How much money does a lawn care company make?
This full time owner with a part time employee generated over $100,000 in revenue and $70,000 in profit working 54 hours per week for 32 weeks over the summer. AND he graduated from a top 15 business school in the middle of his busiest month. Impressive!
Andrew Huber, Nick’s brother, came on the show to do a 2019 season recap and go over the profit and loss statement for his lawn care company. He is 24 years old.
The Lawn Squad is a lawn care, landscaping and weed control company based in Bloomington Indiana. 2017 was the first year in operation but Andrew was a full time student at Indiana University so he didn’t really get serious until the 2018 season. In May of 2019 Andrew graduated from college and stepped into the business full time.
2017 and 2018 performance and financials
In 2017 Andrew ended the year with 16 recurring monthly lawn clients and generated $11,638 and $4,629 in expenses for a profit of $7,009 as a full time student. He estimates his 2017 total commitment at 165 hours. Thats $42 in profit for each hour committed to the business.
In 2018 the company generated $39,253 in revenue and $6,310 in expenses for $32,942 in profit and ended the season with 30 recurring customers. He estimates his total 2018 commitment at 800 hours. Thats $41 in profit for each hour committed to the business.
Andrew took a lot of credit hours while working on his MBA at Indiana in 2017 and 2018 so he did not follow leads or answer customer inquiries diligently. Each year in mid-May when he would get overloaded with work he would basically stop answering the phones.
Initial Investment
Early in the business’s life Andrew used his personal vehicle to haul equipment and leased the family lawn mower to handle his jobs.
He put the majority of the profits back into the business in both 2017 and 2018 and grew slowly while purchasing used equipment. He used this guide to purchase his truck.
Equipment overview:
- 2009 Ford F-150 – 7/1/18 – 95,000 miles – $8,000 + $3,000 transmission in July 2019 – $11,000 total
- 36″ 2016 Gravely Pro-Stance Mower – $5,000
- 60″ 2016 Gravely Pro-Turn 260 – $8,000
- 12′ open trailer – $2,000
- Toro Self Propelled Residential mower – $250
- Used 100 Gallon Dual Tank Sprayer – $400 + $100 in repairs
- Stihl Weed Eaters, Blowers, Misc – $1,000
Total Investment – $27,750
2019 Overview
2019 got off to a blazing start as Andrew got more serious about following leads and building up a larger customer base. He also hired an employee to run the truck one day a week and take some work hours off of Andrew’s plate.
Jobber, the customer management and invoicing software, was a game changer for The Lawn Squad. His quote request page is professional and easy for customers to fill out. When they do he gets an instant notification and is able to turn around estimates in minutes from his smartphone.
Scheduling is another game changer on Jobber that has saved Andrew a ton of time. It allows him to optimize the route based on the job locations and his employee is able to run down the list and mark as complete and send invoices.
In April 2019 Andrew got his weed control and fertilization applicator’s permit. He took an online course (10 hours), studied for another 5 hours and then traveled for a day of in person courses, exams. This was a big step for him because weed control is extremely profitable for him.
Also in spring of 2019 he upgraded his WordPress website and implemented a lot of other tools on this list.
In 2017 and 2018 when he was a student he wasn’t able to answer all of the calls and didn’t have an easy way to send quotes. This year he answered his phone more often and chased leads a little harder (still not as hard as he could have) and booked way more jobs.
He estimates that he sent out 40% of his quotes within 1 hour and 36% of the 320 quotes were accepted by the customers. The part time employee worked 530 hours (22 hours per week from May-Oct) at $13.50/hr. Andrew’s liability after workers compensation and Payroll taxes was $17/hr. Remember there are a lot of additional costs of running payroll that should be considered.
2019 customer numbers and financials
Andrew ended 2019 with 55 lawn care clients and 20 weed control and fertilization clients in Bloomington for a total of 75 customers.
He had 320 job quotes sent out and 36% accepted his proposals. Hours worked 1,940 hours over 32 weeks for 54 hours per week (5 admin, 2 quoting, 47 on the truck). Now lets look at the numbers:
Total Revenue: $106,200
Expenses:
- Labor: $9,000 / 28% of total expenses
- Landscaping supplies: $5,980 / 18%
- Repairs / Maintenance: $4,250 / 13%
- Weed Control Supplies: $3,860 / 12%
- Fuel: $2,990 / 9%
- Wear and Tear / Depreciation: $2,100 / 6%
- Jobber Software: $1,548 / 5%
- Insurance (WC, GL, Auto): $1,200 / 4%
- Equipment Rentals: $600 / 2%
- Dumping (leaves, brush): $377 / 1%
- Clothing: $450 / 1%
Total expenses: $32,355
Total Profit: $73,645
Hours worked by owner: 1,940 (54/wk for 32 weeks)
Profit per hour worked: $37.96
What if he had taken himself out of the business?
I often like to run the numbers as if the owner of the business hired an employee to take over his or her own personal responsibility. This is a good measure of the overall potential and health of the business because it simulates the business if the owner had stepped back to work on the business instead of in the business.
If Andrew hired a competent crew leader for $16/hr the total payroll liability after workers compensation and payroll taxes would be about $20/hr.
Assuming the employee is 20% slower than andrew at doing the work the total hours worked by that employee would have been 2,328 (1,940 x 1.2). Multiply that by the $20 / hr liability and the expense would have been $46,560.
If you add that expense to the profit and loss statement that turns Andrew’s profit goes from $73,645 to $27,085.
Keep in mind this is just a rough estimate. There are additional expenses that come along with hiring employees and growing. Right now Andrew doesn’t have a legitimate garage to store his equipment and service them. He doesn’t have an office. Those will add slightly to the overall overhead as he grows.
There are also tremendous advantages of Andrew getting off the truck and working on bringing in new customers or growing the business.
Here are some key questions Andrew needs to answer this off season while planning for next year:
What additional revenue could he have brought in if he weren’t on the truck for 50 hours a week?
Should he raise his prices or are they high enough for him to hire employees and scale up the operation?
What about landscaping and other high margin, higher skilled work? Should he treat the lawn care as a base and focus on spending his time on weed control and landscaping?
Strategy and Marketing
From day 1 Andrew has gotten the majority of this customers from his Google My Business location in Bloomington. See all of the tools he used in the early days here.
Andrew got a few early clients to leave him 5 star reviews and that has helped him rank. Bloomington has a population of less than 100,000 so it wasn’t extremely competitive.
He has never done paid advertising of any kind. The GMB location has brought him 90% of his customers and referrals and word of mouth have brought 10%.
Sales and marketing have been his weakest link since day 1 but he has never needed to do those things to grow his business.
His biggest advantage is that he turns quotes around quickly using Jobber and can look at Google Maps and measure the property so he doesn’t have to drive around looking at places to quote them. He has found that every hour he lets pass before sending a quote the odds decrease drastically of securing the job.
Plans for 2020
FIRE THE BAD CUSTOMERS. 20% of Andrew’s customers cause him almost all of his headaches. They complain, email him, and request weeks off when the lawn needs mowed but isn’t overgrown. He is starting to learn that not every customer is for him. Nick agrees wholeheartedly.
He mentioned that he needs to hire an employee or several employees. This is the largest stress for him at this time and he’s not sure how he is going to approach the hiring and training. Nick recommended checking out The Hiring Series here on the blog.
He needs to purchase another truck and trailer so he plans to shop in the 5-10 year old range and try to get a reliable truck under $10,000.
Marketing, sales and SEO will take a priority spot because right now he is reliant on his Google My Business location too much. He plans to do some customer appreciation by sending thank you notes out to his clients before Christmas.
Andrew plans to do some studying and has already started on this booklist.
The highest margin and most profitable work has been the weed control and fertilization clients. Andrew wants to nurture and develop that side of the business because its easier to train and quicker work.
Overall Andrew knows he has done the easy part in building a great living salary for himself through the business. The hard part is hiring employees and building a business that isn’t relying on him for 50+ hours a week of his labor.
Huge thank you to Andrew for coming on the show and congratulations on the great work so far! We’ll catch back up with him in 2020 after a blowout year!