A short YouTube segment in which Mike Andes answers a question about the expected revenue return from a $65,000 marketing budget for a landscaping-focused business. He advocates for aiming for a 10–20x return on marketing spend (20x for landscape installation work because it lacks recurring revenue), estimates $65,000 should generate roughly $1.2–1.3 million gross revenue for installation-focused work, and contrasts that with maintenance-focused businesses (roughly $600–700k from the same spend). He also gives an example of a franchisee spending $10,000 and earning about $250,000 (25x) when focused on mowing/maintenance.
Questions this video answers
10–20x (Augusta’s standard)
About 20x (higher end of the range because install work lacks recurring revenue)
Approximately $1.2–$1.3 million in gross revenue
About $600,000–$700,000
They can do about $250,000 in revenue (25x), mostly from mowing/maintenance)
Chapters
Hey, Mike. Working on next year's marketing budget, we were looking at investing $65,000 next year and was wondering approximately how much revenue that would bring in specializing in mostly landscape install work. Alright, so I'm always looking for a 10 to 20 times multiple on my marketing dollars, at least. Now for landscaping, I'm looking for more like 20x simply due to the fact that revenue, you have materials and all the rest of it incorporated in there, as well as the fact that you're not going to get recurring revenue from, from a landscaping job unless you like upsell them on maintenance. But when it comes to landscape install work, you're not gonna get that recurring revenue. So you need to have it at 20 times what you spend in marketing. So if you spent $65,000 in marketing, I would expect that to pull in at least 1.2, 1.3 million in terms of gross revenue from landscaping. All right, that's a lot of money. You, you gotta make sure you spend that wisely. You don't wanna do it all in one month or like do it, you know, just don't spend 20 grand on a print one print marketing campaign. Like, you gotta be smart about this. And when I usually use that 10 to 20x multiple, I'm talking about like advertising that works. I've seen people, they spend $5 on advertising and they make $5 in revenue. It's not a good marketing campaign. You should ditch it, you should abandon it. You should figure it out. You should educate yourself. When I say 10 to 20x, that's what we use at Augusta as our standard. And so if I spend 10,000 in marketing, I expect 100 to 200,000 in the next 12 months. But for us, a lot of that's going to be maintenance. So then the year after that we can build on it. So if you're doing strictly mowing, you might be more like 12, 13 times. But if you're doing landscaping, you need to be up 18, 19, 20 times what you're spending in marketing because otherwise you're just not going to be able to. You don't have any recurring revenue. Right. You don't get that any benefit from selling someone today after the job. So it's definitely something you want to have a higher multiple on when it comes to revenue. But again, how much revenue should you bring in? I think you should bring at least 1.2 from using 65,000 in gross or in marketing. And that's because you're focusing on landscaping. All right, if you were just focusing on mostly maintenance, that number might be 600, $700,000. All right. And you don't have to spend that much, by the way, too. We have some of the franchisees that literally spent $10,000, and they'll do 250,000 in revenue this year. Right. So that's 25x. And they're mostly doing mowing. So it's not like that's the standard. I'm just saying 10 to 20x is what we want to be inside of. And it's going to range usually towards the lower end of that spectrum if you're doing maintenance. Higher end of that spectrum if you're doing. If you're doing install. But with maintenance, you get the recurring aspect where next year you get that same revenue without the cost of acquisition.
