LANDSCAPING JOBS LOOK PROFITABLE. THE ACCOUNT IS STILL EMPTY.
Landscaping subcontractors have no cash left 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 are 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 puts numbers on it. 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," and it adds up 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 crew-day P&L from telecom applies here, with mowers.
Commercial maintenance gives up margin for predictability. You get sophisticated clients, hard negotiation, net-30 to net-60 payment, and rebid risk from a 7 percent underbid. The published contract guidance lists what you can do: 3 to 7 percent annual escalators tied to CPI or labor indexes, and renewal talks 90 to 120 days out. Snow and seasonal services fill the winter but change with the weather.
WHAT MOVES MARGIN IN THIS TRADE.
The Mix That Sets the Multiple
Maintenance books sell at 6 to 9x and install books at 4 to 5.5x. The same profit dollar is worth different amounts depending on which one earned it. Divisional P&Ls are your exit strategy.
The Windshield Tax
Your crews log six-plus unpaid person-hours a day of drive time. Nobody sees it, because route pricing is built on time at the property. Route density and crew-day P&Ls are how you get above the thin 7 percent floor.
The Favor That Became the Baseline
Twelve-month contracts pick up informal additions until the extras are expected. A scope log and quoted enhancements keep the contract paying what it should.
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 | You can get here on the days you control. Bill on time, send complete paperwork, and follow up in week two. |
| Strong | 30 days | Takes work every month. It's the cheapest money you can get. |
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 costs no interest and needs no bank. So we fix billing and collections before we talk about financing.
LANDSCAPING BENCHMARKS.
Landscaping subcontractors at $1M to $5M net 7 percent, against the CFOS net profit target, set at your trade's net profit average at your revenue plus 3.5 points, never below 10 percent, before taxes. The working capital target is 13 percent of annual revenue, and the monthly close should finish by day 10 so the numbers can still change a decision.
FREQUENTLY ASKED.
