How to Start & GROW a Lawn Care Business ($0-$1M Step-By-Step Guide!)

Hey everyone, it's Mike Andes here. Today I'm going to be talking about the four different stages of your business in terms of revenue and the things that you can expect to have as hurdles at each one of these stages. And really the things I wish I knew when I was starting my lawn care business. So whether you're at 100,000 or doing above a million dollars in revenue already each year, I really think each of these things will help you grow your lawn care business, your landscaping business, and get to the next level. So every single day I am talking to landscapers, franchisees at Augusta Lawn Care, and I see the exact same hurdles at certain stages and points in the business. The very first thing we do with our franchisees at Augusta Lawn Care when they come for training, is talk about these stages. We go a little more in depth. But today I want to give a higher level view of what are the hurdles you're going to face at each stage of your business. And what do I wish I knew if I was just getting started today? So the first thing that you've got to realize if you're trying to grow to $100,000 in revenue is that you simply have a job. And this is where I have a little bit of concern with the notion that building a hundred thousand dollar revenue business, that you are a business owner, this is not true. You own a job. You are the one doing the work, you are the one putting the labor in. And at the end of the day, that is perfectly okay. That is perfectly fine if that's your goal. But you do not own a business, you own a job. And for some people, they want to own a job simply because they don't want an employer and they don't want to have co workers, they want to work by themselves. And they, that's fine, that's great. But just realize you don't have a business, you don't have systems in place, you don't have people in place. And if you got hit by a bus, your business quote, unquote, would be over. So at this stage you've gotta realize this because I think a lot of times we get into this romanticized state that we own a business, we're an entrepreneur, and we're a business owner. And for some people, it becomes such a big thing in their mind. At the end of the day, when you're trying to, when you're under 100,000 revenue, you are simply working for, for a job, you're working 8, 10, 12 hours a day, working your brains out, perhaps out in the field, in the hot sun. But you simply have a job. All right? Until you can actually walk away from your business and still be making money, you do not own a business. You own a job. Also, I would be thinking about the other thing I would be telling myself if I was getting started today and I was trying to scale up past $100,000, is everything is gonna seem like a big deal. Alright? I still remember the day when I had my very first damage case. I broke a glass door of one of my customers. And I had known this customer from way back when I was young because I played baseball with their son and it was a million dollar house and I was weed whacking there and one of the little pebbles got shot up and broke this glass door. It ended up being from a thing called Peachtree, which had gone out of business years before. But this door ended up costing me $3,000. But even before I knew that it was going to cost me 3,000 dol, which again at the time was literally 10% of my annual revenue for my very first year. But when that happened, it was a big deal. I literally was sick for a day to my stomach. Just like, don't know how I'm gonna be able to pay for this. It was a horrible, horrible thing. Whereas now there's windows broken every single day across Augusta Lawn Care, even at the locations I own. And I don't even know about it. I might see it later on in a report or something like that, but I don't even know about it. It's a matter of the fact that as you're things are gonna seem like a really big deal when they're just not. And if I was to go start again with the perspective I have now, I just have to realize that when things come up, when an employee walks off the job site, when a customer's mad at me, when I get a bad one star review online that it's just not going to change the future outcome of my business. It's just not going to change the future of my success. An employee does not dictate what whether or not you're gonna become successful. If you have a drive and you have a goal and you have ambition, one employee, one rogue employee, one rogue customer going off the handle and being mad at you and questioning your integrity and all the rest of it, that's not gonna change the destination and the outcome of your future. So at the very beginning, when you're scaling up to $100,000, everything seems like a big deal. Which mower Am I gonna buy? It doesn't matter. And with the perspective now that I've grown million dollar companies and seen hundreds if not thousands of other land companies, the number one thing I see is like everything's a big deal at this stage. What mower I buy, what type of blades I use, what type of string line do I do, two cycle, what type of oil do I use? That does not matter. All those little tiny little details at the end of the day that seem such a big deal when you're small. You could literally flip a coin and just make a decision. And you'll be better off getting progress instead of perfection at this stage. Most definitely. Another thing that I wish that I knew at this stage when I'm trying to grow to $100,000 in revenue, assuming that I wanted to grow the business, is there's really only two things that matter at this stage of your business. That's top line revenue and close ratio. So top line revenue is literally what's my total sales for the year at this point, if I'm trying to grow my business, that's the only thing that matters. Along with close ratio, that is what percentage of the estimates that I proposals that I give are accepted. Those are the only two numbers you really need to be tracking at this stage in your business. I want to sell more. I want to sell, sell, sell. I think that's the only thing I should be thinking about. And number two, what percentages of my proposals or my estimates or my quotes that I give are accepted? Is that 20%, 30%, 40%. I want that a high number and that ties right directly into selling and top line revenue. I want to sell as much as possible. I want to grow past $100,000 in revenue. So those are the things that I'd be telling myself that I wish I knew. I didn't need to get wrapped up in all the little details of what type of mower I was going to buy if it wasn't a stand on. Should I get a 48 or a 52? Should I have a side bagger? Should I have different types of blades? What kind of trailer should it be? 7ft wide or 6ft wide? It does not matter. The only two things that really matter at this stage is top line revenue and close ratio. Again, we're assuming that we want to grow past 100,000. Now you know what? I want to pass the $300,000 marker, alright? So at this stage, to grow past $100,000 or $300,000, you're going to think about hiring and culture a lot. Because now you actually have multiple crews. And at this stage you're going to actually have do work where you're not actually on every single job site. You've got to actually trust your employees, get the job done right, talk to the customer, finish the job as was stated on the estimate. So when it comes to your hiring, your culture, the things I wish I knew is that you've got to hire fast in this kind of labor market. We've also fire fast. Get rid of the people that are driving you nuts. Get rid of the people that are just sapping your energy. Because right now this is the thing that most companies will stay at this stage, that $200,000 to $300,000 marker, they'll stop at this stage. Because the hardest part about this is hiring culture, building a team. This is when it really hurts. When people walk off the job, when they say mean things to you, when they just leave for another job for like $0.50 more per hour and you're just confused. Or potentially you can't afford at this stage to keep on the right people because you just don't have the money. You've grown, you're still trying to figure out your pricing, you're trying to figure a lot of things out. But hiring and culture is so important at this stage. Having team meetings, at this stage, very important. Having off site meetings, we actually share the numbers. You talk about these things with your team, the goals of the company, all very important. Important to create culture. Because if you're gonna start keep building on this pyramid, you need a solid foundation. And if you don't have your first three, four, five employees, really, really solid. It's extremely difficult to build the rest of your team as you begin to scale the business. If culture is not foundational in the business. Alright. Another thing is that I would be, I wish I knew if I was trying to grow past 300,000 is that more services does not equal more profit. All right. Services does not equal profit. This is at the stage when most people get sucked into. Well, I could do leaf cleanups. Oh, I could do patios. Oh, I could do pressure washing. Oh, I can do gutter cleaning. Oh, I can do bush trimming. Oh, I can also do retaining walls. Oh, I can do ponds. Oh, there's great money in excavation. Oh, there's great money in chipping up wood. Oh, I can do debris removal. Oh, I can do roll away debris. Oh, like literally you can add services out to wazoo, but adding more services will not lead to more profit. At this stage of your business, okay, we literally in the green industry have like 40 different businesses that some people will try to cram into their small business with three or four employees. They'll be doing everything from pressure washing to lawn mowing, to lawn treatments, to like there's so many different verticals of the green industry and all of a sudden they're doing all of them. You will never make money, you will never make profit if you're just being a jack of all trades, especially at the size of business. But this is the problem that most people fall into this stage. You know, I'm at 300,000, I get to a million. How am I going to do that? Well, I can just add more services. And guess what? You will be able to do that at this stage. You will grow tremendously by simply adding more services. But adding more services will not add to your profits in your long term landscaping business. This is the stage where, look, if you got to grow a little bit slower, but stick with their verticals of just mowing or just paver patios or just one part of your business, that's the niches is where you're going to make the money. They always say the riches are in the niches and it does not change when it comes to your lawn care and your landscaping business. And for most people growing past $300,000, including myself, we make the false assumption that just adding more services is going to make us more money. This is when I started adding things like artificial turf, delivering material. We got a tree chipper, we got big dump trucks. It was crazy. Alright, more services is not going to make you more profit. And in my opinion, if you're going to grow past 300,000, you also need to have P4P, if you follow me for a while. You know that stands for pay for performance. That's where employees get a percentage of the labor revenue instead of an hourly wage. And this is the thing that's going to set you up to grow past $300,000. Because if you look at most influencers on sales, social media, YouTubers, et cetera, they are right below this $300,000 level. Because this is a massive hurdle for most businesses as they begin to grow. And a lot of times people come up to this level and then they'll retreat back to this level simply due to the fact that it didn't figure out these very important things. They didn't figure out hiring culture, they didn't figure out niching down on a specific service. They didn't figure out pay for performance where their employees are actively trying to make more money and able to make more money because they're more efficient and because they're actively managing their own schedule instead of micromanagement from the owner. And all the confusion and the hate and the discouragement and the mistrust that is usually between an employer and employee can be eliminated by pushing, putting both everyone in the same direction. Pay for performance, you get more money. The more performance, the more you perform, the more money you make for the business. You can make more money. You can make 24, $25 an hour mowing lawns under P4P, if you're really, really good and you're really, really efficient. I'm able to give my employees more money if they're really efficient. And it should be that way. It shouldn't be where the guy working crazy really hard, kicking butt, making money for the business is making $1.50 more an hour than the guy sitting in the truck taking a snooze or on their phone all day long. So P4P is going to allow you to get the team, create the culture of efficiency that allow you to scale past $300,000. All right, $500,000. You're like, I wanna grow my business past $500,000. These are the things I wish I knew when I was at this stage of my business. The first thing I would say kind of already touched on a little bit, is speed through this phase, okay? Going from 300,000 and getting up past 500,000. Want to get past as fast as possible. A lot of times I will tell an owner to stay around this level, $300,000 for an extra year, and then speed through this when they have the capital to buy the trucks, hire up the people, do the advertising, and quickly get to past 500,000. The reason for that, and again, this leads to why a lot of people come up to 300,000, $400,000 and then retreat back to 200,000 or below is because there is no more profit. Typically between 300,000 a year and $500,000 a year. The reason for that is because you now step out of the field. You are starting to work on the business. So again, I should put this part here. You're starting to delegate. You're working out of the field. Delegate. You are out of the field. So out of field. So at this stage of business, you're delegating things. That's all fine and dandy, but now you're out of the field and you are not actually producing revenue. You're doing estimates, you're doing all the billing, you're answering the phone, you're doing email, you're doing all this craziness with the office work and sending out estimates and all the rest of it. You're out of the field. You are not producing about 70, 80, potentially $100,000 in revenue that you were back here. You are strictly overhead at this point. So because of that, you will not make any more profit profit in the business, even though your business literally almost doubles from $300,000 to $500,000. This is why a lot of people get past $300,000. They'll get to four and they'll literally u turn and come back is because you will not make any more profit. So what I recommend you do is get to $300,000, spend a year there, make some profit, stack some money aside, and then make sure you in one spring, you're like, okay, this is the year that we're going to grow. We're going to show our websites up, we're going to make sure we hire up, we're going to get a couple extra trucks and we're going to speed past 500,000. Because in between here, there is no more profit. I see it time and time again, and this is where people get very discouraged, and that's why a lot of people will retreat during that time. So during this time, you're delegating. This is extremely important at $500,000. If you're going to get past that, you've got to start delegating. Up until this point, you could just be kind of like an octopus. Like every single person in your business was another tentacle that you would basically just. Everything led back to you. They were all independently doing things and getting stuff done in the business, but it all led back to you. Whereas now, if you're actually wanting to grow past half a million dollars in revenue per year, you're going to have to delegate. You cannot be answering the phone, you cannot be answering your email, you cannot be formatting estimates or answering unhappy customers via email. You have to delegate these things. Equipment maintenance. You've got to get someone your credit to sharpen the blades, clean the equipment, wash the trucks, vacuum the trucks. I held onto this way too long. In my business, you've got to delegate all the little tasks. And what I recommend you do, take a piece of paper, like this pad of paper, and literally write down everything that you do in a day and just start asking yourself, who can I delegate that to? Oh, okay, I get the Truck started in the morning. Who can I delegate that to? Oh, I sharpen the blades in the morning. Okay, who can I sharpen that? Who can I delegate that to? Oh, I do payroll. Okay, who can I delegate that to? These are the things you must do if you're going to get past $500,000 in revenue. All right. If you want to go past a million dollars, seven figure business in the lawn care and landscaping industry, I think the biggest thing you've got to figure out as you're now trying to grow past this level is leverage. Okay, there's two forms of leverage, labor and capital. Up until this point, you've figured out, you've had to figure out, how do you leverage leverage, labor, that is other people's labor, to be able to scale the business? Some people say that's oh so horrible. No, if you're providing really good jobs and potentially their first step of their career, I think it's a really positive thing. You're able to leverage other people's labor to grow the business. As you pass a million dollars though, you've got to start transitioning into now, where you leverage capital, you start investing, whether it be investing in more trucks and equipment, whether it be buying investments in real estate or stock market stuff, trying to create leverage that is through capital instead of just labor. And this might be starting a second location, this might be growing the business, but all forms of leverage. And now you're using your money instead of your sweat. Okay, Instead of other people sweat and leveraging other people's labor, you're now leveraging capital. You're like, okay, I want to go start a second location. I'm going to need $100,000. What are you doing? You're taking your capital and accelerating your growth because of the leverage of that capital. Instead of deploying, oh, I've got to work 14 more hours a day to get a second location started, you're deploying capital as a form of leverage to get a second location started. So at this stage you gotta understand leverage. You figured out the labor side of leverage. Now you've gotta start figuring out the capital side of leverage. Alright? The next thing is, and this is really what's going to lead to wealth, right? So personal wealth in terms of if you start really growing, scaling the business, getting more locations, etc. The next thing that I wish I knew is you've got to have a general manager, you've got to pay this person good, you're going to have to give them a piece of the profits. You have to have profit sharing. And if a lot of people, they hate giving away control. If you're a micromanager, you've got to figure this stuff out. You've got to be able to delegate back here. But now a general manager is actually going to be be making strategic decisions in the business, spending money on your behalf, hiring people instead of you. This is extremely important to hand this off to a general manager. And I have a few general managers at different locations around the country. And they do everything, they're incredible. They do all the hiring, all the marketing, they make decisions in the business for buying stuff without even my approval. And that's fine, that's good, that's great. They're general managers. I'd recommend. If you're going to get past the a million, you're gonna have to find someone like this, someone you can lean on, someone you can depend on. I think the thing that you've really got to figure out in this part too is now you're a leader. You gotta figure out leadership. Okay? You've gotta really know that now you have multiple people, multiple crews. Underneath you have a general management. You're starting to build out a management position. That general manager is gonna allow you to go do a second location, they're gonna allow you to go do other things in terms of investments, they're going to allow you to step out of the day to day operations. And in my opinion, this is when you actually have a real business because you've leveraged capital and labor to make it a business that allows you to step away from the business. And you don't have to be a daily operations. You can go on vacation for a week and the business still continues, sales still happen, profits are still made, invoices are still made, checks are still cashed to the bank, payroll still goes through. At this stage, you've got to figure out how to be a leader though. You've got to be good at motivating people. And I think a big part of this when it comes to leadership is open book management. Open book management. So you can lead and you can manage people through micromanagement. So open book management though is a form of I open up the books, I allow my employees to see the numbers, I allow them to see the profits, see what we're charging the customer, see what the costs are on the job. The reason for this is because my, my goal as a leader is to empower the people that are working for me. They've really helped me, allowed me to get to where I'm at. And now my responsibility as a leader is to get them to where I'm at. That's my goal. Now, literally, I think about it so much. How can I take people that are just getting started? It's their first job, it's their first labor position. Maybe they're making 15, $20 an hour. How can I make it to where I lead by example. I lead through open book management so they can learn business, learn numbers, learn marketing, learn pricing, learn how to do estimates, learn everything within the business that I've learned. And potentially they get to start from down here and they get to start their own business or they get to go out and become a general manager at another location. They're able to go maybe work for a competitor, but getting them ahead in their career, and that's truly what I believe a leader should be doing, is thinking about how can I get other people that are working for me up to where I'm at? How can I give them the resources, the things I've learned, the struggles that I've had to go through, how can I get them to my position? And I think it's a big switch. Once you pass a million dollars, you can sometimes really be afraid of man. Here I am, I'm a big business owner. I'm making a bunch of money. I can go away on vacations, things still run, I have managers in place. And now you're almost afraid to hire somebody that is making 15, $20 an hour. The bottom line is you started in their same exact spot. Now I feel like what you can do to be a great leader is give them the steps that you've made and that you've worked through to get to where you're at. Give them an open channel, a pathway to getting to where you're at. Lead them through open book management. Open book management will let them see numbers and learn so much about the business that will set them up for their future in their career in business or if they go get another job or potentially inside of your organization. Moving up to becoming an estimator, general manager, someone in the office, these are all great positions for them. And you as a leader can do that as you've passed a million dollars in revenue. The last thing that you want to know at this size is price elasticity. Elack Ticity. A price elasticity I think is actually ice. He knows I'm spelling it all wrong, but you get the point. The reason this is so important at this point in your business. Price electricity, that is most customers will not drop you if you raise your prices. If you raise your prices by 10% and you're doing a million dollars in revenue, you literally will go from $1 million to $1.1 million. That extra hundred thousand dollars is straight profit. This is where price increases, this is where incremental changes your business make a massive difference. Getting to a million dollars is so great because if I make a 10% price increase because again, I realize that my customers are not as price sensitive as I might think, I'm not going to lose all my customers. They're not all going to get mad. They're all going to leave. Most customers, if you've been doing really good service as you've been growing your business, they will stay with you. They'll be price elastic, which means they will stretch with you. They'll allow the prices to go up a little bit. Like if the iPhone went from $800 to $900, guess what? We'd still all buy it. Why? Because we're price elastic. We are not price sensitive when it comes to that product. I think for most landscapers, they think that their customers are very price sensitive when they're not. If they build a really good relationship, have a great customer service, those customers are willing to stick with you even when you raise prices. That price elasticity at a million dollars in revenue, going from a million dollars to dollars 1 million 1.1 by simply raising your prices 10%, just added $100,000 in profit. To you as a business owner. That's the power of growing your business. That's the power of scaling up. And that's why I built this channel. And landscapebusinesscourse.com, lawncaremedia.com, lawncarewebdesign.com is to try to help you get through these stages. Whether you're trying to speed through the second and third one or you're just getting started. I truly believe that lawn care landscape is a great place to get get your career started in business, Learn, grow, and then help other people do the same thing underneath you and give them a clear leadership from a leadership standpoint, a clear channel and avenue to grow their career, learn new skills through open book management, pay for performance, becoming efficient, looking for waste. And they too can follow in your footsteps and maybe even surpass you one day. And for that I am extremely thankful for that. I literally wake up every single day to try to get other people to do that and surpass what I've even done. Hope that was helpful. I'm Mike Andes. We'll see you tomorrow.