How Much Money Does It Takes to START a Lawn Care Business?!

Hey everyone, you're listening to the Landscape Business course. I'm Mike Andes and today we're talking about what your budget needs to look like and how much it costs to start a lawn care company. Now, I know there are so many variables that go into this and I get this question asked to me a lot of times, and I don't even really even answer a lot of times because there is so many variables. How fast you want to scale, what type of equipment you're going to use, what services you're going to offer, like it's enormous. But the other day I was having to create a chart for our franchise in terms of what's your starting costs, what they should look like. And so I figured I'd go over these and talk about the ranges of values that it costs to get a franchise going, which is the equivalent of getting your business started. So let's go ahead and jump into my computer for just a moment and I'm going to show you exactly what I'm talking about. Alright, so this is the investment info to start an Augusta Lawn Care franchise. And what you're going to notice is every single line item has a range of values in terms of high and low approximations of how much you're going to spend in each one of these line items. And the reason some of them are zero is because, for example, if someone comes in, they want to start a franchise and they have an existing business with a bunch of equipment, they're not going to need to spend any money on equipment. So that might be $0. Same thing if they travel, expenses for training might be $0 because they live within driving distance and then they just go home every evening when we have our three day training events on the weekend. So that is why there's a massive range of values here for a potential franchisee. So regardless of whether or not you're becoming a franchisee of Augusta Lawn Care, this is a good place to start in terms of what's your budget going to look like as you get your business started. Alright, so let's go through each one of these really quickly and kind of get an idea of what your budget should be when you're starting your business. All right, so the initial franchise fee, that's for franchisees of Augusta Lawn Care. You get a whole bunch of stuff with that website, all the systems, the software for P4P, et cetera, et cetera, et cetera. We set you up on service autopilot. All of that I talk a lot more about on our website. Just augustalongerservices.com franchise. So if that's actually of interest to you, go ahead and check that out. But I'm gonna go through this regardless of whether or not you become a franchisee. This will help you determine what your expenses might look like to get launched, get your business launched. All right, so travel expenses, that's the same thing. So for training for franchisees, we have three days where they come here, we take them to command center, we take them to both of our corporately owned locations. One that's just starting, one that's very established, they come to the studio, we do a bunch of training, we go take a bus and do estimates out in the field. That's what those travel expenses are for. Fixtures, furniture and decor. So this line item here, again, a lot of variability here. This is really going to have to do with really like it has here $0 you can get in the door because you don't really need furniture, fixtures or decor. But also if you're going to have a home office, if you're going to fix up your garage, these are things that you're probably going to, you know, need to get some chairs or other things in your office inside of your garage hooks, things like that to, you know, make it look good, get it set up correctly, shelving, things like that. All right, the next thing we're talking about is vehicle expense. Again, the reason that that is zero is if you're becoming a franchisee, you might already have vehicles. You're not going to need a penny extra and then up to $10,000 for that first truck. We don't. We recommend people spend less than $10,000 in their first truck. And we'll get into why in just a moment. But we're looking for secondhand vehicles that are usually 3/4 ton pickups, 4 wheel drive and $10,000 or less. The paint job does not need to be great because as you see down here for car signage, we leave money in that for painting the vehicle. And so if there's scratches or if it's a gross color, it's rusting a bit, it's totally fine. And we actually prefer those because we can get a better deal on the acquisition price.

Opening inventory and supplies. We have again, a range of $1,000 to $5,000. This is going to depend on things that you need in terms of we whacker line and fuel and all the little things that add up, you know, bins for grass clippings, straps, just a lot of little stuff. Again, usually you're gonna be on that lower side of $1,000. But if you're doing more project based work, you might need to get some materials in terms of different supplies that you would be using on hardscaping or project based work. Now this is the biggest one, and that's grand opening advertising. The biggest variable you can see here, zero to $20,000. This is going to be the determination of how much you want to grow. Bottom line, this is it, right? Like it's gonna have a lot to do with how you spend those marketing dollars in terms of whether or not you actually grow and whether or not those marketing dollars are actually effectual. But in general, I can take how much you're spending that first year in marketing and extrapolate how much you're going to make in revenue. And if you haven't watched my video about investing in your business and the importance of investing back into marketing and seeing how marketing investment directly correlates with growth of your business, definitely check out that video from a few weeks ago. It's very, very useful. It was actually a franchise training video that I made for the franchisees, but I shared it with everyone publicly because it's so important. And this is the line item that will determine how fast you grow your business. You can have all the equipment in the world, have insurance, have computers, like all the other stuff, you can have all of that. But what's going to determine the rate of growth, especially in your first year, is going to be how much you spend on grand opening advertising, how much are you willing to go out in the marketplace, do every door, direct mail, do next door ads, do Facebook ads, do Google Ads, do print, go knock on doors, do door hangers, flyers, go do booths at your local bank or credit union. Like all of these different things that you can do for marketing. How much you spend on that first year is going to determine what your revenue looks like in that first year and how much you continue to invest in your business. Every year is going to determine what your rate of growth for your business is. Next thing is business licenses and permits. This is going to have to do with your business license. You're going to have to get set up with your secretary of state. If you're setting up something like an LLC or an S Corp and you're going to want to talk to a CPA in terms of what's best for you. But usually you can do that online. 100, $200. And the permitting and the licensing part is not super expensive. You might need an applicator's license if you're going to be spraying or you're doing spraying trees and doing other applications, weed control, things like that, you might need to get an applicator's license. You might need bonding. Those are all things, 100, $200 here and there to get those things in your state. And it's going to depend on what, what registrations and licenses are required in your state. The next thing is the computer software and CRM. And again for franchisees, they might already have be set up with this. So that's why it's zero. But if you're just getting started, you're gonna need to spend some money on getting set up with your CRM. That might be jobber lawnpro. There is some people just use QuickBooks when they first get started. There is service Autopilot, there is LMN. There's just a whole variety of different CRMs. And this is not the training video for which one I think is best or which one is good for long term growth or anything like that. It's just that you're going to need to spend some money on it. And some of them have an initial fee, some of them have monthly fees. And the reason I actually put $1,000 in here because none of them have a monthly charge of $1,000. But some of them, you might spend three, four, five, six months worth of subscription before you're actually starting to see, you know, a substantial amount of money coming in. So we actually put quite a bit of money in there for the computer software and your CRM. And even though that might take a few months to actually use up that thousand dollars, insurance deposits and premiums, okay, so $200 to $1,000. This is going to depend really on what your expectation in terms of revenue is for the first year and whether or not you're hiring employees in that first year. When you go to an insurance broker, they're going to have different carriers that can give you quotes. I highly recommend going to a broker that has multiple carriers they can get quotes from. Instead of just going to one insurance provider and expecting or crossing your fingers and hoping that they give you a good rate, you want to go to a broker that has access to a bunch of carriers and can give you a really competitive price. And if you're just getting started, especially if you don't have employees, you should not be spending more than $50 per month, $60, maybe $100 per month in certain markets. If you're just getting a general liability and a general policy, and that's going to be needed. It's something you definitely want for your own protection, but, but also for marketing, to be able to set yourself apart from the competition, to tell your customers that you are insured if something does go wrong on their property, that you are covered and they're not going to be held liable. And so that 200 to $1,000 is going to cover that initial premium. And sometimes there'll be a percentage of the annual premium that the insurance provider will require you to pay up front, like 25%. And so your whole year might be $2,000 for your insurance, but they might require $500 of that spent upfront and paid to them in full. Now, equipment and supplies. Again, this is really using our model of trailerless setups. All right, so now if you need a trailer, like an enclosed trailer or an open air trailer, those are going to cost you more. Those are going to cost you a couple thousand. You know, for an open air trailer, at least 3,4000. Enclosed trailers can be 5,6000 dollars depending on your sizing. But in general, it's going to cost several thousand dollars. We use a trailerless setup, and especially when we're getting started out for new franchisees, and especially if you're in a market where you have neighborhoods and you have lot sizes that are usually 5,000, 6,000 square feet or less of turf. And so in those markets, it's ideal to get with a trailerless setup. If you don't have a trailer setup, you're going to need a trailer. You're going to need to invest a little bit more in the equipment and supplies. But with a trailer that's set up, you can for $1,000, get all of the racking on the back of the truck. Some people will spend a little bit more and they'll get a mass of a big ramp that goes into the back of their pickup. But that's all you really need. And then you get equipment. You got your couple edgers and weed eaters, blowers, a push mower which can be a 30 inch or a 21 inch. So really, for literally $5,000 or less, you can get started with all your equipment. And again, that's using a trailerless setup without having to get a massive zero turn. That is going to cost you six, seven, eight plus thousand dollars depending on the size of that zero turn. And so again, we're using this trailerless setup model. You'll need to add to this line item if you're going to get trailers or zero turns when you get started on your business. Now, this next line item we use, and I highly recommend, regardless of whether or not you become a franchisee, that you paint your truck or you get it wrapped. It's one of your best marketing pieces. And we put $1,500 to $2,000, 10, depending on your market. A lot of that is going to go towards painting the truck. So a lot of times we see painting a truck ranging anywhere from $600 to $1,200 on a very, very high end paint job or bigger truck on the 1200 side. And then we leave the remainder for the decals. So our franchisees, we give them the decal colors as well as the fonts and the logo. And then we show them the design that they can put up and they just give that to a printer and they're off to the races. We give them color swatches for the yellow that we use for our trucks, as well as a Mako code sheet that we give to them if they go to Mako, which is around a lot, and they are able to paint that truck exactly the same yellow that we suggest. And we give them the paint swatches as well. They don't have a Mako. So I highly recommend you paint. And you've heard me talk about paint versus decals and vinyl wraps in the past. Traditionally, a vinyl wrap over time will get nicked up and chipped or scratched and things like that, or it can tear, especially with heat and cold contracting and things like that. And so traditionally, we stick with painting our trucks because if we want to redo a paint job on a truck, it'll literally cost us 5, $600. Whereas if I want to rewrap an entire truck, I might be looking at 3, $4,000 on wrapping if I'm wrapping the entire surface of the vehicle. And so we like to stick with painting the. These are work trucks. They're getting dented, they're usually getting scratched. They're around equipment, they're around people, around rocks and debris and all sorts of things like that. And so we try to keep it really a work truck. And that is by painting it. And usually the cost, this line item, the $1,500 to $2,000, can be made up for in the fact that you can get a cheaper truck due to the fact that you don't need a perfect paint job and you don't mind if it has a couple scratches on it. Cause you're gonna get it painted and it's gonna look really, really good afterwards. And so all of our trucks, we always are spending under $10,000. And if most people looked at our fleet, they think it looks really, really good. But most of Those trucks are 4, 5, $6,000 to buy those or less. And we paint them and they all of a sudden look really, really good. And you can keep them looking good by just repainting them every four or five years. So with a good maintenance program in place, you can get these used vehicles much cheaper, paint them and keep them looking good for, for a long period of time. Professional fees. So this is going to be things like a lawyer or attorney or someone that is going to help you, give you advice to get started with your business. Again, we have the $0 there because if someone's joined the franchise, they already have an existing business. They don't need someone to help them set up an llc. They don't need someone to help them get their taxes set up. Like they kind of figure all that stuff out. But if you need a cpa, if you need a lawyer, these are things people, people you might need to have professional advice from as you get your business started. Now what I would suggest for the working capital is at least 3 to $7,000. And more importantly, it's going to be determined how big your business is. Because if you start off your business and like this scenario, this scenario that we're giving you here is someone starting with one truck by themselves. And for the franchisees, we're expecting them to grow and within a couple months get a second truck and start hiring and things like that. But, but this is starting, we're talking about getting started here. And so working capital, 3,000 to $7,000 is going to be determined on how fast you're expecting to grow. Because I want you to have three months worth of working capital, so three months worth of expenses. Now if you're going to start with an employee and a second truck and more insurance costs and you're going to get like a little storage facility instead of working on your garage, that three months worth of work working capital might be more like 8 or $10,000 if you're gonna start off bigger. But if you're getting started solo and your plan is to grow over the next year into few employees, like the franchise model that we use for people that are just starting out. And there's definitely franchisees that come in, they already are getting two or three trucks right off from the get go. But they're going to need some more working capital and they're going to spend more money on that grand opening advertising the line item. So Again, your budget for your first year is going to determine how fast you grow in that first year and then how you continue to invest your profits into the marketing is going to be determining of how fast you grow in your two, three, four years and beyond. And so I made that video that talks specifically about the marketing side, but I wanted to make this video today to give you some concrete advice and ranges in terms of what you should be expecting to spend. If you're getting a business started. And you can see if you're an Augusta lawn care franchisee, you're looking to spend between 20 and $80,000 approximately. And that's going to depend if you have an existing business and you have all the equipment set up and you already have an established clientele and you don't need a professional advisor and you don't need fixtures, furniture and decor, like those are things that you'd already have in place. And therefore your initial investment's much, much lower when. Whereas if you're just getting started, those are things you're going in the account for. And if you're wanting to grow much faster, you're going to need more working capital. Time and time again, I see that franchisees or lawn care business owners that are independents, one of the biggest reasons they do fail or get discouraged more in the first few years is that they're under capitalized. They don't have the money to go out and do marketing. They don't have the money to make sure they have that working capital for the three months and therefore they have to grow a lot slower. They don't have the money to be able to go out and make sure they get enough clients to have their second truck coming in the third or fourth month or even sooner. And so these are things that I think about capitalization. Having money is going to allow you to have that greater cushion on your working capital as well as go into the marketplace and spend more money on grand opening advertising. If you look at franchises across the board, a lot of times their grand opening advertising is in the range of 20 to $50,000. And that's because they want you to give a good jolt of advertising and marketing in your territory to get started off with a bang and not be slowly puttering and taking three years to get the place you could get in the first year if you had that capitalization. And so hopefully this gives you a good understanding of what it costs to not just become an Augusta long care franchisee, but more importantly to start your lawn care business. And we hope that by joining the franchise, you cut out a lot of the unforeseen costs and hidden traps that you would otherwise take years to figure out or spend a lot of money trying to figure out otherwise. So hopefully that helps you. And I hope that if you have any more questions about the franchise aspect that you do, book a call with me. AugustaLawCareServices.com franchise and you can see how P4P system and the, the documents, the estimate forms that we give you and the automations how those are going to lead to your success, not only getting started, but going down the road. And a lot of people would argue that starting the franchise costs a lot more to get started. And they would argue you don't need 21,000 or 25 or $30,000 to get started, that you can just do it independently. But the bottom line is you're going to save a lot of money by having all the systems done for you, a lot of the learning curve taken out the website created for you, having systems like P4P that takes years, years to figure out what those ratios need to be and how you can pay your employees to keep them and retain them. These are things that we've done with at the franchise and so I hope that kind of educates you a little bit more. And there's lots of more videos on the franchise on the website, so hopefully that was educational enough for you and comment below. If you're just getting started or you're wanting to get started in your lawn care business, what are some of the numbers, how much have you saved and what are you looking to do in total revenue in your first year? You've been listening to Mike Annie's on the Landscape Business course podcast podcast. Until next time, be great because nothing else pays.