3 Costly Mistakes to Avoid When Starting a Landscaping Business
Landscaping is an attractive market for new small businesses. One reason is that the barrier for entry is rather low and people interested in it have often grown up with the needed skills. That said, about 80% of landscaping startups fail within 18 months. Often, it’s due to cost-related mistakes. Let’s explore three of the most common and how to avoid them.
Improper Equipment Investment
While professional landscaping has a low barrier to entry, it does require some capital, and much of that goes toward equipment. In fact, poor equipment choices are a top reason landscaping companies fail. A common mistake is trying to stretch a budget with cheaper equipment with the intent to upgrade it later. This approach often costs more in the end. If you can’t envision yourself using a tool in a year or two from now, you shouldn’t purchase it.
The other issue is buying too much. Don’t buy what you’ll eventually need. That consumes your budget unnecessarily. Only purchase what you need when you need it.
Avoid going into debt to buy the high-quality tools that will serve you well long term. Not everything you buy needs to be new. Social media has made it easy to find secondhand lawn equipment locally. Investing your time and money into used but high-quality lawn equipment can make the difference between being successful and not.
Ignoring Seasonal Market Trends
The landscaping market in your area largely dictates what you can charge. In order to be successful, you have to maximize profits within those limitations. One way to do that is to generate leads proactively and effectively rather than rely solely on word of mouth.
Another is to have a plan in place for each season. The price for services goes up during those seasons in which they’re most in demand. These are the services you should emphasize to maximize profits. You can also use promotions and bundling strategies during these periods as well.
Look for opportunities in the off-seasons too. Monitor how other landscaping companies are successful during these periods. Focus on awareness too. A homeowner may know exactly what you can do for them during spring and summer. What you can do for them in fall and winter can be a lot less obvious. Diversify and differentiate your services, and educate your customers.
Uncompetitive Pricing
Unrealistic pricing is a downfall of many would-be landscapers. The best landscaping contractors charge a fair rate for a job well done. What is a fair rate is dictated by your local market. Don’t undercut yourself to build your business. It’s not financially feasible, and consumers will often know that you’re underbidding and be cautious. Know what your markup should be. Calculate your material and other overhead costs accurately. You can cut into your markup some, such as for coupons, but never into your overhead. You may also want to look at competitors within the same field and get a sense as to what they charge.
Plan for Success
Most small businesses fail because the entrepreneur lacks awareness of the pitfalls ahead. Research the potential challenges. Plan to overcome, and success will follow.
