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Key Takeaways
- Monthly fixed operating costs for the landscaping company are substantial, starting around $40,100, driven overwhelmingly by payroll expenses of $34,208.
- Variable expenses are extremely high, amounting to 245% of revenue in 2026 due to material costs (100% of revenue) and fuel/consumables (40% of revenue).
- Sustainable growth requires securing significant working capital, as the business is projected to take 33 months to reach its breakeven point in September 2028.
- To mitigate risk during the long runway to profitability, immediate cost optimization must focus on labor utilization and managing the $1,500 monthly vehicle lease commitment.
Running Cost 1 : Payroll Expenses
Payroll is the Biggest Fixed Cost
Payroll is your main fixed drain, hitting $34,208 per month in 2026 for 50 FTEs plus two part-time workers. You must nail labor utilization right now, or this expense will crush your margins when revenue dips seasonally.
Sizing Up Staff Costs
This $34,208 figure represents the total loaded cost for 50 Full-Time Equivalent (FTE) employees plus two roles working half-time in 2026. To estimate this, you need the fully loaded salary, benefits, and payroll taxes for every role. Since landscaping is seasonal, this fixed commitment means you pay for capacity even during slow winter months.
- Headcount: 50 FTEs + 2 half-time.
- Annualized payroll: Over $410k commitment.
- Cost type: Primarily fixed overhead.
Controlling Labor Spend
Managing utilization is key because material costs swing wildly at 100% of revenue. If crews are idle, that $34k payroll burns cash fast. Use your subscription model to smooth scheduling by pushing maintenance work into slower periods. Avoid hiring permanent staff based on peak summer demand; that’s a defintely fatal mistake.
- Match staffing to subscription load.
- Use maintenance contracts for slow periods.
- Track utilization daily, not monthly.
Utilization Trap Risk
If your crews aren't billing hours against revenue-generating work, that $34,208 payroll becomes a massive drag. Remember, material costs are 100% of revenue, so labor efficiency is your primary defense against overhead eating profits. Every idle hour costs you significant contribution margin.
Running Cost 2 : Material Costs (COGS)
Material Cost Reality
Material Costs (COGS) are your biggest variable drain right now. In 2026, these costs consume 100% of revenue. This means every dollar earned from a landscaping contract or project goes straight out for materials. This relationship ties project volume directly to immediate expense pressure.
Sourcing Inputs
Estimate COGS by tracking plant inventory, soil, mulch, and hardscaping components needed per job type. Since materials are 100% of revenue, you need precise supplier quotes linked to service packages. What this estimate hides is seasonality impact on bulk purchasing discounts.
- Track plant and soil unit prices.
- Link material lists to service tiers.
- Verify supplier fulfillment times.
Cutting Material Drag
Managing 100% material cost requires aggresive procurement discipline. Negotiate volume discounts with primary suppliers for high-use items like turf or stone, even if initial revenue is low. Avoid over-ordering inventory that spoils or requires storage fees; this is defintely a common mistake.
- Lock in multi-year pricing agreements.
- Standardize material SKUs across jobs.
- Implement strict job-site material tracking.
Profitability Check
If Material Costs are 100% of revenue, your gross margin is zero before accounting for labor or overhead. You must immediately focus on increasing Average Order Value or reducing material spend per job, possibly through design simplification. This model is not sustainable as is.
Running Cost 3 : Yard and Office Rent
Fixed Overhead Baseline
Your base operating cost for physical space is fixed and non-negotiable. The rent for the yard and office space totals $2,500 per month. This amount hits your profit and loss statement every single month, regardless of seasonality or how many subscription contracts you land. You need revenue just to cover this baseline before accounting for labor or materials.
Space Cost Inputs
This $2,500 covers the physical footprint required for administration and equipment staging. To estimate this, you need the total monthly rent from your signed lease agreement. It’s a pure fixed expense, unlike fuel or materials which scale with jobs. You must budget this amount for 12 months upfront.
- Lease terms define this cost.
- It’s non-variable overhead.
- It must be paid monthly, defintely.
Managing Fixed Space
Since this rent is fixed, optimization focuses on maximizing utilization, not cutting the monthly bill itself. Avoid signing long leases for space you don't need yet, which is a common startup mistake. If you grow fast, you might need to move sooner than planned, incurring moving costs.
- Use shared or flexible office space first.
- Ensure yard size matches current fleet needs.
- Negotiate renewal terms early.
Break-Even Impact
This $2,500 must be covered by your contribution margin before you see any true operating profit. If your average monthly contribution margin is $10,000, this rent consumes 25% of that margin immediately. Low utilization of the yard space means this fixed cost crushes profitability fast.
Running Cost 4 : Vehicle Lease Payments
Fixed Lease Obligation
The initial fleet acquisition is locked in at a $1,500 monthly fixed payment. This commitment is purely for the lease structure, meaning fuel and maintenance costs hit your profit and loss separately. You must budget this amount every month, no matter how slow business gets.
Lease Cost Detail
This $1,500 monthly payment covers the capital cost of acquiring the necessary vehicles for your routes. It is a pure fixed overhead, unlike fuel or consumables, which scale with usage (40% of revenue). You need the signed lease agreement terms to confirm this fixed rate over the contract duration.
- Covers initial fleet acquisition.
- Separate from variable fuel costs.
- Fixed monthly overhead component.
Managing Lease Exposure
Since this is fixed, you can't cut it easily mid-term. The main lever is fleet efficiency: ensure you aren't leasing too many vehicles relative to your 50 FTE crew size. High utilization prevents paying for idle assets. Avoid unexpected mileage penalties by tracking usage closely; you defintely don't want those overage fees hitting you.
- Match fleet size to crew needs.
- Track mileage limits strictly.
- Review renewal terms early.
Fixed Burden Comparison
This $1,500 lease payment sits alongside $34,208 in payroll and $2,500 in rent as core fixed burdens. If revenue drops significantly in a slow month, this fixed expense quickly erodes your contribution margin before you even account for variable costs like materials.
Running Cost 5 : Customer Acquisition Cost (CAC)
CAC Mandate
Your initial 2026 marketing spend is set at $15,000 annually, targeting a $250 Customer Acquisition Cost. Honestly, this CAC must defintely generate an LTV significantly higher than $250 to keep the business viable.
Budget Inputs
This $15,000 covers all 2026 marketing efforts needed to acquire new landscaping subscribers. To hit the $250 target CAC, you need to know how many customers you expect to gain from that spend. Here’s the quick math: If you spend $15k and acquire 60 customers, your CAC is $250.
- Annual Marketing Spend: $15,000
- Target CAC: $250
- Required New Customers (2026): 60
Justifying Acquisition
You must rigorously track the Lifetime Value (LTV) of every new subscriber to justify that $250 acquisition cost. If your average customer stays 3 years but only generates $600 in gross profit, you’re losing money on every sign-up. Focus on retention immediately.
- LTV must exceed $250 significantly.
- Track customer tenure carefully.
- Avoid overspending on low-value leads.
Margin Check
If your subscription plan pricing leads to low gross margins, spending $250 per customer is too high. Remember, material costs are 100% of revenue and fuel is 40% of revenue, which severely limits the profit pool available to cover that acquisition spend.
Running Cost 6 : Fuel and Consumables
Fuel Cost Impact
Fuel and consumables represent 40% of revenue in 2026, making it your largest operational variable expense after materials. This cost directly ties your profitability to volatile gas prices and how efficiently your crews drive routes daily. You must manage this metric like payroll.
Cost Inputs
This 40% covers gasoline for trucks and fluid/parts for mowers and blowers. To model this accurately, you need projected fleet mileage, expected gas price per gallon, and the utilization rate of high-consumption equipment. Honestly, this is where small routing errors multiply fast across 50 FTEs.
- Fleet MPG estimates
- Projected monthly gallons needed
- Equipment run-time hours
Efficiency Levers
Managing this means optimizing travel time between jobs, not just hunting for the cheapest gas station. Focus on service zones that maximize route density to minimize deadhead miles (travel without billable work). Poor density kills your contribution margin quickly, despite high AOV.
- Incentivize route density
- Negotiate corporate fuel cards
- Schedule maintenance proactively
Risk Watch
If gas prices jump 15% above your 2026 projection, and route efficiency drops by just 5%, your 40% cost could easily spike to 46% of revenue. That difference erases most of your projected operating profit.
Running Cost 7 : Equipment and Vehicle Maintenance
Maintenance Shock
Maintenance costs are extremely high for this business model. Expect combined vehicle and equipment upkeep to consume 55% of revenue starting in 2026. You’re looking at serious wear and tear from constant mowing and hauling. Honestly, this percentage is the biggest operational drain outside of direct labor and materials.
Maintenance Breakdown
This 55% figure covers two buckets: 30% for vehicles (trucks, trailers) and 25% for equipment (mowers, blowers). You estimate this based on projected fleet size times estimated annual service contracts and emergency repair reserves. It’s a major variable cost, second only to materials (100% of revenue) and fuel (40% of revenue) in 2026.
- Estimate based on usage hours.
- Factor in specialized repair shop rates.
- Account for seasonal downtime needs.
Cutting Maintenance Drag
You can’t stop wear and tear, but you control scheduling. Avoid emergency repairs, which cost more. Standardize equipment brands to simplify parts inventory and training. If you can push vehicle maintenance down to 25% and equipment to 20%, you save 10% of revenue defintely.
- Schedule preventative service early.
- Buy parts in bulk, if possible.
- Keep detailed usage logs.
The Margin Squeeze
This 55% maintenance load means your gross margin is already severely compressed before accounting for payroll ($34,208 per month fixed) or fuel (40% of revenue). If you miss revenue targets, maintenance costs don't drop proportionally, crushing profitability fast. This isn't just a cost; it’s margin erosion risk.
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Frequently Asked Questions
Payroll is the dominant fixed cost, starting at $34,208 per month in 2026, based on 50 full-time staff and two half-time administrative/sales roles totaling $410,500 annually;