Writing a Business Plan for your Landscaping Business

What goes through your mind when you think about writing a business plan?

Is it excitement? Anticipation? Anxiety?

All of the above?

The truth is, the thought of sitting down and writing a business plan can be overwhelming. If you’ve not had any formal business training and have always been a “wing it” kind of guy, the mind shift can be a tough one.  Planning, research and a strategic approach to your future may fly in the face of how you would prefer to operate. I get it!

You may have even seen other business owners jump right into it and have great success with little to no planning. Sometimes it works out for them. In the short term.

But the truth is, the odds are stacked against the careless entrepreneur. In a recent blog post we talked about the failure rate of new businesses. It’s no different in the green industry. There is plenty of money to be made here, but the blatant carelessness of the landscaping and lawn care business owner is almost a hallmark of the industry. It’s as though it’s a badge of honor.

“I can sell and I can produce a great product. The business will thrive just fine”.

The reality is a business plan can insulate you from future economic hardship, give you a plan for growth, and help you to truly know your place in your market. In the 10 Essential Business Plan Components, the writer asserts that a business plan is “key to helping you think through your business and keep you on track”.

And yes, there is a lot to a business plan. But it doesn’t need to be overly complicated. Let’s take a birds-eye view of what elements make up an effective business plan.

 

The Essential Elements of a Landscaping Business Plan

While we couldn’t possibly cover every element of a comprehensive business plan in a blog post, we can outline and introduce you to concepts you should be thinking about. While some may argue for or against the necessity of a business plan, there is one indisputable truth when it comes to writing one; you will be made aware of business elements you never even knew existed. Why is this important? If your goal is to build a business that sustains your lifestyle and perhaps even grows into a mini-empire, you’ll need this baseline of knowledge. Want to perhaps get out of the business in 10 years by selling to an employee, investor or competitor? A business plan can help you position yourself to be able to do so.

The Executive Summary

Often created at the end, the executive summary wraps up the business plan as a whole and communicates in 1-2 pages:

  • What services you will offer
  • Where you are located
  • What are you & your teams qualifications
  • What is your competitive advantage?
  • What is your path to profitability?

This summary will also outline various legal and financial elements of your business, such as the amount of start-up capital needed and what kind of legal entity will you establish yourself as.

If you have plans to seek financing from a family member, investor or bank, this portion will be supremely important to them.

The Management Team

While many landscaping companies begin as sole proprietorship’s, this is where you can make an honest assessment of your strengths and weaknesses and identify where you may need to fill the gaps (such as outsourcing administrative or accounting work).

While you perhaps don’t have other team members yet, this is where you can make plans for their future existence.

Things you or your team will need to consider:

  • Business strategy and execution
  • Customer Relations
  • HR management
  • Horticultural or Construction Skills
  • Design Abilities

 

Market Analysis

In a market analysis you’ll really assess 3 essential areas of concern:

  • The Industry
  • Your Potential Customers
  • Your Competitors

Knowing the competitive and financial state of the union will allow you to formulate a plan to reach your target audience. Once you know who your competitors are and what your customers are thinking, you can position yourself uniquely in that market to reach them.

 

The Business Strategy Overview

Beyond simply stating what your business strategy is, this section of  the business plan assesses the various forces at play that contribute to the success or failure of your business. Some of the questions you’ll address are:

  • What is your business strategy?
  • What are the key challenges your business will face?
  • How do you address these challenges in your plan?
  • What is your competitive advantage?

Your competitive advantage is where you’ll differentiate yourself from your competition. It’s the factor or factors that make you “better” than your competition. And it’s what you determine here that will define your marketing messages.

Marketing Strategy

Many landscaping businesses enter the market with a very minimal or no marketing strategy at all. Relying heavily on word of mouth (which will be effective, for a time), new business owners often fail to identify and manage a sales pipeline.

While there are a number of factors that go into developing a comprehensive marketing strategy for your landscaping or lawn care business, the 4 basic components are:

  • Product (what you offer)
  • Pricing (what you charge)
  • Place/Distribution (your target market)
  • Promotion (the active marketing)

Cash Flow Statement

This section is not optional. It’s perhaps one of the most critical elements to your business plan. This helps reveal what your needs are now, and will be in the future. You’ll also gain some insights into how cash flow impacts future growth plans.

While your business may look like a landscaping rock star on paper, the truth is that if you don’t have sufficient cash in the bank on any given week to pay your bills or your employees, you will be in serious trouble.

Most landscaping businesses that do not succeed, do so because they run out of money. With your cash flow statement and your business plan, you can make accommodations for things like late accounts, non-paying customers and other client problems.

Revenue Projections

Admittedly, this is a tough one. For start-ups, projecting financial growth is challenging due to the lack of any kind of operating history. You have little to no hard data to base your assumptions on. When creating your forecast, either for yourself or an investor, you’ll want to create projections:

  • For the first 12 Months
  • every quarter after that for 2 years

While everyone knows the numbers created at this stage of the plan will evolve and be very much in flux, you’re undertaking the important exercise of determining what realistic growth looks like, where you need to be driving sales, and what your cost/overhead growth might look like.

Further, with some tweaking and the addition of a break-even analysis (the point where your money coming in covers all of your overhead), you will have a plan that allows you to confidently determine each business step for the coming 2-3 years. You will be able to ask “does this help meet or distract from the financial goals I’ve set in place?”.

So, What’s Your Plan?

The most successful entrepreneurs are driven, determined and detail oriented. In addition, they know what they are good at, and they know what they are bad at.

Are you great at sales, but weak on administrative details like paperwork and planning?

Can you whip out a beautiful landscape proposal in 3 hours, but aren’t sure whether it will be a profitable project or not? Hey, that’s OK.

Wise business owners identify their strengths and weaknesses and then accommodate for them in one of several ways; they become intense learners, they surround themselves with people that have the strengths they lack, and they plan.

Having a weakness or a deficit is not really a problem. Not admitting it and developing a strategy for that weakness is a problem. You’ll have a hard time scaling your business to grow and becoming as profitable as possible if you are determined to “do it all on my own”.

There will not be someone at a finish line handing out awards for those of you who never asked for help. Running a business has enough headaches as it is – don’t add to them unnecessarily.

 

 

 

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