Service Business Plans

Lawn care business is probably one of those businesses which is considered fairly recession proof. Even in recessionary times like now, when the tendency of most people is to reduce non essential expenditures like lawn care services, there are still those who are unable to maintain their yard or are rich enough to pay that will continue to engage such services. With record numbers of foreclosures, banks will probably be one of the newest and biggest client for most of the lawn care businesses alongside golf courses. Further to that, once the recession is over, the recurring nature of this type of business still presents an attractive incentive for new entrants.

As in all types of business, a lawn care business plan is equally crucial as it serves as a road map to guide the owner in managing the business. It captures the goals that needs to be achieved, the required resources and the means of obtaining the said resources. A good lawn care business plan should include information on marketing, legal issues, accounting, insurance and even taxation. Some comprehensive ones will also include expansion plans that spans a few years as well.

The preparation of the lawn care business plan would have been borne out of the market research carried out by the budding entrepreneur. The viability of the business would have been ascertained beforehand or else the venture will surely fail even with a well thought out business plan. If the targeted location is full of high rise buildings, and there are already established lawn care businesses, getting into the market is going to be difficult as it is already overcrowded in a small market. Potential income and costs (both initial setup and recurring) should be budgeted. Expansion plans in terms of new markets and clients, additional equipment, manpower needs would need to be addressed as well. After all, at the end of the day, as the owner, you wouldn’t want to be mowing lawns for the rest of your life.

Assuming that all things have been taken into consideration, the first item on the business plan will be the source of funds required to setup and run the venture. After paying for the setup cost, there should be enough funds left to foot the monthly bill of running the business for at least 6-8 months. Most new businesses will not be turning a profit in the first few months of operation so a certain amount of cash is required to cover expenses like paying suppliers, rental, etc. Sources could vary from own savings to loans from family or even from banks in which case the lawn care business plan will have to present a strong case to convince the bank that the company is viable and profitable.

Once the funds have been secured, it’s time to shop around for the equipment that is essential for bringing in the revenue. Following from the market research and the identification of the target market, the type of services required by this market segment would determine the type of equipment that is needed. For a start, instead of buying new equipment (which forms the bulk of the start-up cost), procuring used equipment or even leasing them could reduce the initial financial outlay significantly.

Next on the list which most people miss out when making a lawn care business plan is insurance. This is more crucial than is generally perceived. Why, you may ask ? Consider that lawn care prices ranges anywhere between $35-$75 depending on the size of the property, the profit margin after cost could be razor thin. In the course of maintaining the lawn, if there’s any accidental damage to the property, the company might be liable for the repair cost. This could result in heavy losses for the business if there isn’t any insurance coverage to control the sometimes spiraling cost of repair.

Once a suitable insurance policy has been decided upon, naturally, the planning process will lead to drawing up lawn care contracts. Just as insurance helps defray the cost of repair, the lawn care contracts sets out the terms and conditions by which the business can protect itself in cases of disputes and in the worse case scenario lawsuits by disgruntled customers. A good place to start would be to find out what are the standard clauses pertaining to the lawn care industry by checking with any governing body or even “borrowing” from the competitors’ lawn care contracts. It is a must to engage the services of legal experts to make sure that all bases are adequately covered and the company is not open to potentially damaging legal disputes. Additionally, depending on local laws, licensing might be required to carry out lawn care businesses.

With all administrative stuff out of the way, it’s time to look into lawn care prices that should be charged for the business to remain profitable. If the market research had been carried out correctly, this will be fairly easy to determine. Knowledge of the competitors’ pricing will give an indication of what the market is paying and for what type of services. Charging a lower price than the competition is an easy path towards getting a market share but it is not sustainable as the competitors can wise-up and do the same which will be detrimental to everyone in the long run. Instead, look at what is lacking in the existing services available in the market and provide that which has demand but is not met by the existing players in the market. The idea is to be a niche player first, start small and move up the ladder from there as the business expands.

Finally, the last piece of the puzzle to complete the lawn care business plan would have to be how to find the customers and convince them to use your company. In other words, the marketing plan. Recall the market segment that will be targeted and identify the best way to get in touch with them. If it’s a certain locality, perhaps door-to-door or mailers in individual mailboxes could be effective. Or if it’s a particular industry, then advertisements in certain trade magazines might be a more appropriate option.

And with that, the lawn care business plan is complete. Use it as a road map and continue to track the progress of the business’ growth with it. Review it periodically and tweak it if necessary when market conditions changes or new opportunities arises. The business environment is always in a state of flux so keeping in the know is crucial to the survival or demise of the company.

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Author: A. Ng

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