Sample Business Plan

Executive Summary

ABC Landscape is entering the landscaping trade in the Cambridge, Ontario area. The business will be run by a newly retired couple with the help of one general labourer. The husband, aged 55, has worked in carpentry is entire life, and enjoys working with his hands. His wife, aged 51, is a stay at home mother, who has taken on volunteer work at a group home since her children moved away. She enjoys gardening, and suggested to her husband that they create a business where she can garden and landscape backyards and he can install ponds, water features, and build necessary accessories (bridges, swings, benches, etc.). As this is something they both enjoy, they have invested approximately $50,000 of their savings into creating this business in their area.

The Business Environment

Business Summary & History

ABC Landscape is entering the landscaping trade in the Cambridge, Ontario area. The business will be run by a newly retired couple with the help of one general labourer. Since the business is seasonal and both the husband and wife enjoy taking care of the yard work, they felt that opening a landscaping business is a great way to make some additional money during the summer months.

Industry Overview

Ontario is known for its ideal climate. With the warm summers and cold winters, Ontarians can grow nearly anything and create an enjoyable backyard experience. With this in mind, people in Ontario are getting busier and busier and are unable to care for their backyard and still have the time to enjoy it. As a result, many families are hiring landscapers to care for their yard, install ponds and water features, and create a place everyone can enjoy.

The landscaping industry is also constantly growing. The market has grown 42% in the last 3 years. As this market continues to grow and people enjoy the “greener” side of Canada, there is more of a need for landscapers.

Sectors Within the Industry

Within the industry there are 2 sectors:

Residential: People wanting their yards modified or updated
Commercial: Businesses that want an appealing front entrance

Our focus is the residential sector of this market. We feel that as we are not yet established and well known, we would be more successful with home owners than we would businesses. As our name is spread around the area, we will increase our business size and move on to work on commercial properties.

Seasonal Factors

Landscaping is obviously a seasonal undertaking. While snow removal may be an issue in the winter months, the summer months are a focus for plants, water features, and outdoor experiences. While the weather (ie. Rain) may be an issue during the summer, this is fairly uncommon in our geographic area.

Consumer Trends

The landscape market has grown by 42% in the last 3 years, resulting in a rapid incline in the number of landscapers needed in the area. Also, many people are becoming more concerned with the environment, and are interested in creating a backyard habitat of their own to enjoy nature. This means that more people are interested in installing professional quality ponds and water features rather than a preformed pond made of plastic.

Position in the Industry

As ABC Landscaping is a new business, they have no yet established their position in the industry. The do plan, however, to be a reasonably priced, residential landscaper.

Competition

Currently in the Cambridge, Ontario area, there are approximately 5 strong competitors in the market. The largest competitor in the market holds approximately 60% of the market share, while the other 4 make up the remaining 40%. The reason the other 4 landscapers only account for 40% of the market is that they are lacking in services. They will landscape your property, however will not maintain it or install water features. This limits their market and discourages people from using them.

Use of Technology

We plan to use our home computer system to track our progress, as well as our customer base. To show our progress, we will do the book keeping ourselves and will keep a database of our customers and the services they have used. Not only will this help us to stay organized and under financial control, but we will use this data to market ourselves better to each customer with our direct mailings and brochures.

Marketing Plan

The Target Market

The target market for landscaping services is very large. Many homeowners are interested in the appearance of their home, and adding something like a water feature to the front or back yard can make your home that much more appealing.

General Information about Target Market:

Couples aged 35-70
Own their own home
Have lived in the same location for 3+ years
Family with children (generally children are over 13)
Dual income families
Middle to upper class families

Services

We will market our company as the landscaper that can complete all jobs for you. We will show you the quality work we’ve done by posting a sign at all the jobs we complete with our contact information, as well as providing brochures with images and details on the products we use. Our main contact with consumers will be by phone, however we will have brochures and mailings with more information on our products, prices and our company.

Pricing Strategies

Our pricing strategies were based on those of our competitors.

To install a liner pond (up to 2,500 gallons): $4,000-6,000
Note: cost of supplies for a liner pond up to 2,500 gallons is approx. $1,000.

To install a liner pond (2,500+ gallons): $6,000+ (dependant on supplies needed)
Note: cost of supplies for a liner pond larger than 2,500 gallons is approx. $2,000.

To install a waterfall or stream: $3,500-5,500 (dependant on supplies needed)
To install other water features: dependant on size and supplies needed

Individual price quotes will be available by request only

Credit Terms

As many of our customers are not repeat users of our services, our terms will be net 30, cash or cheque only. The 30 days will be effective as of the first day of work. Should the job take more than 30 days, the payment must be by the 30th day of work, or work will subside.

Sales/Distribution Plan

As we have not yet created a customer base, we must first establish ourselves. To do this, we will landscape our own yard and put out a sign saying the landscaping was completed by our company, with our contact information included. If this creates leads, we will use this beginning customer base to place signs as well, in hopes to establish a more developed customer base.

If this does not create leads, we will advertise our services at garden centers, and also try to create leads through direct mailings and hand delivered mailings. Also, during this time we will be advertising in the yellow pages, and doing some direct mailings in the well kept neighborhoods.

Advertising & Promotions Plan

Advertising Efforts:

Have 10,000 brochures printed and hand delivered to homes in well kept neighborhoods (once in May and once in late June) (Estimated Cost: $1,500 each time)
Advertise in the yellow pages (Estimated Cost: $2000)
Bi-weekly Advertisements in the Saturday newspaper in the garden section from Mid-April until Mid-July (Estimated Cost: $1500)

We estimate that the cost of this advertising will total $5,000, however will promote approximately $50,000 in revenue.

Operations

Stage of Development

Currently the business has secured a facility to store our equipment when not in use (estimated cost of $600 monthly), as well as one work truck to get us to each job. Also, we have ensured that people are interested in landscaping services by interviewing garden centre employees discussing the customer base at their location.

In order to be operational, we must:

Purchase equipment & tools for everyday use (Approximately $3,000)
Hire and train one general labourer to assist in installations (Wage: $10/hour)
Advertise our services to our surrounding area (Approximately $5,000)

Risks

The following factors could pose problems to the business:

Poor weather conditions
Climate change (ex. Drought)
Damage to equipment
Housing market bust

Contingency Plan

Drought has never been an issue in this area. Constant rain has also never been an issue in this area. Also, to prevent a loss of equipment, all equipment with a value exceeding $200 will be insured (Estimated cost of $55 semi-annually). If our housing market was to bust, we could sell some of our equipment, however we may not recoup all of our costs. It’s likely we could sell our tools and machines, however selling supplies would be next to impossible.

Production Process

Jobs will be completed on a first come-first serve basis. Before each job is started, we will meet with the customer and offer them a price quote as well as a supply list to explain the costs of the installation. Once the supply list has been approved by the customer, supplies will be ordered and the job will begin when supplies arrive. No supplies are to be ordered until the customer has signed the contract to the job and the supply list has been confirmed.

Finance

Income Statement

Currently we believe the approximate annual revenue will be $120, 000 for year one, doubling at $240, 000 for year two. To come to this we considered:

	Year 1	Year 2
Number of Jobs/Week	1	2
Number of Weeks/Season	24	24
Total Number of Jobs/Season	24	48
Average Cost of Job	$5,000	$5,000
Total Gross Revenue	$120,000	$240,000

The expenses are as follows:

Expense	Year 1	Year 2
Fixed Expenses
Advertising	$5,000	$5,000
Rent (for storage facility)	3,600	3,600
Insurance	110	220
Gas & Travel Expenses	1000	2500
Printing & Stationary	2,000	3,5000
Telephone	1000	1500
Variable Expenses
Supplies	43,200	96,000
Wages (for general labourer)	8,000	16,000
Total Expenses	$63,910	$128,320

Thus, our profit will be approximately $56,090 for year one, almost doubling at $111,680 in year two.

	Year 1	Year 2
Total Gross Revenue	$120,000	$240,000
Total Expenses	$63,910	$128,320
Net Profit	$56,090	$111,680

Balance Sheet

Our balance sheet shows that we are in a strong financial position. We currently have no liabilities, with $25,000 in cash, and other assets of $28,000. As time goes on and we have some cash flow, we will begin to invest more into the business and develop our equity further.

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