8/24/2026 - By Harrell's

If you run a lawn care company, you already know labor is the single biggest lever on your profit and loss statement (P&L). It's usually your largest expense, and it's the one most owners feel like they have the least control over. Raise pay and margins shrink, hold pay flat, and you lose your best people to whoever offers fifty cents more an hour.

Performance Pay flips that equation. Instead of paying your team for hours on the clock, you pay them for the results they produce: routes completed, upsells closed, callbacks avoided, retention protected. Done right, your best people make more money than they ever could on an hourly wage, and your labor cost, as a percentage of revenue, drops because you're no longer subsidizing slow routes and wasted time.

We've been teaching this system to lawn care companies for a while now, and the results have been consistent enough that I want to share real numbers from three of them. I'm not using their names, but the numbers are real.

Why I Care About COGS Before Revenue

I say this to every owner I work with: “I don't care about your revenue or your net profit until I understand how much you spend to generate a dollar of it.” If a company can generate a dollar of revenue while spending 35-45% of it on field labor and materials, that's a fantastic company. That's the number that tells me whether a business is actually healthy.

Once you get labor and materials under control, then we scale. Then we take that company to millions of dollars in revenue, because the math already works. Net profit isn't something you chase directly; it's determined by how you invest the dollars that controlling COGS (Cost of Goods Sold) frees up: new team members hired to lead and grow the company, marketing, new branches in other cities, paying down debt, bonuses for the owner.

Most new business owners focus on revenue and net profit before they understand the numbers that actually drive growth: COGS and Gross Profit. That's backward. Performance pay is one of the main levers we pull to control these numbers.

The three companies below are proof of what happens when you fix that order.

How Performance Pay in Lawn Care Impacts The Numbers: 3 Real Examples

Company A is a multimillion-dollar residential lawn fertilization and weed control company in the Southeast, serving more than 3,500 clients. They implemented Performance Pay on November 1, 2025.

The implementation of Performance Pay resulted in an 8.8-point drop in labor and taxes, and a 13.6-point jump in gross profit, year over year, over the same seven-month window. And they didn't lose a single employee through the transition. Their leadership team did the hard part right; they took the time to explain to their techs why the old model couldn't hold.

A company can't run sustainably at 51% gross profit when labor and taxes alone are eating over a quarter of every revenue dollar. Once the team understood the why; the how was much easier to implement. We believe this company can push labor and taxes below 17% in the near future.

Company B is a multi-million dollar residential, full-scale lawn care company in the Northeast. They implemented Performance Pay in 2024.

In two years, by harnessing the power of performance pay, Company B cut labor and taxes as a percentage of revenue by nearly 19 percent, while gross profit climbed by more than 21 percent. And the improvement held. It kept climbing into a second full year after implementation; this wasn't a one-time bump.

Company C is a full-scale HOA maintenance company in the Midwest. They implemented Performance Pay in 2025.

Under the Performance Pay model, Company C cut labor and taxes roughly in half while gross profit jumped nearly 21 points in a single year. That's the fastest turnaround of the three.

What Performance Pay in Lawn Care Means in Dollars

Percentages are easy to skim past, so here's what these stories mean in real money. Each company's gross margin improved by double digits once Performance Pay was fully in place, company A by 13.6 points, Company B by 21.5 points, Company C by 20.6 points. For a company doing $2 to 3 million in revenue, margin gains like that translate to roughly:

Company A: $270,000 to $410,000

Company B: $430,000 to $645,000

Company C: $410,000 to $620,000

Added to the bottom line every year; that's not top-line revenue you have to go find with more marketing spend. It's money that was already coming in the door. It just used to leak out through labor inefficiency. It can go straight to paying off company debt, hiring your first real operations leader, opening a new branch, or finally taking a legitimate owner's draw.

Why Performance Pay Matters Right Now

Every lawn care company is fighting the same labor market. The companies that win aren't the ones paying the most per hour. They're the ones who've built a system where their best performers can out-earn anyone else in town, while the company's margins actually improve. That's not a trade-off. It's the whole point of Performance Pay.

Learn the System

If you want to see exactly how this works, the frameworks, the compensation structures, and the conversations you need to have with your team before you flip the switch, we're covering it in two upcoming events and one past webinar.

Free Webinar: Watch our Performance Pay webinar. Watch now

Performance Pay Round Table, October 22–23, 2026, Belmont, NC. A focused two-day round table for up to 8 lawn care companies serious about implementing performance pay. Seats are limited. Reserve your seat

Harrell's × Lawn Care CEO Business Building Workshop, November 19, 2026, Tampa, FL. We'll cover some of these same principles as part of a broader session on finishing 2026 strong and setting up 2027. Register now

Labor is the biggest lever you have. Performance Pay is how you pull it.