I’ve been running my own business for over 10 years now, and what a journey it’s been. From learning the ropes to adapting along the way, the one thing that’s been constant is the importance of managing my finances well. Here, I’m going to share some of the financial strategies that have worked for me, in the hopes that they can help other lawn care business owners navigate their own financial paths.
Now, I don’t claim to have all the answers, but I’ve developed systems that help keep stress at bay, which is what matters most for me.
Gardening Business Finances
Setting Myself Up for Financial Success
If you’ve followed my story, you’ll know that shifting from property maintenance to lawn mowing wasn’t just about changing the services I offered—it was also about adjusting my financial strategy. When I started out, I made a list of all the equipment I needed—an 18″ Etesia mower, a 21″ Lawnflite roller mower, plus a Stihl strimmer, brushcutter, and blower. To my surprise, this initial investment totaled around £5,000.
Fortunately, I had some surplus cash from my previous business, which helped me avoid any unnecessary debt or financial strain. This initial investment quickly paid off, and many of these purchases are still in use today.
A word of advice: avoid taking on debt unless absolutely necessary. While you don’t need to splurge on top-of-the-line gear, just ensure you take good care of what you buy, and it should last you.
How I Manage Day-to-Day Budgeting
Budgeting is at the core of any successful business. I like to keep things simple, which is why I use five separate bank accounts, each with a specific purpose:
Current Account: This is the operational account where I receive customer payments and pay bills. I always keep a minimum balance of £2,000 as a cushion for unexpected expenses.
Tax Account: This account is dedicated to VAT, National Insurance, and corporation tax. The amounts are calculated in real-time using my accounting system to keep things accurate.
Equipment Fund: I’ve set aside £3,000 in this account as a safety net for any urgent equipment replacements.
Fleet Account: With a minimum balance of £5,000, this account covers a full year’s worth of vehicle-related expenses, ensuring I can keep working even if something goes wrong.
Capital Savings Account: This one is my reserve for larger investments or dividends.
Some may think these balances are a bit excessive for a one-person operation, but I believe it’s better to have a little too much than not enough. When things go wrong, I’m prepared, and that keeps stress levels low.
Why I Separate My Personal and Business Finances
I’ve learned the hard way that it’s crucial to keep my personal and business finances separate. By using different banks for each, I avoid any confusion. Operating as a limited company also helps to clearly separate my personal assets from my business. This is important because many sole traders tend to mix funds between the two, which can cause unnecessary problems.
It’s not uncommon for small business owners to get hit with a surprise tax bill, but if you manage your finances well, you should always know what you owe. With online courses and user-friendly software, keeping track of your numbers is easier than ever, so there’s really no excuse to ignore this side of your business.
How I Manage Billing and Payments
I take my pricing very seriously. Using detailed spreadsheets, I calculate my fixed and variable costs to ensure my rates are profitable. I never worry about what others are charging; my focus is on whether my numbers work for me. You can even find online versions of my pricing system on my website.
To maintain financial stability, I raise my prices slightly each year to keep up with inflation. This helps set expectations with my customers, who are used to these modest increases and accept them as a normal part of doing business.
Invoicing and Accounts System
For invoicing, payments, and overall accounts management, I rely on FreeAgent. It’s an excellent online accounting software that helps me manage tax returns, payroll, and keeps my financial records up to date. I pair it with GoCardless, a direct debit system, to easily issue invoices and collect payments without the hassle.
This system works like a charm—both for me and my customers—providing a seamless, reliable way to manage payments.
Managing Day-to-Day Expenses
Keeping track of expenses is crucial. My main costs include leasing my van and covering my salary and pension contributions. Communication costs, like my mobile phone and virtual landline, are minor but are still factored in.
For fuel and materials, I use a company credit card, which I pay off in full each month. This system allows me to get paid for the work before I even have to pay for the materials used.
I also keep my equipment costs in check by maximizing the use of what I already have, instead of constantly upgrading. This not only saves money but supports a more sustainable approach to my business.
Planning for Growth
For me, growth isn’t about expanding the team—it’s about improving my quality of life and exploring new opportunities that fit within my capacity. I started offering lawn care and renovation services to select customers, which brought in thousands more each year.
Having experience across all areas of the landscaping industry, I’ve found that high-end domestic services suit me best. These jobs allow me to build strong customer relationships and offer high-quality service that’s appreciated by my clients.
There’s no need to expand your team unless it truly benefits your business. A well-run, one-person operation can easily generate a good income without the added stress of managing a larger team.
Handling Financial Challenges
To minimize financial headaches, I’ve adopted a “direct debit only” policy for customer payments. This eliminates the stress of chasing payments and reduces the risk of late payments.
In the past, I dealt with a housebuilder who delayed payments, so I took a firm stand. I paused services until the debt was cleared, charging extra for the additional work required due to the delay. This assertive approach, while maintaining open communication, helped me manage payment issues without damaging my mental well-being. I also decided to walk away from that contract when payment delays became a recurring issue.
The Importance of Emergency Funds
Having emergency funds is key to managing a successful business. Each of my accounts acts as a dedicated emergency fund for its specific purpose—whether it’s for equipment, vehicle expenses, or other business needs. This gives me the confidence to know I’m prepared for whatever comes my way.
I don’t rely on credit, and there’s a real sense of peace that comes with having thousands of pounds safely tucked away.
Managing the Psychological Aspect of Small Business Finances
A solid financial structure, particularly the direct debit system, has helped reduce the stress I once felt. Unpaid invoices are one of the biggest stressors for any small business owner, and I make it a priority to avoid that.
Another way I’ve reduced stress is by diversifying my customer base. This means I’m not relying on a single customer, giving me the freedom to walk away from any job that’s not working out. This security allows me to focus on delivering quality service, maintaining my well-being, and achieving a healthy work-life balance.
Conclusion
Over the past decade in the lawn mowing business, I’ve learned that managing finances is just as important as delivering excellent service. By sharing my journey and the financial strategies that have worked for me, I hope to offer valuable insights that can help other business owners achieve stability and success in their ventures.
