LANDSCAPING JOBS LOOK PROFITABLE. THE ACCOUNT IS STILL EMPTY.
Landscaping subcontractors run out of cash for reasons specific to how the work is built and billed, on jobs that are making money. The three that cost the most in this trade are below, taken from landscaping contractor research. Most sit at 75 to 90 days from finishing work to holding the money, and 45 days is achievable.
Cash and profit are measured on different clocks. Your profit and loss records revenue when you invoice and costs when you incur them, while the bank account only knows what cleared. Labour goes out weekly and collects 45 to 90 days later, minus retention. That distance is what a growing, profitable landscaping company funds out of pocket, and it widens as you grow. The specific things that widen it in this trade are what the rest of this page is about.
WHERE IT LEAKS OUT.
The published operations analysis names it precisely: on a commercial route of eight properties across 15 to 20 miles, a three-person crew logs two-plus hours of drive time daily, "six or more person-hours of paid time with no corresponding billable revenue," compounding all season because "most pricing is built around service time at the property, not total crew time in the field." Route density is margin; the telecom file's crew-day P&L applies with mowers.
Commercial maintenance trades margin for predictability: sophisticated clients, hard negotiation, net-30 to net-60 payment, and rebid risk from a 5 percent underbid. The published contract guidance carries the levers: 3 to 5 percent annual escalators tied to CPI or labor indexes, and renewal engagement 90 to 120 days out. Snow and seasonal services fill the winter but swing with weather.
WHAT MOVES MARGIN IN THIS TRADE.
The Mix That Sets the Multiple
Maintenance books trade at 6 to 9x and install books at 4 to 5.5x, and the same profit dollar is worth different amounts depending on which earned it. Divisional P&Ls aren't accounting hygiene; they're the exit strategy.
The Windshield Tax
Six-plus unpaid person-hours a day of drive time hides inside route pricing built on property time instead of crew time. Route density and crew-day P&Ls are where the thin 5 percent floor gets lifted.
The Favor That Became the Baseline
Twelve-month contracts absorb informal additions until the extras are the expectation. The scope log and quoted enhancements keep the annuity an annuity instead of a slow leak. (cfos-job-profitability-system) ---
DAYS SALES OUTSTANDING.
Ninety days is weak, 45 is the target, 30 is strong. Nothing else moves cash faster.
| Position | Days | What it means |
|---|---|---|
| Weak | 90 days | Roughly three months of work funded out of your own pocket. |
| Target | 45 days | Achievable on the days you control: submission timing, complete documentation, follow up in week two. |
| Strong | 30 days | Requires discipline every month, and it's the cheapest capital available to you. |
Moving from 90 days to 45 frees roughly annual revenue divided by 365, times 45 days. At $4M that's about $493,000. At $8M it's about $986,000. That money doesn't come from a bank and it costs no interest, which is why we work the cycle before discussing financing anything.
LANDSCAPING BENCHMARKS.
Landscaping subcontractors at $1M to $5M net 7 percent, against a CFOS target of 10 percent, set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher. Working capital should sit at 13 percent of annual revenue, and the monthly close should finish by day 10 so the numbers can still change a decision.
FREQUENTLY ASKED.
