Starfish Coaching · Landscaping business owners
Landscaping business profit · seasons · maintenance and installs · equipment · weather days
A full season and a profitable year are not the same thing. What is hard to see is how much of each job, and of the year, is left once the crew's travel, the equipment, the fuel, the rained-out days, the quiet months and your own pay have been taken out. There is no honest single number for the average profit margin for a landscaping business, and this page explains why. It also shows a method for finding your own, with a calculator you can use as you read.
Search for the average profit margin for a landscaping business and you will find confident-looking percentages with no way to tell whose books they came from. A figure like that is not worth putting on a page, because it would be borrowed from other businesses and applied to yours. A company that maintains a route of lawns, one that builds patios and retaining walls and one that does both and clears snow in winter are running different businesses. Add a short season against a long one, and a crew of two against a crew of six, and one average hides every difference that matters.
What is useful is the method. Once you know how a landscaping job and a landscaping year turn into profit, you can work out your own number, for each kind of work, see which part needs attention, and judge your landscaping business profitability against the margin you set out to keep and not against someone else's.
Seven things decide how much of what you invoice you keep. The first two are about the calendar and are easy to forget when you are pricing a single job.
Most of a landscaping business's costs arrive all year: insurance, the yard or shop, equipment payments, the office, often some permanent staff, and your own pay. Most of the revenue arrives in the season. If yearly overhead is $72,000, that is $6,000 a month. If the work comes in over seven months, each of those months has to carry about $10,300, which is 71% more than the monthly figure. Price and plan against the months you actually work and not the calendar year. If you clear snow or run winter work, your own year will look different, and the point is to see it month by month.
Spring costs arrive before spring income: repairs, hiring, materials and plants bought before the first invoice is paid. Installs can be paid by a deposit and stage payments, which brings cash in earlier and funds the materials. Maintenance contracts are often billed monthly or by the season, which keeps cash steadier. Then there are the quiet months, which still have bills. Work out how many of them your business can pay for, and when. The construction cash flow page covers billing, deposits and payables.
A maintenance route is repeat work with a price per visit, where the big variable is the driving between stops. An install is a project with an estimate, a deposit, deliveries, weather and a warranty. The table below sets them side by side. Pooling them into one margin hides which one is paying for the other.
Mowers, trimmers, trucks, trailers and compactors cost money to own, insure, fuel and repair. Divide the yearly cost by the hours the machine really works to get its cost per hour. A mower that costs $6,000 a year and works 400 hours costs $15 an hour to have. If a wet summer cuts it to 300 hours it costs $20 an hour, and the price you charged did not move.
Crew time starts costing you the moment the crew leaves the yard, whatever the customer is billed for, and an extra person on a crew is a fixed cost for the day. In the example below, 18 of the 66 paid hours were travel and a half-day lost to rain, and no revenue came in against them. Decide in advance how you price weather: an allowance in the quote, or terms in the contract.
Markup is a percentage of cost and margin is a percentage of price, and they are never the same number. Materials bought for $2,400 and sold for $3,000 carry a 25% markup and a 20% margin. To keep 25% of the price you need a 33.3% markup. Waste, breakage, delivery and plants that do not survive come out of that too. The overhead and profit page shows the full markup table.
A visit to replace plants that failed or reset pavers that settled earns nothing, uses a crew and a truck, and delays a paying job. Count how many you made last year and cost each one. Then look at yourself: if you work on the crew and no wage for you is booked as a job cost, every job looks richer than it is. Give yourself a fair wage for those hours. What is left after that, and after overhead, is the profit of the business, which is a different thing from your pay.
The headings below are the questions to ask of each kind of work in your own business. None of this is a benchmark. It is a way to see why the same company can have a very different year on each.
| Maintenance contracts | Design-build installs | |
|---|---|---|
| How the money arrives | Repeat visits, often billed monthly or by the season, so cash is steadier. | One-off projects, usually with a deposit and stage payments, so cash comes in lumps. |
| Where the time goes | Mowing, trimming and tidying across many stops. Travel between the stops is the big variable. | Longer days on one site: digging, building and planting, with deliveries and disposal. |
| What tends to go wrong | A price per visit that ignores travel, extra requests nobody charges for, and weather days with no work. | Estimates that miss the site conditions, change orders given away, and weather delays on a crew you are already paying. |
| What to measure | Profit per visit and per route, and how much of the day is driving. | Margin against the estimate, hours paid against hours quoted, and what the warranty costs. |
These numbers are invented to show the arithmetic. They are not an industry figure, a benchmark or a target. The job is a three-person crew, two eight-hour days on site and a half-day lost to rain. The figures are in dollars, but the arithmetic works in any currency. Your costs and prices will be different, which is the whole point of working it out yourself.
| One patio and planting install, step by step | Amount |
|---|---|
| Labour in the quote: 48 crew hours at $75 | $3,600 |
| Materials in the quote (cost $2,400) | $3,000 |
| Job total | $6,600 |
| Crew paid 66 hours at $32 (48 on site, 6 travelling, 12 lost to rain) | $2,112 |
| Materials at cost | $2,400 |
| Equipment, fuel and disposal | $350 |
| Direct cost | $4,862 |
| Gross profit: $1,738, or 26.3% of $6,600 | $1,738 |
| Share of return visits (one job in ten, about $300 each) | $30 |
| After return visits: $1,708, or 25.9% | $1,708 |
| Share of overhead (office, insurance, yard, software, owner's pay, and the quiet months) | $1,100 |
| Left over: $608, or 9.2% of $6,600 | $608 |
The same job can be made to look very different. Eighteen of the 66 paid hours had no revenue against them, which is $576, or 8.7% of the job total. Leave one crew member's wage out because the owner did the work, and the direct cost drops to $4,158 and the job looks like a 37.0% gross margin. It is not. And the materials marked up 25% earn $600, where a 33.3% markup would have earned $800. Each of these is small, and they all point the same way.
That is also why the average profit per landscaping job is a poor number to chase. Here the job leaves $608. A weekly maintenance visit would leave a very different amount, for different reasons. Work each type out on its own.
This is the same calculator as on the overhead and profit page. Replace the starting figures, which are only placeholders, with a full year of revenue, direct job costs and overhead, because landscaping income moves with the season and a part-year hides the quiet months. Put your own wage in overhead if it is not already in your direct costs.
Where the money actually goes
Nothing is sent anywhere. The arithmetic runs in your browser.
Markup is calculated on your cost. Margin is calculated on your price. They are never the same number, and the gap gets wider the higher you go.
| If you mark up | Your margin is | You keep on $100k |
|---|
To keep 25% you have to mark up 33.3%, not 25%.
| Sell more at today's margin. Extra revenue needed | n/a |
| Or hold revenue and lift net margin to | n/a |
| Or cut overhead by | n/a |
Three doors into the same room. The third is usually the fastest, and it is the one owners look at last.
Revenue, costs and what was left, month by month. It shows how much of the year the season really carries.
Maintenance, installs, clean-ups, and winter work if you do it. Whatever your business really does.
Crew hours as paid, travel and weather included, equipment at its cost per hour, fuel, disposal and materials at cost.
How many did you make last year, and what did each cost in crew time, truck and materials?
The office, insurance, the yard, software, admin pay and your own pay, including the quiet months. A simple split is by revenue or by crew-days.
The first gives you the net margin of that type of work. The second gives you your own profit per job.
Not with a national average. Where one type of work keeps far less than another, look there first.
There is no single honest figure, and a page that gives you one percentage is guessing. A business that mows and maintains a route of lawns, one that builds patios and retaining walls and one that does both and clears snow in winter do not share a margin. The length of your season, the size of your crews, how much equipment you own and what your region costs to operate in change it again. A borrowed average blends all of that into a number that is not true of any one business, so this page does not quote one.
The useful test is your own net margin over a full year, worked out with your pay included, tracked over time and set against the margin you decided you need to keep. The overhead and profit calculator gives you the whole-business version.
There is no honest single figure. A weekly maintenance visit and a design-build patio carry completely different costs, travel and risk, so an average across both describes neither. As a simple illustration with invented numbers, 400 maintenance visits that each keep $30 and 12 installs that each keep $1,500 add up to $30,000 over 412 jobs, which averages about $73 a job. That number is true of neither kind of work.
To find your own, add up the profit you kept on one type of job over a year, after direct costs, return visits, overhead and a fair wage for yourself, and divide by the number of those jobs. Do it for each type of work separately.
It can be, and many are, but a busy season and a profitable year are not the same thing. A landscaping company can be flat out from spring to autumn and still keep very little if the off-season costs, the equipment, the fuel, the travel, the rained-out days and the owner's unpaid hours are not in the price. Landscaping business profitability is something you work out for your own business over a full year, by putting revenue, direct job costs and overhead side by side, which is what the calculator on this page does.
You cannot tell from the type of work alone, so do not assume. Maintenance work tends to bring steadier cash and a route you can plan, and it can be badly underpriced if the price per visit ignores travel between stops and the extras nobody charged for. Installs bring bigger tickets and bigger risks: estimates that miss the site, weather delays and return visits. Work each one out separately, using hours paid, equipment cost and a share of overhead, and the answer for your business will be a number and not a guess.
Start by finding out what they cost you. Add up the paid hours that had no revenue against them last year, then the overhead you paid in the months with little work. In the example on this page, a seven month season has to carry $72,000 of yearly overhead at about $10,300 a month, 71% more than the $6,000 monthly figure. Once you have your own numbers you can build a weather allowance into quotes and contract terms, and set prices against the season you actually work and not the calendar year.
Markup is a percentage of what the materials cost you. Margin is a percentage of what you charged. Materials that cost you $2,400 and sell for $3,000 carry a 25% markup, but only a 20% margin. To keep 25% of the materials price you need to mark them up 33.3%, which sells the same materials at $3,200 and earns $800 and not $600. Waste, breakage, delivery and plants that do not survive are cost too, so check what the materials really earned after all of that.
Yes. If you do the work and no wage for you is booked anywhere, the job looks far more profitable than it is. In the example on this page, leaving one crew member's wage out lifts a 26.3% gross margin to 37.0%. That is not profit. It is your pay, counted as if the business had earned it.
Yes. The arithmetic is the same anywhere, and the season is simply the part you fill in for yourself: a short northern season, a year-round climate or a mix of growing and winter work each change the overhead per month of work, and nothing else in the method. Costs, equipment and wage rules differ by place, so put your own in. Eric works with design and construction business owners wherever they are. The business coaching for landscaping companies page explains how.
If the numbers surprise you, talk it through with Eric. The consultation is free and the arithmetic is the same for landscaping owners anywhere.
Eric Lee · Starfish Coaching · 1937 Triumph St, Vancouver BC V5L 1K6
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