Break-Even Calculator for Landscaping Businesses

No matter how much you love mowing yards and revitalizing properties, you didn't go into the landscaping business to go broke. Quite the opposite.

The United States landscaping industry has grown nearly 10% every year since 2017, and with major climate shifts across the continent, homeowners and property managers need help redeveloping their outdoor look and feel. Your expertise has the potential to make you very wealthy.

In this blog, we'll cover all the expenses you should plan for, as well as how to decide what your profit goals should be. If you already know your costs and profit goals, feel free to hit the link below and go straight to the calculator.

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How Can Business Owners Use a Break-Even Calculator

The saying is never outdated, "It's all about the numbers."

Crunching your costs and developing a pricing chart have huge impacts on your bottom line, and with a break-even calculator, you get to simulate what that bottom line will be be.

Basic financial planning is the key to success in any business, and landscaping is no different. You needn't be an accountant to get started. That's why we've developed a free break-even calculator specific to the landscaping business.

Using a break-even calculator for your landscaping business can help you in 5 ways:

1. Anticipate Your Costs. Both fixed and variable costs can sneak up on you if you're not expecting them. But with a break-even calculator, you'll have accounted for all your landscaping business costs. That ensures you hit your profit goals.
2. Set Profitable Pricing. It's not enough just to beat everyone else's pricing or set prices like your competitors. You need to build your prices according to profit goals you want to achieve, as well as costs unique to you that your competitors may not have.
3. Plan Your Workload. After gathering your costs and setting a profit goal, you can see exactly how many landscaping jobs you need to complete in order to be successful.
4. Find Ways to Improve Profit Margins. With this break-even calculator, you can see what would happen to your bottom line if you found ways to cut costs in certain parts of your business. Similarly, by adjusting prices on some of your services, you can immediately see how that raises or lowers your profits.
5. Build an Airtight Business Plan. If you're looking for business partners, investors, or a business loan, then you're going to need a business plan. And your financial statements will be critical to having a good plan. A break-even analysis plays a vital role in projecting your sales and profits.

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A Quick Guide to Cleaning Business Costs

Knowing your business expenses is the first critical step to small business financial planning. As a landscaper, you will have quite a few costs to juggle, but if you know what all of them are and exactly how much you should be charging, then you'll be in great shape. 

Let's discuss different types of costs you'll need to plan for.

PLEASE NOTE: All costs given below are estimates based on averages across the United States. It is critical that you consult your accountant and/or business attorney when planning your costs and financial statements.

Startup Costs

Startup costs are expenditures you'll have as you're getting your business off the ground. You won't necessarily need to spend this money over and over again, as they are usually one-time expenses.

Many landscapers leverage financing (personal loan, business loan, credit card, etc.) for these startup costs. That way they can get to work quickly and generate sales. 

If you are looking for funding, check out our full guide, Best Small Business Loans for Home Services.

Want MORE Jobs for your landscaping business? We can help! Click Here to learn more.

Fixed Costs

A fixed cost is one that remains the same month-over-month. They even stay the same whether the number of jobs you get increases or decreases. Here are the most common landscaping business costs in the U.S.

Variable Costs

As your workload increases, so will some of your costs, and those are your variable costs. Here is a list of the most common variable costs for landscapers in the U.S.

Funding Costs

If you took out a loan or pay dividends to partners/investors, these represent your funding costs. You should budget for these costs within your fixed costs.

For more complex dividend arrangements with partners or investors, you should work with an accountant to decide whether they are fixed or variable costs. For example, a partner might have an agreement where he/she receives 20% of sales quarterly in your first three years of business. Since your sales will fluctuate month-over-month, you may have to calculate this as a variable expense for the purposes of your break-even analysis.

Setting Landscaping Business Prices and Profit Goals

Prices and profit goals are the next step in doing your break-even analysis. Here's some guidance on how to identify an ideal pricing structure and profit goal.

Setting Prices

Setting your prices needs to fit the value you provide customers, compete with other landscapers in your area, and still help you reach your profit goals.

For the calculator below, try adding in prices for different types of services. Estimate what percentage of your sales will occur for each service you provide. Then, you can use the "Average price per landscaping service" in the break-even calculator further down.

Setting Profit Goals

It's important to remember that sales and profits are not the same thing.

You're going to get plenty of sales, but you have to deduct your expenses from your sales to arrive at your profits. Your profit is the money you get to pocket. Think of it as your salary.

When setting profit goals, you get to decide how much money you intend to make as a business owner. Take your desired landscaper salary and divide it by 12, and there you have your monthly profit goal.

Desired Annual Salary / 12 = Monthly Profit Goal

Landscaping Business Break-Even Calculator

With all the information discussed above, plug in your estimated fixed and variable costs into the calculator below. Don't forget to add your average price per service from the calculator above.

The "Jobs you need to book every month" will automatically update as you adjust your costs, pricing, and profit goals. There's no limit to how many break-even calculations you run, so enjoy!

Closing Thoughts

We at GoSite hope you enjoy using this break-even calculator for landscaping businesses. Crunching the numbers will ensure you know your cuts, set the right prices, and achieve success as a business owner.