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Common Mistakes Entrepreneurs Make in Landscaping Businesses

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Business Advice

Sometimes the greatest obstacle for a landscape entrepreneur is themselves. Developing a startup means developing a business model, culture, and financial plan from the ground up. Doing this all on your own can leave your landscape business vulnerable to blind spots that you may not be aware of.

When financial success depends on the landscape business owner’s ability to accurately read the health of their company, it is important to regularly review your operation with an unbiased perspective. To help assist you in this endeavor, the team behind our business management software for landscapers has devised a list of common mistakes entrepreneurs make that you should be mindful of when launching your landscaping business.

crew member evaluating the cost of materials on the site

Confusing Profit Markup for Profit Margin

Profitability is always the end goal for any landscape business. Sustaining income means sustaining your business, which means sustaining a profit. But how you measure profit can also determine how you capture it. One of the most common errors that landscape entrepreneurs make is confusing profit markup versus profit margin.

The confusion surrounding profit margin is based on how one calculates price. A simple trick that many small business owners are guilty of is adding a base percentage to the cost of a product to determine the price. For example, if a job costs a landscape business $100 to complete, the owner might charge the client $120 (the base cost plus 20%, if 20% was their desired margin). This is not a profit margin, however; this is a profit markup. The formula for profit margin is:

price - cost formula

Because profit margin is based on price and not cost, many landscape business owners may be running a lower profit margin without even knowing. By making this distinction, landscape entrepreneurs can more accurately adjust their pricing to better achieve their profit objectives.

A Landscape Entrepreneur Can’t Be the Business

The easiest mindset to slide into is thinking that you can do everything yourself. While the majority of the heavy lifting in the early stages of a landscape startup rests on the work of its founder, this isn’t a sustainable business model. Not only does it increase the inevitability of burnout, but it also limits the amount of insight, knowledge, and skills available to your business.

Burnout, according to CB Insights, was responsible for about 8% of all startup failures in 2019.1 Considering how attainable a healthy work-life balance is, this is a surprisingly high figure – and one that should be taken into consideration. By hiring a diverse and driven workforce, you can alleviate the pressure put on yourself while also increasing the efficiency, quality, and productivity of your operations. No one is great at everything, after all. And even if they were, being a one-person show isn’t a sustainable or scalable business model.

landscape entrepreneur using the lmn suite to monitor business

Forgetting About Marketing

For small business owners, marketing can seem like a frivolous and unnecessary cost, but for many startups, this is a mandatory effort. Based on the same CB Insights report, marketing failure was responsible for about 17% of all startup failures in 2019.1 That is more than one-sixth of all entrepreneurs across all sectors. Accounting for the amount of competition available, a targeted marketing campaign could make a huge difference.

Marketing doesn’t have to be big to be successful, either. By researching your audience and your market, you can use channels like direct mail and see immediate success. The adage ‘If you build it, they will come’ is not a realistic expectation. This mentality could hinder the success of a landscape entrepreneur long-term if not addressed.

As with any enterprise, there is always the possibility of business mistakes in the landscaping industry. So rather than review them all, it is important to consistently take a step back and evaluate your business from an outside perspective. Sometimes the easiest way to do that is by implementing a scheduling or payroll system, such as the LMN Time application, that can accurately monitor the profitability of your landscape business.

To minimize the number of common mistakes entrepreneurs make and optimize the profitability of your landscaping business, download LMN Time today. Manage the productivity and efficiency of your crew and operations from your smartphone or computer.

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