Even a small lawn care company can benefit from a business plan. These plans help you define the goals for your company, begin a budget process, market to the appropriate audience and keep your actions within scope. Without a plan, you may spend time and resources on actions that do not bring you closer to your goal. The business plan is also essential for presenting your idea to investors or banks.
The essential components of a business plan are included below:
Lawn Care Business Plan Template
- Business Description: What unique services will your lawn care business provide and what do you need in order to be successful.
- Services and Prices: Create a menu of services you will provide, along with price ranges.
- Competition: Analyze the competitors in your area and document a plan for offering competitive pricing or a unique service.
- Development: Draw up preliminary growth plans. As your business profits, you can add additional services, employees and equipment. How will that change your revenue and work flow?
- Accounting: Estimate your revenue, expenses and payroll. Draw up a monthly budget for about a year in the future. Be realistic to ensure you will be able to meet expenses. Evaluate prices given this model and make necessary changes.
You can use your business plan as a way to solicit financing or investors, or as a model plan for your company.
Divide Your Business and Personal Expenses
Your company won’t survive long if you don’t learn to balance your expenses… both of them. As the landscaping business owner you have the right to what they call “owner’s capital” and withdrawals. The owner’s capital is the money that is left over after liabilities are accounted for. However, all owner withdrawals need to be recorded in the accounting books as such or you may be in trouble come tax time. For more information on business taxes please consult a certified tax professional.
Don’t Pay Personal Bills with Business Checks
The best financial practice is to have separate accounts and transactions. If a bill arrives in your name, pay it from the personal account and and keep the receipt. If a bill comes in your business name pay it from the business account. This way there will never be any question of who owned the expense at the end of the year.
With this premise now set, make a budget even if it is a primitive budget. Those who have made the decision to go full time have an exceptional challenge ahead of them. If you have just $2200 per month in personal bills and debt, then figure you need to make at least $3200-3500 per month in your business just to stay afloat (with no employees!) This is a major reason why many lawn care businesses don’t make it through their second year.
Gaining at least part-time employment in that first year can help you tremendously! It can help you to come up with the extra funds you will need for both expanding your lawn company and protecting your home-life while you are still figuring things out. In fact, those are the main priorities of year one.
Owner’s capital is the total amount of funds you contributed from your personal financial resources to your business endeavor. For example, if you used $20,000 of your personal savings to start a lawn care business, your owner’s capital in the business would be $20,000.
Owner’s capital is most common with sole proprietorships, as the owners of such a business usually use his or her personal credit line to fund the start up. A corporation or limited liability company may require owner’s capital in the beginning, but usually the business itself develops a line of credit over time.
Owner’s capital is commonly confused with owner’s equity. Equity is the difference between your assets and liabilities. For example, if you used $10,000 of your personal money to purchase lawn maintenance equipment three years ago, that equipment may now be worth $8,000. If you have $2,000 in outstanding bills, then your owner’s equity would be $6,000.
It is important to understand both your owner’s capital and equity, especially during tax time. You might also elect to take a draw from your business in order to pay back the original owner’s capital investment. This means once your investment is profitable, you might pay yourself a certain amount each month as a sort of loan repayment.