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Lawn Care Business Profit Margins: All You Need to Know

Published on May 9, 2024

Businesses consistently meeting annual lawn care business profit margins have to offer more than just top-notch mowing, trimming and landscaping skills.

A few critical components of any successful lawn care operation include:

  • Managing cash flow
  • Controlling expenses
  • Maintaining solid profit margins

Understanding the financial dynamics that make or break profitability in this industry is critical for building a sustainable operation.

After all, lawn care business profit margins are at the heart of any successful lawn care company's finances.


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Typical Lawn Care Business Profit Margins

Profit margins can vary significantly across the lawn care and landscaping services industry based on a variety of factors, such as:

However, most thriving businesses aim for net lawn care business profit margins in the range of 10%-20% of total revenue.

Net profit margins towards the higher end of that range, around 15-20%, are generally considered strong and indicative of a well-managed operation with lean overhead costs. Margins below 5% may signal potential efficiency or pricing issues that could hinder long-term viability and growth.

Although, it's important to note that newer startups may experience slimmer profit margins in their first few years.

As you build a client base, dial in your operational mode, and enhance efficiency, your lawn care business profit margins should improve.

Keep in mind, more established companies with productive strategies set in place tend to have higher scalability and long-term profitability.

How to Calculate Lawn Care Business Profit Margins

Here’s how to calculate your lawn care business profit margins:

  1. Select a time period for calculations (e.g. month, quarter, year, etc.)
  2. Calculate operating costs (e.g. equipment, payroll, etc.)
  3. Find the difference between revenue and operating costs
  4. Divide the difference by your revenue
  5. Multiply the quotient by 100

Take a look at the formula for this:

  • Lawn Care Business Profit Margins = ((Revenue - Operating Costs) ÷ Revenue) ✕ 100

For example, here’s how you’d calculate your monthly profit margin:

  1. Monthly Revenue - Operating Costs
    • 10,000 - 8,000 = 2,000
  2. Difference ÷ Revenue
    • 2,000 ÷ 10,000 = .20
  3. Quotient ✕ Revenue
    • .20 ✕ 100 = 20%

Factors Impacting Profit Margins

A variety of factors influence your ability to convert revenue into healthy profits.

Some key variables include:

Labor Costs

As one of the highest expenses, managing labor costs through efficient scheduling, training, and hiring practices is crucial for protecting lawn care business profit margins.

In turn, offering competitive wages is a must for attracting and retaining reliable workers.

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Equipment and Transportation Expenses

Purchasing commercial equipment (e.g. mowers, trucks, trailers, etc.) requires significant upfront cost as well as routine maintenance spending.

Remember, prioritizing scheduled maintenance is the best way to maximize your assets and minimize replacements and repairs.

Consider fleet standardization to streamline training, repairs, and more.

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Overhead and Operating Expenses

Minimizing overhead costs (e.g. offices, storage space, insurance, etc.) and maximizing your available resources with conservative choices within your budget can help boost profit margins.

It’s important to keep track of your overhead and operating expenses!

Pricing Strategy

Premium, competitive pricing is vital to the overall success of your lawn care business.

After all, underpricing can lead to cash flow issues and unsustainably low margins over time. However, overpricing can lead to lost clients and leads.

The right pricing strategy largely depends on your local market, and it’s important to routinely reevaluate your prices to ensure maximum profitability.

The key to maintaining a balanced pricing approach lies within detailed tracking.

Workforce Productivity and Efficiency

Streamlining operations helps to maximize resources by eliminating wasted time and costly inefficiencies.

With the right software, you can streamline these daily operations:

Take a free tour of Service Autopilot today to see for yourself how to instantly maximize your crew’s productivity and efficiency!

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Strategically Managing Growth

Did you know, growing too quickly can strain your lawn care business profit margins and reduce cash flow?

Strategically manage your growth by:

  • Only accepting clients you’re staffed to take on
  • Standardizing all training and equipment to be uniform among all crews
  • Gradually adding new services based on demand and available equipment

Strategies for Improving Lawn Care Profit Margins

In addition to raising prices, take a look at a few other sustainable margin-boosting strategies:

Maximize Labor Costs 

Cross-training your crews to perform a variety of tasks creates flexibility in staffing and scheduling.

For example, crews can learn how to change mower blades, make minor repairs, and perform routine equipment maintenance.

Also, take a look at some additional ways you can maximize labor costs:

Streamline Operational Workflows

Streamlining operational workflows is key to reducing travel time and administrative overhead.

These are a few operational workflows the best lawn care software can solve:

  • Instantly optimized routes
  • Automatic estimate follow-ups for leads
  • Automated client communications and payments

Plus, software helps to eliminate scheduling conflicts, lost clients, and forgotten job notes. 

Bundle and Upsell Services

Bundling services together into packages (e.g. mowing, edging, fertilization, etc.) into flat-rate bundles simplifies pricing and creates upsell opportunities to increase revenue per client.

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Prioritize Client Retention  

Since keeping clients is more cost effective than acquiring new ones, prioritizing client retention is key to minimizing churn in the long-term.

Here are a few ways you can keep clients happy with your lawn care business:

  • Provide high-quality services
  • Cultivate meaningful relationships with leads and clients
  • Remembering personal touches to consistently exceed client expectations
    • E.g. remembering client requests listed in the job notes
    • Pro Tip! Keep track of important client notes on-the-go using the mobile app

Automations is the  #1 way to follow up  with clients. If you’re not using it, your business might still be successful - but it won’t grow. 

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In Service Autopilot, our automations send emails and texts to:​

Every lead after an estimate is completed
Clients after their property has been serviced​
Remind leads and clients to send you customer feedback​
Update outdated or declined payment information​
Inform them when a service can’t be completed due to unforeseen circumstances (i.e. weather)​
Remind them of maintenance tips (i.e. putting a cover on the outdoor faucet before the winter)​
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Monitor Performance Metrics–Track Key Metrics

Consistently tracking KPIs (i.e. key performance indicators) helps you to quickly find and fix profit holes while staying on track for meeting goals.

For example, here are a few KPIs you’ll need to track:

Plus, did you know, you can easily track all of these KPIs (and more!) using Service Autopilot?

Maximize Lawn Care Business Profit Margins

The lawn care and landscaping industry hugely relies on local factors for success:

  • Climate
  • Growing season length 
  • Homeowner demographics

However, profitable businesses manage to generate solid double-digit lawn care business profit margins by carefully balancing:

Plus, take a free tour of Service Autopilot to see for yourself how the best lawn care software can maximize your profit margins.

Use these strategies to take charge of your lawn care business profit margins today!

Related: Is a Lawn Care Business Profitable?

Alyssa Sanders

Alyssa is the Team Lead of Creative Marketing at Xplor Field Services. When she's not writing or creating content, you can find her watching a new sci-fi series or shoving her nose into a book.

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