10 REASONS WHY LAWN CARE BUSINESSES FAIL! (and how to avoid them)

A lot of people, like, don't look at the other landscapers, like driving. It's like, oh no, no. Oh yeah. There's something on the side of the road that is so immature in my mind. But you've made those decisions with your ego instead of the numbers.

According to Forbes, 80% of small businesses that get started today will fail within the first 18 months. Now the SBA, the Small Business Administration, paints a slightly better picture by saying that in the first one year, 20% of small businesses will fail. And that over the course of the first five years, less than half of small businesses will actually survive. Not just grow or make money, but actually just survive, just still be open after five years. So today I'm going to be talking about lawn care and landscaping. Specifically, I'm going to be talking about 10 different reasons why I feel like so many small business owners and more specifically lawn care and landscapers that fail within their first few years.

So number one is that they never have value high enough to charge premium prices. So if you want to charge premium prices, and in my mind that's $70 per hour or more to the customer, if you're going to charge those premium prices, you need to have a premium service. And that premium service starts with a premium brand, a premium website, premium customer service, customer service on the phone, a premium sales process to be able to answer the call, get the estimate, meet the client, all done in a very professional manner. Increases the perceived value. And that premium service allows for a premium price. And I really do believe that the best, most profitable landscaping businesses can charge $70 per hour or more to their customers.

The second reason why I see so many landscaping businesses fail is that they just simply don't get through the first two years of pain. Of pain and torture. The first two years of starting your longer business are extremely difficult. It's usually in the third year that I see business owners actually start to get some momentum, actually start to get some confidence and traction in their market. Some brand awareness leads start coming to them for a much lower cost, if not for free because of word of mouth. And usually within those two years, most people will either give up or, or get distracted with other possible money making ventures. They go into real estate, or I'm gonna start a restaurant, I'm gonna do this, I'm gonna do stocks, I'm gonna do crypto. Like they get distracted because in those first two years it is so difficult to actually get the business up and running.

The third thing that most lawn care businesses will fail is because they, they Struggle with the emotional rollercoaster caused by having employees so hiring and firing and people walking up the job and employees making mistakes or showing up late or giving a last minute, five minutes before they're supposed to show up. They call out sick right when you needed them the most. And the job was in crunch mode and the rain was pouring and you're already behind and you were late for an appointment for your family. That stuff happens. And that emotional roller coaster of oh, I've got the best employee to the next day, like someone leaving and then you have no one working for you and then you're struggling just to keep the jobs on the schedule and keeping your customers happy. That emotional roller coaster caused by having employees is a lot of times a thing that leads to failure in the lawn care industry.

The fourth reason is a lot of landscapers will take customer criticism and mistakes way too seriously. At the end of the day, look at the size of their property and zoom out like maybe 20, 30 mile radius and just see how small and miniscule and tiny that property is and realize that that is really the extent of the problem that you're facing. And it can become so blown up in our mind in proportion of just like this one job is going to tear us down, this one bad customer view is going to just ruin our business. And you've got to realize that the opportunities outside of that one tiny little property is just massive. And that no one person is going to take your business down. NO1 negative 1 star review or one job that just goes sour. You just can't get the budget hours like you're just way over time, you completely messed up on the estimate. One job is not going to take you down. And if you make a mistake, you break a sprinkler head, you run over a bush accidentally, you pop someone's tire accidentally. Like whatever it is, the customer criticism and mistakes that you make on a customer's property, don't take them too seriously. Are we trying to minimize them? Absolutely. Are we trying to make customers as happy as possible? Absolutely. But don't let one rotten apple ruin your entire day, week, year, or let alone actually make you close your business because you can't take it. And I understand it's hard. That gut wrenching feel when you get a one star review or when a customer complains is absolutely horrible. But don't let that keep you from growing a successful business.

The fifth reason why landscaping companies fail is because they grow too fast. I didn't say they grow too big, I said they grow too fast. And because they haven't scaled out in efficient manner, now they have a lot of holes and gaps. They don't have their admin or their accounting done correctly. They're not billing and invoicing. Now they have this massive accounts receivable. People owe them a bunch of money because they haven't been following up and collecting payment. They grow too fast and all of a sudden they have way too much equipment and too much debt. And they have employees that really don't know what they're doing. And so there's a lot of turnover. And all these things are caused by just growing way too fast. Now the sixth thing to balance that out that will lead people to failure is they don't grow big enough to avoid burnout. So I said, yes, you can grow too fast. Now that's about speed. The acceleration at which you grow can be too fast. And if your skill set is not able to really adapt to the size of your business that fast, you could lead to some really big problems. You can't hire enough people quick enough to fill in your gaps, you're going to have problems. But that being said, number six is they. A lot of landscapers don't grow big enough to avoid burnout. And now they're going 5, 10, 15, 20 years at the same small size and it's still physically, mentally and financially draining on them. And they never actually grow big enough and scale top line revenue large enough to where they can afford employees to take things off of their plate to allow them to go on a vacation, to allow them to attend a funeral or a wedding for a family member without absolutely losing control of the business. So you do need to grow, in my opinion, to some size enough to avoid burnout. And that might be in 10, 15, 20 years. I'm a big proponent of being solo, raising prices very high and having a great profit margin, but just realizing 20, 30 years you're not going to be able to push a lawnmower and you'll need to grow eventually to the point where you can hire and afford to hire other people to do the work itself.

Number seven is that a lot of landscapers add way too much debt to fuel the growth caused by expanding their service offering. So they keep offering all these different services. I'm doing excavation and I'm going to degrading, do paver patios and I'm going to do pools, yes, pools and water features. I'm going to do lighting and I'm going to do bush trimming and then I'm going to do tree service and they start adding all these services. And in order to get all these services, you got to keep adding equipment. Now I need a bucket truck. Now I need a dump truck. Now I need an excavator. Now I need a skid steer. Now I need a track loader. And they start getting all of this equipment. And it's all fueled by debt. And the reason they're getting all this debt is cause they're growing, they're growing and they'll keep buying into the equation. I gotta keep growing, I gotta keep growing. This is great. I'm getting more trucks and I'm getting more employees and I'm growing my business. But you're doing it in a way that's the least profitable and that is growing service offering. By adding more services and therefore needing more equipment, a lot of people will go into more and more debt to finance all those trucks and finance all that equipment. And that margin that's being made, the profit margin is much lower because you're adding services instead of just taking your core competencies, your three, four services that you're really good at, and just doubling down on those and making them extremely profitable as the business is growing.

Alright. The eighth reason why landscaping businesses will fail is they aren't willing to learn and grow with others. And that could be locally. Like a lot of people, like, don't look at the other landscapers. Like driving. It's like, oh no, no, no. Oh yeah, there's something on the side of the road and there's someone driving by. Like that is so immature in my mind. The ability to be able to connect with local landscapers, be able to help them and they help you, will really allow an owner to go through more stressful times and be able to lean on somebody else, whether that be online as well, like podcasts and books and Facebook groups that you can get help from when you are low, when you are discouraged, that's the time. You need that network of other people around you. And that should start with your local landscapers. The people around you go take them out for lunch, give them a job or two. If you focused on your core competencies, you can give work away for all the other services that you don't really want. That creates goodwill, that creates a network of people you can lean on and you could potentially help them grow their business as well. Number nine is the reason people don't succeed and they fail in the lawn care industry is they make business decisions with their ego instead of the numbers. They make decisions on what services they're going to offer, what type of truck they're going to buy, what equipment they're going to purchase, how many employees they're going to have, what shop space they're going to have, what their website looks like. And all those decisions are made through the prism of how is this going to make me look in front of other people? How is this going to make me look in front of other landscapers, in front of the Chamber of Commerce, in front of my family or my friends or my friends from school? And at the end of the day, when you start making business decisions around the prism of something that doesn't have to do with numbers, you're going to lead to failure because you're going to get into debt. You're going to get trucks and equipment that you don't need that's sitting all day long for four days out of the week and doing absolutely nothing, not making any money, because you simply bought into this dream of I'm going to look good and in front of other people by buying trucks, equipment, and other things that look flashy and look great. But you've made those decisions with your ego instead of the numbers.

The tenth and final reason why so many landscaping businesses fail is that the owner never reaches out for help when they're struggling. And I know what it's like to be struggling and financially not having a lot in the bank and kind of being at your wit's end and stressed out and just kind of worn out for a long year, and employee issues and customer issues. I understand that. But in that moment, you've got to dig deep and realize that that's the time you need help. You need to reach out and get help. I know it's hard. I know in the moment you feel ashamed or you feel like a failure, but you need to reach out and ask for help from other people. And that's why it's so important to create that network of other individuals that you can lean on either locally or through a franchise like Augusta Lawn or coming to our conference Landscape Summit in January. Like, you gotta come together so that when you are feeling like a failure, when you want to throw in the towel, when you want to give up, there's someone, someone to reach out to and ask for help. And that's not easy. That's a position of a lot of humility and just realizing and recognizing and admitting that you might have failed. And that's fine. But the objective here is don't give up. Those first two years are gonna be brutal. They're gonna be difficult. But years three and beyond is when you can start pulling the lever of profitability, raising your prices, getting your business to the point where you can actually make it a sustainable business that runs without you. I'm Mike Andes. I hope that was helpful. And if it was, check out landscapebusinesscourse.com, lawn caremedia.com and lawn careweb design.com to grow your lawn care business. Hey, everyone. I'd like to invite you to Landscape Summit. It's a conference I have in January. It's gonna be the 13th, 14th and 15th of January, 2022. It's here locally, and I'm really looking forward to meeting other land like yourself that want to grow their business.