Landscaping businesses run the gamut from one person lawn care services to huge companies with dozens of locations. As long as people and businesses have lawns, there will always be work, yet many landscapers fail in the first year, often due to haphazard and unsustainable growth. A written business plan can help you avoid this trap by delineating a clear road map for organized growth. In addition, if you plan to seek outside funding, your business plan is essential to convincing investors or lenders to take a chance on your company.
What Is a Business Plan?
Your business plan provides a clear look at your landscaping business as it currently exists, alongside a detailed plan for the next three to five years of growth. It outlines your goals, identifies potential challenges, and lays out solid strategies for overcoming those challenges and reaching your goals. It is a living document that you should frequently update as your landscaping business evolves.
Although it is the introduction to your business plan, the executive summary is generally written last. Financiers use the first page to decide whether to read the rest of the plan, so get right to your strongest points. Briefly describe your landscaping company, provide a market analysis summary that proves the need for a new landscaping business, and sum up your company’s unique qualifications to meet that need.
In the company analysis, describe your landscaping business as it currently exists. Mention its founding, legal structure, and current stage of business. Describe past goals that you have already met, such as lining up important commercial clients or partnering with an equipment provider for a volume discount. Then elaborate on the unique qualifications you touched on in the executive summary. Perhaps you are a locally known landscaper going out on your own with an existing client base, or you have a background in artistic design.
The industry analysis can be challenging, because landscaping companies come in all shapes and sizes. Yet you only need to worry about your relative market, or the portion of the landscaping industry into which your company falls. Is yours a one person lawn care service with some design ability? Do you focus on commercial clients? Do you perform high end designs in gated communities? Figure out your niche, and research trends and future projections for your segment of the industry. Develop a solid plan for overcoming any hurdles you discover.
Who will purchase your landscaping services? Are you targeting wealthy homeowners, middle-class families, or corporate clients? Do you want to create individual custom designs or work off a few basic plans? How do your customers make purchasing decisions? Narrow down your customer demographics as precisely as possible. Then determine their unique needs and craft a plan for meeting those needs.
Your direct competition is not every lawn service in town. Those that target a different market, or fulfill a different need for your market, are known as indirect competitors. Your direct competitors are landscaping companies that provide the same service for the same market as yours. Discuss each direct competitor individually with an emphasis on the factors that set your landscaping company apart. Talk about your indirect competitors as a whole, rather than as individuals.
A good marketing plan is based on the four P’s: Product, Place, Price, and Promotion. Product is every individual service you sell, along with any physical items. Place includes the neighborhoods you will cover. Price is the charge for each service or item, along with your reasoning for setting those prices. Promotion is your way of generating new business. A fifth category, Customer retention, describes the ways you will convert purchasers into repeat customers.
While the earlier sections of your business plan defined your goals, your operations plan explains how you will meet them. Everyday short-term process are the daily tasks of booking customers, transporting employees to job sites, performing the actual landscaping work, and settling accounts. Long-term processes are the methods you use for meeting your business goals, such as adding new services or expanding your reach.
The management team section can be tough for small landscaping companies, which may have only a very small staff. Yet financiers want to know that someone in charge has the business acumen to grow the company. If anyone in your company has an MBA or experience starting a successful business, highlight that information here. Otherwise, look for a business advisor, and stress the ways in which that person will affect your company’s growth.
A financial plan can be a real obstacle for a small landscaping company, which is vulnerable to economic downturns, changing neighborhood demographics, and other external forces. Yet this section of the business plan is the most heavily analyzed by lenders and investors. In this section, you must break down your revenue streams based on their relative importance and projected implementation timelines. You must also disclose projected sources of outside funding, and summarize both your past and future Cash Flow Statements, Balance Sheets, and Income Statements based on key assumptions that are reasonable and can be verified through an analysis of your competitors. Articulating a sound exit strategy reassures financiers that you have a realistic understanding of the market and a desire to capitalize on your company’s profitability.
Most small landscaping companies will have a fairly short appendix. Place your full financial projections here, along with any supporting documentation for the claims you made in your business plan.
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