How BIG Should You GROW Your Lawn Care Business? | $100k VS $800k

Hey, everyone, it's Mike Andes. And today I'm going to be talking about how big should your lawn care or landscaping business be?

Well, the thing is, I really don't believe that everyone should grow a million dollar business. I don't think that everyone should be solo. I think that what you need to do is do what's right for you, for your family, for your lifestyle, and for what you want out of the business. One of my favorite sayings is that the business should serve you. You should not serve the business. So if your goals, your ambitions, your desires, your financial projections, the things that you need from the business are a certain threshold, there's no reason to grow bigger than that. Why would you want more liability, more employees, more. More headache, more loans, whatever, if you don't need that level of revenue to suffice? What you want out of the business? So I'm going to go over different stages. I have started now over 50 locations with Augusta Lawn Care, our franchisees. And so I see a pattern of some people, they're built to grow bigger and they have goals and ambitions to have multiple locations. One of our franchisees wants 20 locations. Like, that's a huge goal. But other people, hey, I just want to provide for my family and I don't really want to have a bunch of employees. And I like the work. So let's go over the different stages. The ones we're going to be breaking down today is should I be doing about 100,000 in annual revenue? Should I be doing $300,000 in annual revenue? Should I be doing $500,000 in annual revenue or 800,000 or more in annual revenue? You could probably do one at like 1.5 million, a bigger one. But I'm just going to focus on those four stages of growth. 103, 300, 500 and $800,000 in annual revenue. And where should you grow to if you're just getting started? If you're wanting to start your lawn care business, you might be asking, how big should I grow my lawn care business? These are the things you might want to keep in mind.

The first stage is when you grow your annual revenue up to $100,000. Now, the type of person that should do this is someone who really values autonomy, means you can pretty much do whatever you want. You sell the job, you complete the job, you invoice the client, you do everything, you answer the phone, you do everything in the business. Up to $100,000 in annual revenue is absolutely possible. If you're doing under $100,000 in annual revenue. In my opinion, you do not need an employee. You. You need to charge a premium price and just go charge what you're worth. You can easily do six figures by yourself without employees. And what's so beautiful about this stage of business is you probably enjoy the work. If you do enjoy the work of actually mowing lawns and trimming bushes and like, you get a lot of joy out of that. You love watching a renovation of a lawn as you fertilize it and work with it. You love pulling weeds. Just being out in the field like this is a great spot for you to be in. You don't need to grow bigger because if you do, you might actually resent the business and not like it because you want to actually be in the field working and not in an office or selling all day long, which is required as you grow. Another thing about being under $100,000 in annual revenue is no employees. You don't have the responsibility of trying to hire them, fire them, the liability, they make mistakes. You don't have to worry about setting up payroll. I'm saying paying payroll taxes and getting everything set up with the state and your local authorities. It's a lot easier in terms of liability and just headache because you don't have employees at this stage. So if that's something that you really resent, you don't like working with people, you've worked out in doing a 9 to 5 and just do not enjoy working with other people. And you just want to have full autonomy. This is a great stage for your business to stay at. Also, you have no boss. So if you've always been driven crazy by someone else telling you what to do or having a manager, this is a good spot for you to be in. Is under 100,000 in revenue the greatest. Another great thing about being under 100,000 in revenue is typically you're not gonna have any debt because you can get started for very cheap. You're gonna take your truck and maybe throw a few tools on there and slowly build up. You don't need a lot of equipment and trucks, et cetera. So really usually have no debt. Low overhead because you don't have employees or an office space. Typically you run this out of your own house. And so you can make really high profit margins on 100,000 revenue. You can easily do 60 to 70,000 of that being profit. So that's the type of characteristics that I see the most successful $100,000 or less annual revenue lawn care business be at. And those are the Type of things that a owner of that type of business is going to value.

The second stage of growth for a lawn care business is 300,000 dol in annual revenue. This is again a big step. You've literally tripled revenue. So just keep it in mind here. You've really tripled the size of your business, going from 100,000 to 300,000. That's a lot of growth at this stage. If you want to grow your business to this stage, you should really enjoy selling and doing estimates. You should enjoy the process of meeting customers, talking to them, going over work, change orders, upselling customers. If you really enjoy that, if you almost look at it as a game and you enjoy the process of selling, you should. You don't mind doing door hangers. You don't mind talking to your existing customers and trying to get them on an upsell to bush trimming. This would be a great spot for you to be at 300,000 in revenue. Cause you're really primarily focusing on sales. And you don't mind office work. If you don't mind office work and you kind of enjoy getting a polo shirt and having a little laptop here and having me, a workstation in your truck, if that's something that you really enjoy, this is a great stage. 300,000 in annual revenue. Typically you're probably gonna get up to about 40 to 50,000 per month in revenue during the peak season. And what's nice about this stage of business is you actually can usually take a day or two off here and there. Now you're fully in control of the sales, typically at this size of business. And so you can't like go away for weeks on end because then the work would run out. But typically at this size of business, you can take a Friday off and have a long weekend. You can take maybe a day or two off here and there and have a vacation and have a couple of the employees just take care of the recurring work, but not schedule any projects. You're not gonna really go away for months on end or weeks on end on vacation or doing some other business, because still are the primary person bringing the sales for the business. And so $300,000 is a great place though, if you're liking that sales office side of things. And you potentially, this is a great place for your spouse to start getting involved in the business if you want them to. And they want to actually help with the office side or potentially other parts of the business and be able to work as a team together in the business.

The third stage of growth for a lawn care business is the $500,000 in revenue marker. So half a million dollars. And I really talk about the fact that if you're going to go from 300 to 500,000, you want to go as quickly as possible. I don't see a lot of people making more profit at 500,000 versus 300,000. It's kind of a no man zone. There's a lot of dead space in there because there is a lot of overhead that's going to be required to grow from 300,000 with a couple trucks, couple employees, to 500,000 where your overhead percentage is going to be much greater. So if you're going to go to 500,000, here's why you should. It's really because you don't want to be in the field. All right? So if you don't like to get dirty, if you don't want to be working outside all the time, if 500,000 revenue, about 70 to 90% of your time will be spent outside of the field working on the business, hiring, training people, selling. But you still can do it if you like and enjoy the work. 10 to 20, 30% of your time could still be spent out in the field, but most of Your time at 500,000 in annual revenue is going to be spent on selling, hiring and training people. And so if you, if you're thinking about how big should I grow my lawn care business, you want to grow it to half a million. If you really enjoy creating jobs for your local community, if that's something that's really important to you, this is a great stage because now you're trying, you're going to be needing four or five, six, maybe even seven people during the peak season to hire. And so if you enjoy creating new jobs for the local community, and this is a great stage of business to be at, and if you really enjoy training other people, because as you are now hiring these multiple crews, you're going to be needing to train a lot of these new hires. Younger people, if you really enjoy that process of seeing someone grow and get new skills and you mentoring them as they get their career started, usually at this entry level position of being a landscaper, this would be a great spot for you. And what's cool about half a million dollars in annual revenue is you kind of start to feel like you own a real business. You have multiple crews, you have multiple jobs going on at the same time. People start to see your tr, so you have three or four or five trucks, they start to see you around town you start to really feel like you have a business and you're part of the community that has a brand reputation.

Now, the fourth and final stage that we're going to talk about today is when your business is doing $800,000 or more in annual revenue. So anything above 800,000, this is really where I see the business owner can become fully autonomous from the business. Now, if you step, you don't have to step out of the business. You don't have to, but the business has the financial wherewithal to get a general manager or an estimator that is going to be able to keep the sales function of the business going even if you're out of town. So this is where you can actually go on vacation for a couple weeks because you have someone else taking care of the sales. So this is where I look as full autonomy, where you are kind of like the spirit spare tire for the business. If you're around, great, but if you're not, the car's just fine. It'll still go down the street, sales will still come in, projects will still get depleted. And so at 800,000 or more in annual revenue, when you start looking at your business, if passive income is appealing to you, you're going to need to grow above 800,000 because you need to afford a general manager estimator to get those sales coming in all the time without your involvement. So this is where passive income can actually become a thing, is when you grow in the business to the point where you can actually delegate and hire out management and sales side of the business. This is also where if you start growing to above 800,000 revenue and your growth rate is less than 10% annually. So if you do 800,000 this year, you're not going to do like 1.5 next year. You're just going to do maybe 880, 850,000 next year when you've stabilized your growth above 800,000 in annual revenue. This is where you can have stable cash flows, predictable profit margins, because you're not, you're not growing so fast. They need more trucks and equipment and all the rest of it. You can have a stable cash flow. And that's when it becomes somewhat passive, is you don't have to be there. And it's much more stable. It's not up and down. And one month you buy a truck so like wipes out all your profit for the quarter. It's much, much more stable. And typically your team is much more mature by this time as well. So there's Less chaos in the business. You really want to grow to this point. If you really do look at your business as a tool, you don't really want to be in the business. You don't really have any passion for lawn care, but you want to create a machine to create money. $1 in, $2 out. That's like the whole reason you've gotten the business. Then this is the size you need to get to. And if you really enjoy working and investing back into people, this is also a great stage to be at, because at this stage, you are actually on the job sites. But what you're now your responsibility as a leader is to like, how do I get people within my organization to the next stage of their career? How do I improve their career and their livelihood and make sure that they have the skills necessary to make more money themselves and business skills. And maybe I teach other people how to do selling or I teach other people how to do in their own personal finance. I try to give them audio books or programs that are gonna help them. If that's appealing to you at this stage, it's a great time of business, a great size of business for you to get to, because you really need to have autonomy from daily operations to really be thinking about, how do I grow the business in a way that allows other people in the organization to grow up inside of the company or go to other companies based upon the information and the knowledge and the skills that they've got from my company? And that's a very, very rewarding part of business. When you've gotten to this size of companies, you're actually able to spend time on how do I develop the talent that's already in my company?

So I hope that was helpful. Based upon if you're just getting started or you're thinking about growing, there are certain highlights and lowlights of every single part and stage of growth. And I've talked about in the past, you know, why starting a business is not easy, why the struggles you're going to have at all of these different stages. But today I wanted to focus on when you're looking forward and you think about what size of business is going to make me most happy, that's what you got to be focused on. You know, you could die a millionaire or a billionaire that. But if you're not happy, it's all waste, it's all for naught. And so you've got to figure out what size of business is going to serve me the best. Because money and making money in a business can be a horrible taskmaster if you let it rule you. But if you get what you need from it, and the money that you need for your family to provide for your loved ones and for the future of your community, that's a very, very rewarding thing. And I truly believe if you know what sides of business you need to get those goals achieved, it will be much more satisfying when you reach that place, because you will be content. And in my mind, contentment and happiness is really what success is all about. I'm Mike Andes and we'll see you tomorrow. I'd like to invite you to Landscape Summit. It's the conference we have in January of 2022. Go to landscapebusinesscourse.com conference for more details. We talk about P4P efficiencies and how you can grow your lawn care and landscaping business. I look forward to seeing you there.