How to Position Your Landscaping Business for Sale

By Brian Bond

Selling your landscaping business is a complex and stressful process. However, there are some steps you can take to make the process easier and ensure that potential buyers are valuing your business properly.

Financials in order

A landscaping company that is serious about selling the business will always have its books in order. Your records should consist of clean and accurate profit and loss statements, balance sheets and corresponding tax returns. Having these basic financials is essential and extremely helpful to all parties involved.

Make sure your accounts are set up to be billed on the first of the month and before services are provided. If you can put clientele on auto pay, that is a plus as well.

A landscaping company that has its books in order will receive a more accurate evaluation, and ultimately lead to better offers when it comes time to sell.

Maintain employees

If you are selling your landscaping business, it is important that you have an operation with staff in place that allows the new owner to manage the business – not operate it. Buyers of a landscaping businesses do not want to be out in the field mowing lawns or blowing leaves.

Maintaining the staff necessary to allow the new owner to successfully grow the business, while simultaneously keeping the current clientele happy, is a key consideration when selling a landscaping business.

Diversify your accounts

It is important to have a variation of different clientele. A wide array of accounts is a signal of a secure business to a prospective buyer. For example, having 100 accounts from 100 different clients shows more security than having one account from a property management company with 100 properties.

A lack of diversity in your accounts means a perspective buyer is in trouble if they lose that account.

Maintain your equipment

No one wants to purchase a business that is lacking in operational equipment. Maintaining a high-quality business while you position a sale is key to getting the proper value for your business.

Make sure all equipment is in working order. A buyer will decrease their offer if they know they are going to have to inject thousands of dollars in repairs on day one.

If something is broken, make sure it is fixed before you show your business. You don’t need to invest money in expensive upgrades – you just need to ensure that you are conducting basic maintenance.

Created an ideal account radius

The ideal landscaping business will have a client radius of three to four miles. This means that all the accounts you service do not require extensive travel from one client to the next. A large account radius means more money spent on travel, and not enough time completing jobs.

A tight route is paramount when selling your landscaping business.

Keep your customers happy

A landscaping business with happy clientele is more likely to be sold. While you are positioning your business, make sure your current clients are still happy with your work. It is important to have a plethora of good online reviews on Google or Yelp.

A potential buyer can easily gauge the perception of your business; and a business with negative reviews is not going to be appealing.

If you are dealing with negative online reviews, then make an effort to fix the problem. Improve on your customer service, and encourage happy customers to leave a review online.

Manage expectations

In my experience, many landscape companies overvalue their business, which leads to some pretty hard lessons about the realities of selling. Manage your expectations during the selling process by understanding that no landscaping business is the same. If you know another owner who sold his/her business for a certain amount, it does not automatically mean you will get the same value.

A great way to manage expectations is to speak with your business broker and set up a plan that factors in an honest evaluation of your business. Set up a range of offers you would be willing to accept that match that evaluation.

Managing your expectations with your broker will make it easier for you to navigate through the difficult process of selling your business.

Know the next step

Why are you selling your business? What do you plan to do with the money? These questions are something you should know before you sell a piece of your livelihood.

What is your exit strategy? Are you going to take the money and start a new venture, or set off into the sunset and retire?

I would recommend speaking with your financial advisor and creating a plan that maps out what you plan to do after you sell your business.

Selling your landscaping business can be a difficult process, but following these steps will allow you to move forward with a better understanding of what to expect.

Brian Bond, CBB, is the principal of Strategic Business Brokers Group, a brokerage firm in Scottsdale, Ariz., that has helped landscaping companies sell their businesses across Arizona. Bond has been named “Broker Of The Year” by the Arizona Business Broker Association, and has also received several awards year after year for the highest number of businesses sold. For more information, visit https://www.businessbrokerphoenixaz.com