The Ultimate Lawn Care Business Expenses Spreadsheet
A lawn care business is one of the easiest work-from-home jobs you can get, but many people want to know: what does it cost to start a lawn care business? Here are some common expenses that go into a lawn care business along with a lawn care business expenses spreadsheet to get you started.
Business Setup Costs
If you want to set up a lawn care business, there are a few expenses up front to set up the business. You’ll need to register or pay for help with setting up the following:
- EIN This is your employer identification number, which acts like a social security number to identify your business for tax purposes. You can register with your state for an EIN yourself, but it’s also a service some companies roll into helping you form a business, so be sure to research your options and weigh costs against peace of mind knowing you filed all the right paperwork.
- Business Bank Account This shouldn’t cost you anything, right? But most bank accounts can’t be opened without a small amount of upfront capital deposited into the account. Some bank accounts also have extra setup fees.
- Legal Support Unless you want to process all your business paperwork yourself, you’ll want to pay a few hundred dollars per year for a registered agent service. You can also hire a business lawyer to pay by the hour or have on retainer, or hire a service that gives you legal support when you need it for about $600 per year.
- Tax Prep Your taxes might get complicated, so it’s best to hire an accountant or a service that gives you bookkeeping and tax prep support. Low end of this service will run you about $1,000 per year.
- Insurance If you set up a lawn care business, you won’t likely need licensing unless you want to apply pesticides. Look into your local requirements, but you will at least need basic liability insurance to protect your business, workers comp for any employees, and law liability insurance to cover any mistakes you make in paying employee salaries, for example. Insurance costs vary by the state in which you operate and the size of your business.
Lawncare businesses often start out with just one rider mower and a truck and trailer to transport the mower to work sites. If you start a lawncare business, you might want to rent or buy a few mowers and one or two employees, or work up to that from starting yourself.
- Lawn Mowers Rider mowers average about $15,000 apiece, but you can find used equipment or rent your equipment until you’re ready to buy.
- Truck and Trailer If this is your personal vehicle, set up your taxes to deduct mileage and associated costs. Trucks and trailers can run about $30,000-$50,000 for each set. Don’t forget to factor in maintenance costs.
- Lawn care Tools & Products Remember you may need extra tools for lawn care such as gardening equipment, chemicals, gloves, fertilizers, rakes and shovels, and so on. This will vary depending on which services you offer. Start with a minimum budget for tools and fertilizers that should be covered by the revenue for each early job. As you expand, you can invest in more tools.
You’ll want to consider how to “amortize” these expenses. tl;dr – you have a big expense, can’t pay for it all at once, how do you account for it over the coming years or months?
If you’re starting a lawn care business that will have employees off the bat, you’ll need to set aside revenue for salaries, and possibly healthcare and hiring costs. Employees should bring in extra revenue to the business that more than covers their overhead, but you could still be surprised by the costs associated with hiring.
- Salaries Employees of lawn care businesses often are paid by the hour, so you’ll need to track the time it takes to do each job and multiply jobs by the number of people you have to do the work. According to Zippia, the average lawn care worker salary is $28,108 per year, or $13.51 per hour, in the United States.
- Healthcare Do you have any employees on full salary such as an office manager? Factor in healthcare or other benefits package costs for those employees. Costs vary significantly by number of employees and level of benefits.
- Hiring Costs You might see high turnover with a lawn care business, so don’t forget to include hiring costs as you expand with employees. You might need to post an ad on a job board or in a local paper, to start.
Marketing your business will assure that business continues to come in. Marketing can include advertising, word of mouth, flyers or mailers, online business listings, and even events to promote your business. For a lawn care business, the primary marketing costs will likely be in advertising online, publishing local ads in papers or mailers, and making your website visible through good SEO, which might mean running a lawn care blog.
- Advertising Google Ads has options that allow you to set a budget and target a specific audience for your business advertising, which makes it one of the best options for advertising your services to people searching locally for a lawn care business. Start with a small budget such as $300 per month, and increase after testing different kinds of ads to see what brings in clicks or conversions to clients.
- Marketing Manager You may want to hire a marketing manager once you have the budget. This keeps your business visible through blogging and advertising with someone to manage those tasks full time, but it also means you have someone in charge of building your business and keeping it visible longterm. Marketing managers can also respond to complaints online for you and handle a bit of customer service.
Lawn Care Business Expense Spreadsheet
Okay so you’ve got all that written down? Here’s a lawn care business expenses spreadsheet in Google Sheets you can check out to get up and running.
You’ll need to fill in your variables such as your revenue from lawn mowing, revenue from larger jobs, how much you pay contractors, and more. We’ve also filled out some default variables such as costs for benefits and payroll taxes (within some degree of accuracy of what you can expect). We also pre-filled in a few other things such as professional website hosting.
How To Calculate Lawn care Business Expenses & Profit
Once you have your predicted expenses listed alongside projected income based on the number of jobs you think you can book to start, that becomes a yearly profit and loss statement. You can build backwards from this, by seeing what goes into a typical P&L sheet to create your own customized list of projected expenses for a lawn care business.
Lawn care businesses should have an overall margin of 50-55%. TurfBooks explains: “In lawn care we usually look for the material cost of about 15% and technician labor to be 15-20% other direct costs such as vehicle costs, workers comp, uniforms, etc. is usually 15-20%. Taking these direct costs together the most efficient companies have direct costs of 45-50% making their gross margins 50-55%. By knowing the actual costs of these items per hour this gross margin analysis allows us to back into our selling price per hour while targeting the gross margin percentage of these most efficient companies.” Once you’ve factored in the cost of supplies per job and bid out the total according to these metrics, you can make better projections for your yearly revenue and profit.