Smart Growth

May 7, 2025 / Peter Thelen / April 2025

How landscaping businesses can diversify without losing focus

Let me start with a story about one of my clients. On paper, his business was thriving. Revenues were up, the workforce expanded, assets increased, and profits, along with owner compensation, continued to grow. It seemed like a picture-perfect success. However, there was one significant weakness: his business relied heavily on just one major client at a time, and he primarily operated in a single market segment.

This approach felt comfortable—one project would wrap up just as another began. But in late 2023, a pending client put the brakes on a new project due to economic uncertainty. Shortly after, the existing client, whose work was winding down, decided to cut the project short. Suddenly, he was left with just 30 days of work and 16 employees with no upcoming projects—in an economy where decision-making had largely frozen in favor of maintaining the status quo.

This cautionary tale highlights the critical need for businesses to maintain a diversified client and project portfolio. Even if you’ve been in business for five years or more and have built a strong reputation, seasonal slowdowns, economic shifts, or increased competition can pose unexpected challenges.

The key to long-term stability isn’t offering every service imaginable but diversifying strategically while staying true to your core strengths. By expanding into new client segments and geographic areas, you can strengthen your business without overextending your resources.

How established landscaping companies can grow wisely and profitably

1 Broaden your client base without changing your expertise.

Rather than adding unrelated services, focus on attracting new types of clients who need the work you already do well.

Commercial accounts: If you primarily serve residential clients, consider bidding on office parks, shopping centers, and apartment complexes that require year-round maintenance and lucrative enhancement work. The shift from B2C to B2B can be challenging, but organizations like the NALP mentorship program or the UGA Small Business Center for Success offer valuable resources to help you navigate this transition.
HOA boards and property managers: Homeowner associations often provide steady income and multiple property contracts, reducing reliance on one-off jobs. While this is a distinct market segment, the core landscaping work remains the same. The key is to tailor your marketing and business practices to fit this niche.
Municipal and government contracts: Parks, schools, and public spaces require ongoing maintenance, offering long-term, stable revenue. However, government contracts often go to the lowest bidder, so adjusting your crew’s mindset and business strategy is crucial for success.

Diversifying your client base ensures that if one sector slows down, others can sustain your business.

2 Expand geographically with strategic growth.

If your current market is saturated or highly seasonal, expanding into nearby areas with growing demand can be a smart move.

Identify underserved areas: Look for fast-growing suburban developments or commercial hubs where quality landscaping services are in demand.
Test the market before committing: Instead of immediately opening a second location, deploy a remote crew to assess demand before taking on additional overhead.

Careful geographic expansion allows you to scale efficiently without unnecessary risks.

3 Secure recurring revenue with contract work.

Long-term contracts help stabilize cash flow and reduce seasonal fluctuations. Some business owners avoid maintenance contracts, assuming they yield low margins. However, industry benchmarks show maintenance work can achieve gross profit margins of 45% to 65%, depending on the market segment.

Rather than chasing one-time jobs, focus on securing predictable income streams:

Annual maintenance agreements: Offer residential and commercial clients tiered plans that include mowing, trimming, irrigation checks, and seasonal plantings. Position these as "landscape management" services rather than just maintenance.
Prepaid seasonal packages: Encourage clients to pre-book services like fall cleanups, winterization, and spring mulching. This model improves cash flow and enhances workflow planning and capital investment forecasting.

Stay focused while expanding

After years of hard work building your business, growth isn’t just about taking on more jobs—it’s about taking on the right jobs. Instead of overloading your services, focus on:

Expanding into new client segments that align with your expertise.
Growing into profitable geographic areas through strategic testing.
Securing long-term contracts to ensure financial stability.

By taking a focused and strategic approach to diversification, your landscaping business can grow steadily while maintaining efficiency, profitability, and long-term success.

Peter Thelen

Peter Thelen is Founder of Thelen Financial Certified Public Accountants, A Georgia Urban Ag Council member.

The former CFO of a landscape company, Thelen has spent the last decade either in a landscape company or other industry companies before moving into public practice.