TLDR (in advance): Seeking advice on how to run a profitable gardening business, expanding while staying competitive and finding the 'right kind' of jobs, ie year-round maintenance requirements and clients who understand they need to pay properly for experienced, qualified gardeners!
---
I run a gardening business which started as me on my own, now 15 years in I have a limited company, 3 part time employees (8 days per week between them) and have just had to register for VAT.
I 'fell into' gardening and never intended to be running a business, and while I consider myself a decent gardener, I find the business side stressful and overwhelming. I have never had a strategy and have just taken on more and more work and hired more people to meet demand. My turnover is now over £100k but I never seem to be making money.
I have qualified as a garden designer and that is the direction I want to head, but it will be a few years before I make enough from just doing design, so need to make the maintenance side of the business work to keep me afloat.
I registered for VAT in August (design work has pushed me over the VAT threshold as I now buy a lot of plants), some clients have voiced their annoyance at the additional cost, others have effectively sacked us as we are now too expensive compared to the many one-man-band gardeners (£36ph inc VAT). To them, we have put our price up, but obviously we don't see an extra penny!
I am based in Bristol, and over the years I have sought to work in larger gardens that require two gardeners for at least half a day (rather than doing 3/4 city gardens in a day) and are more likely to need us all year round. Naturally, such gardens are out of the city so we now spend 1.5 to 2.5 hours driving every day which is inconvenient and costly.
It seems gardening is a tough industry to make money in as it will always be limited by a relatively low hourly rate and maintenance being essentially labour-only so dependent on man hours.
I would be really interested to hear from anyone who has faced similar challenges and how you have managed expansion without feeling like you are just chasing turnover to cover ever increasing expenses!
Many thanks
Views: 381
Replies
Piers, I will try to offer practical advice on this without sounding too much of a know it all! As you may know ill health has forced me to retire after 40 plus years in the trade and I can recognise your issues having faced the same some years ago. I soon realised that there is little money in domestic work which is time and labour intensive and the only way to make money is in commercial grounds maintenance, I got rid of 2 employees and concentrated on working as a sole trader on commercial sites. Yes long hours and brought in sub contractors as needed but ended up with a 6 figure turnover business that generated substantial profits. Vat is not an issue to other businesses. I did keep some domestic work but it paid the same rates as the commercial. I am not surprised you are not making money £30 ph plus vat is just not enough, a good rule of thumb is £1 per minute plus vat and really you should be trying for £1.50 to £2 . Charging an hourly rate is never going to get you where you want to be - only price work will do that you need to take the view that if the customer will not pay your price work quote to walk away and do not get involved in conversations " well how long will you be here " which you will only get from domestics commercials just want the job done at a fixed price.. " Turnover is vanity, profit is sanity" To summarise you will never do anything more than earn a living from charging an hourly rate in the domestic market. Hope that helps? Any questions just ask.
Hi piers It seems you could be in the perfect position as Peters experience and insight suggests to look into commercial work .
Possibly you have outgrown domestic work and this is the turning point .
I started to realise that hourly rate was like a ball and chain , some domestic customers will always breakdown your one off price into an hourly rate so £60 becomes £20 per hour in their eyes and they can live with it taking you Three hours to complete a job which in reality takes you just an hour or two but £60 somehow seems too much to them and others will try and tell you how long they think it should take you so they can influence the price .
I always found this frustrating to try to explain that experience makes a gardener more efficient and efficiency adds value but to some it's how many hours you spend in the garden which offers them value for money , if you go down this route your earnings are just being diluted .
At least you made the decision to seek out larger domestic gardens which require two people all year round , This was my direction but I did not have employees , Two of us but both invoicing the client separately as we were seperate businesses which gave us and the client greater flexibility and it added great value in terms of how the gardens started to benefit .
Obviously compatibility and integrity are qualities you will be looking for if choosing to work with another business .
If you are doing design makeovers I can't understand why customers are complaining at the cost it's the nature of the beast , added cost is to be expected .
With the cost of plants a designer showed me how to make some savings by choosing plants in pots which could be divided , small to start but they soon catch up and save the client some money in cases where every little helps .
Eventually your gut feeling helps you choose the right clients to work for and the best business model to adopt even if it means downsizing
As said it seems to me like you could be ready to change your business model , sounds like you have the drive and capability ,
Piers - Im retired now and the business sold on... but I feel your pain.
I always traded just below the VAT threshold - literally getting clients to pay for their own plants - so cost it all up for them, add a margin to your trade discount (they are still getting a discount over retail) then they pay the wholesalers .... for the plants, and you an amount for getting them the trade discount, working up the requirements etc etc .....the same way as many small builders work. In the T&Cs you have to have a clause that says you have to be employed to plant the plants. Before I had that I had a couple of clients (soon to be ex clients) who used me to get the discounted price then said "well plant them ourselves"
Other than that, Peters comments are very valid - the catch is I just did not like my strimmer finding used tampaxs in comercial garden/landscape sites - so only had a small number of commercial sites. I also didnt ever buy the really big ride on mowers.
Im not sure that my reply helps.... but I sympathise.
Re designing... I found it better to have a number of designers that thought I was good at realising their designs, Im not sure having a designer on your books is the way forward. Better to introduce a designer or two to a client - and then they do the same for you. Designers around here (Wilts) have real issues finding companies to impliement their designs, so are normally eager to find a reliable way of doing this.
Good luck...