how to get my margins up.

I have been thinking very seriously about ditching maintenance and doing something else with higher margins unless there is benefit to sticking it out until 1 million+, which I will do if that changes things. From what I can tell it seems like all of the larger landscape guys have their money troubles taken away when they got beyond a million, who knows?

I am grateful we are not in the negative, however margins are suffering with the added people needed to grow. I expected this but didn't think it would tank margins this bad. Maybe it is normal, who knows. I cannot seem to find a good benchmark for this.

What metrics do I need to pay attention to?
 

landscaper22

LawnSite Bronze Member
Location
South Carolina
I can't answer this question as I don't have crews, but I keep trying to run numbers in my head, and all the employee problems aside, I don't see how you can do much better than 10-12%. I would think 15% would be amazing. Now, in my mind, it would suck if you had one crew, not including you, that generated over 200k per year and you could only profit 20k. But then, my brain also says, well, if you have 3 crews generating 20k in profit eqch year, that's not terrible. But that would of course have to be after the owner takes a salary. For me, there are just too many if, ands, and buts, to know what we would be capable of profiting. Mowing just doesn't seem profitable. One crew including the owner working in the field, seems to make the owner a decent living. I guess the money is in high volume. If I could do a million and profit 10% I would take it I guess. I am always playing with number to see if I would be making a mistake by growing. Not sure if the headaches are worth it for me, but my body won't continue to hold up with all the problems I am having.
 
OP
Ijustwantausername

Ijustwantausername

LawnSite Silver Member
Location
Raleigh NC
Yep, couldn't agree more about the labor side of things. As a buddy has said, maintenance is bread and butter. I'm just trying to figure out if I want to keep doing this for the low margins. Would much rather have a 500K business at 20% margin than 1Mil at 10%.
 
OP
Ijustwantausername

Ijustwantausername

LawnSite Silver Member
Location
Raleigh NC
30% growth is hard to absorb in 1 landscape maintenance. You are selling labor. Raise prices. And then take your current customers and upsell at higher margins
Yep, thats what I've been doing so far. Every year I go up on 90% of my maintenance accounts. Sold a good amount of upsells and enhancements this year too.
 

SilverPine

LawnSite Member
For us, maintenance pays the bills and leads us to the higher paying aspects of landscaping. Construction and gardening is our real profit.

Unless you have very high volume, maintenance alone is not going to make you rich. I'm sure it's possible, but rare.
 
OP
Ijustwantausername

Ijustwantausername

LawnSite Silver Member
Location
Raleigh NC
For us, maintenance pays the bills and leads us to the higher paying aspects of landscaping. Construction and gardening is our real profit.

Unless you have very high volume, maintenance alone is not going to make you rich. I'm sure it's possible, but rare.
What type of construction do you do?
 
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