Why Do Landscaping Businesses Fail?

08/03/2022 - News

There are all kinds of reasons why a landscaping business might not succeed. Some are financial, some are health related and some are a matter of work life balance.

Neville Stein and Angela Lambert delve deeper into why landscaping businesses fail and offer advice on futureproofing your own business.

Does Your Landscaping Business Make You Money?

Or, Why do some landscaping businesses fail to make a profit?

According to Horticultural Business Consultant Neville Stein, the main reason that some landscaping businesses fail to make a profit is that they Do Not fully understand what their costs are. As a result, therefore, they don’t charge their customers enough to be able to make a profit.

Unless you are lucky enough to attract clients with infinite budgets, there is a very fine line between actually winning work and losing a job because your quote is too high. But when you know your costs really well, it’s easy to find that sweet spot.

In this industry, when clients can’t always differentiate between reputable landscapers and rogue traders, it’s easy to be a busy fool. Try not to fall into the trap of quoting too low. Build a reputation for good work and believe in your worth. ‘Screen’ your clients before investing time in site visits and the quoting process. If they can’t afford you, there’ll be someone else who will value your worth. It is perfectly possible to run a profitable business if you choose your projects carefully.

Understanding Your Costs

For each project you need to pay close attention to:

Materials costs.
Labour costs.
Overheads

At the end of the project, it’s worth taking a couple of hours to compare what you actually spent with what you’d allowed for in the quote.

Did the buying cost of materials rise between the time you quoted and the time that you ordered? What could you do to avoid that happening again? Tip: Ensure that your contract is worded so that price rises can be passed on the the client.

What was wastage like on site? Could you have ordered in half a dozen fewer slabs? Were there any breakages or machinery failures that cost you dear? Would a bit of extra training help your team to work more efficiently?

How about labour costs? Have you actually worked out how much your labour costs per hour or per day? There’s more to it than their pay packet. There’s national insurance, income tax, sick pay, holiday pay, paid breaks, travelling time and all of the other wonderful things that you miss when you become self employed.

How good are you at estimating the number of man hours that will be needed on site? If a project runs over by a couple of days, is there enough margin in your quote to absorb the cost?

What if the client requests changes part way through a project? Do you re-quote or do you carry the cost yourself?

And then there are the dreaded overheads. Costs to the business that are easily missed off when you price a job. Vehicle running costs, machinery costs, phones and internet, accounting services, interest on loans, tax, admin costs…they all eat into your profits and they need to be included in your hourly rate.

Invest In A Business Coach

Most landscapers are incredibly talented people who are really skilled at building gardens, but perhaps not so interested in numbers. If you find managing the financial side of your business a challenge, it’s well worth investing in the services of somebody like Neville Stein. Neville will help you break down the costs, decide if you can make savings anywhere, and work out what you need to be charging as an hourly rate in order for your business to turn a healthy profit.

Does Your Landscaping Business Make You Happy?

There’s more than one way to measure success. Financial success of course is easy to quantify. But what about all of the other reasons you chose to run a landscaping business? Are you achieving all of your goals?

Great work-life balance?
Good health - physical and mental?
Rewarding projects that make you proud?
Pleasant customers?
Terrific work mates?

Running a business - any business - has it’s ups and downs. But as Richard Bickler can testify, when there are more downs than ups, financial success becomes less relevant.

Great profits don’t help when your back is so damaged that every slab you lift means physical pain. Neither is money much of a compensation if your team is difficult to work with.

Your landscaping business can be buoyant and busy, bringing in a healthy profit and have a great reputation. But if you’re not loving what you’re doing, is that business a success?

In short, some landscaping businesses fail simply because their owners fall out of love with them.

What can you do to protect yourself?

Having a great support network has to be high on the list of priorities. Surround yourself with people who can help you with the aspects of business that you don’t enjoy.

Hate doing the books? Find a freelance bookkeeper who can create a weekly or monthly report so that you can see how things are going financially.

Don’t enjoy pricing materials? Use tools like “My Bill Of Quantities” on the Arbour Landscape Solutions website and spend time with the family instead of trawling the internet for prices.

Hate marketing and promotion? You’d be surprised how cost effective it is to ask a freelance marketer to help you out.

Recognise the signs of stress and depression and seek help as soon as they rear their ugly heads. The charity Perennial offers a range of services to help manage your mental health and they’re very discreet.

Make sure you take time out from work. It’s crucial that you recharge your batteries from time to time. Working 6 days a week, 52 weeks a year is just not sustainable. If you’re working so hard because finances are an issue, talk to Neville Stein, and make sure you are charging properly for your time. That way you CAN have a holiday and you don’t need to work every weekend.

Go along to APL cluster groups, visit trade shows and join social media groups so that you can learn from other people’s experiences. We’re very lucky in that people who work in the landscape industry are generally very supportive. If you’re not sure how to tackle a situation, you can reach out to your support network for advice…..9 times out of 10 someone else has survived a similar situation and will be able to give you some pointers.

Train your employees. Investing in training will build a stronger, more cohesive team. One that you feel confident to leave on site while you are building quotes and running the business. That way your business needn’t eat into family time too much. Happy family = happy you!