Mike Michalowicz's Profit First works for a landscaping business once you decide your winter pay in March. Part of every peak-season deposit goes to a winter reserve inside the split. When the reserve hits the number you set, it stops filling, and from December on it tops your owner pay back up each month.
On onboarding calls with seasonal owners, I see the same setup again and again: one checking account, checks deposited at the local bank, taxes and payroll paid out as they come due. An irrigation owner I spoke with already had a reserve. What they didn't have was a way to fill it or get money back out, because their owner pay was "whatever's left over." Let's say you run a lawn company where that's $1,486 off a $14,860 July week. Off a $4,915 January week, after payroll, it's nothing.
Why does Profit First break in December?
Profit First breaks in December because owner pay follows the deposits, and the deposits fall off a cliff. Go back to that lawn company. Out of a $14,860 July week, the hourly crew takes $7,342, and fuel, the truck and the tax set-aside take another $6,032. The $1,486 that's left is your pay, and in July that's a real paycheck.
Then January comes. Out of a $4,915 week, the smaller crew takes $2,980, and the insurance and truck payment take the other $1,935. A lawn and landscape owner we work with puts their year at about $15,000 a week from March through November and about $5,000 the rest of the time. That's the same business with a third of the money coming in.
So owner pay breaks in one of two ways. The first is owner pay as whatever's left over, which in winter is nothing.
The second is the straight percentage the book teaches. 10% of $14,860 is $1,486, and 10% of $4,915 is $491.50. The percentage stays the same, and the paycheck shrinks with the deposit.
What I tell seasonal owners is to pull the extra from summer into one place, then pay it back out across the year so it evens out. You're doing the same exact thing you'd do with any other bill, setting the money aside before it's due.
Where does the winter reserve sit in the split?
The winter reserve sits inside the split as one more account, next to the four the book already gives you. Before anything splits, though, some of what lands was never yours. Say you bill a client for the plants, mulch and irrigation parts on a specific install, or for a sub's share of the job. That money passes straight through. Mike Michalowicz calls what's left after it Real Revenue, and when materials and subs are a big part of what you bill, that's the number the split runs on. The contractors guide covers job materials and how to keep them out of the split.
Real Revenue then splits five ways: taxes, profit, owner pay, operating expenses, and a winter reserve.
Taxes gets the percentage your accountant gives you.
Profit is the book's profit account, which you leave alone and take a share out of each quarter.
Owner pay gets your peak-season share, the money you live on from March through November.
Operating expenses pays the crew, the fuel, the equipment, and the insurance. Payroll comes out of this account, after the split.
The winter reserve is a separate account with its own account and routing number. In peak season, part of what would have gone to owner pay and operating expenses goes here instead.
Nothing gets funded ahead of the split, because the reserve is just one more share of it.
Now, behind the scenes. Most landscapers I talk to get paid by check. One snow-and-lawn owner I set up takes about 90% of their income that way. You don't have to change that. Keep depositing checks at your current bank. A rule pulls that money into a feature called an income source: an account inside Sequence with its own account and routing number. The split runs the moment money lands there. Pulls from another bank into Sequence take 2 to 3 business days, so the split runs a few days after you deposit.
How do you fill the reserve to a number and let it stop?
You fill the reserve to a number with a rule that checks its balance every time a deposit lands. The irrigation owner I mentioned built theirs around $50,000. Each deposit triggers the rule, and the rule asks one question: is the reserve under $50,000? If it is, the split sends a share to the reserve and 10% to owner pay. If it isn't, the reserve gets nothing, and that share goes to owner pay instead. That's two branches, and the reserve's share moves to you the day the reserve is full.
Let's put that on the lawn company. Say the reserve takes 15% while it's filling. That's $2,229 off a $14,860 July week. Don't do the math on every week. The point is that at that pace the reserve hits $50,000 somewhere in August, and from then on the $2,229 lands in owner pay. Your late-summer paychecks get bigger at exactly the point you've stopped needing to save. For this lawn company, the owner pay top-ups below come to about $16,500 across a three-month winter, so $50,000 leaves room for payroll and a slow March. Your number comes from your own winter, and the FAQ walks through it.
So you might ask, "Why not just move whatever's left into savings in November?" I'll tell you why. A, by November most of it is spent. When everything sits in one checking account, July money gets used on July things. B, you don't know when you've saved enough. The rule answers that for you: the reserve stops at the number you picked, end of story.
If a big share up front feels like too much, build it slowly. That same snow-and-lawn owner tops their emergency fund up to $10,000, with no more than $2,000 moving in any one transfer. Their peak weeks run around $25,000, so the fund fills over a few deposits without draining one of them.
How do you pay yourself and the crew through winter?
You pay yourself and the crew through winter by drawing on the reserve for owner pay and crew pay, and by letting snow income cover part of the gap if you plow. Winter also costs less to run. The crew is smaller, the mowers sit, and fuel drops, so the reserve covers a lighter season than July.
Seasonal owners fill a reserve like the one above, and I've watched that side run for whole seasons. The winter half below is how I'd set it up and how I walk owners through it, so watch the first month of it closely.
Owner pay tops up from the reserve
Owner pay tops up from the reserve on a schedule. Pick the paycheck you want through winter. Let's say $3,250 on the 1st and the 15th. A scheduled top-up runs on those dates and fills owner pay to $3,250, pulling from the reserve. Once the reserve starts paying out, it drops under $50,000, so winter deposits go back to the first branch. A $4,915 December week puts $491.50 in owner pay and $737.25 back into the reserve, and the top-up only pulls the other $2,758.50. That small share flowing back in just slows how fast the reserve empties. On smaller months it pulls more, and on bigger months it pulls less. Either way, owner pay holds $3,250 on payday, and the next step in the rule sends it to your personal account by same-day ACH.
Crew pay draws on operating expenses first
Crew pay comes out of operating expenses, the same as in July. The winter deposits still split, so operating expenses keeps getting its share. Before each payroll, a second top-up fills operating expenses to the payroll amount from the reserve. Say your skeleton crew runs $2,980 a pay period. If you lay the crew off for the winter, skip this top-up. Hourly crews never come in at the same number twice, so set the target a little above what you expect. Whatever's extra in March gets swept back into the reserve or into profit.
If you plow snow, the reserve covers less
If you plow snow, snow income does part of the reserve's job. Point it at its own income source so it runs the same split as your lawn money. Every snow deposit then puts something into owner pay and operating expenses before the top-ups run, so the top-ups pull less from the reserve. If snow and lawn are two separate businesses, give each one its own income source, so each business's split stays its own.
What does the full setup look like for one lawn company?
The full setup for the lawn company is five rules, run in this order. The numbers are illustrative, so set your own with your accountant.
# | When it runs | Condition | What moves |
|---|---|---|---|
1 | On a schedule you pick (weekly is common) | Checks deposited at your current bank | The balance moves into the income source |
2 | Every deposit into the income source | Winter reserve under $50,000 | Taxes and profit at your percentages, 10% to owner pay, 15% to the winter reserve, the rest to operating expenses |
3 | Every deposit into the income source | Winter reserve at $50,000 or more | Taxes and profit at your percentages, 25% to owner pay, the rest to operating expenses |
4 | The 1st and the 15th, December to February | Owner pay under $3,250 | Top owner pay up to $3,250 from the winter reserve, then send $3,250 to your personal account |
5 | Before each payroll, December to February | Operating expenses under $2,980 | Top operating expenses up to $2,980 from the winter reserve |
Rules 2 and 3 are the two branches of one split. Rules 4 and 5 sit idle from March to November, and moves between your Sequence accounts are instant, so the top-ups land the day they run.
Where to start
Start with the split and the reserve in spring, and leave the winter top-ups for the fall. What I always recommend is to watch the first few deposits flow through before you trust it. Owners usually send too much to one account at first, and the percentages get tuned after a cycle or two. You can change any rule whenever you want.
If you'd rather sign off first, you can require approval before anything moves, and every transfer shows up in the activity record. Set the reserve number with your accountant before March, and you'll know in July what January looks like.
If you want a second pair of eyes on your winter plan, our team can map it with you.
FAQ
Does Profit First work for seasonal businesses?
Profit First works for seasonal businesses when the split includes a reserve that fills in peak season and pays back out in the slow months. The percentages alone shrink with the deposits, so a winter week pays a winter-sized paycheck.
How much should a landscaper keep in reserve?
A landscaper's reserve depends on winter costs and winter income. Add up what owner pay and operating expenses need each winter month, multiply by the months you're slow, and subtract any winter income, like snow. Then have your accountant check the number before you set it as your cap.
Should I pay myself in winter?
Yes. A steady winter paycheck from the reserve keeps you out of the business account for personal bills. Set the amount once, and the top-up fills owner pay to it on the dates you pick.
Can I keep depositing checks at my bank?
Yes. Checks keep going into the bank you use today, and a rule pulls the money into your income source on a schedule. Pulls from another bank into Sequence take 2 to 3 business days.
What if I also do snow removal in winter?
Snow removal income goes to its own income source and runs the same split as your lawn income. That puts money into owner pay and operating expenses all winter, so the reserve covers less of the gap.
Is there a Profit First book for landscapers?
Yes. Profit First for Lawn Care and Landscape Businesses by Christeen Era came out in 2021 and applies Profit First to lawn care and landscape companies. This post covers how to automate the split and the winter reserve once you've picked your percentages.