This checklist outlines the most important variables that impact business value specific to landscaping and lawn care companies. Groom your business to achieve maximum value before putting it up for sale.

 

Staff

 

Build a management team:  A business is more valuable if the owner is not the landscaper, the mower, the weeder, or the sidewalk edger.  If you have management and supervisory staff in place overseeing the crews, your business will be more valuable and much easier to sell. Don't be an owner-driven operation. Build your business so anyone can run it. The more important you are to your business, the less your business will be worth. Additionally, building your company so anyone can run it vastly opens up the universe of buyers that can purchase the business.

 

Document your workers:  Some buyers, whether individuals or other companies, may be OK with undocumented workers, others may not. You are in the best position if you can document all of your workers.

 

Improve retention of employees:  Focus on developing programs that will foster long-term retention of your employees. Finding and keeping a steady workforce is a perennial problem in the industry. Your business will stick out in the crowd if you have a stable team.

 

Customers

 

Sign contracts with your client base:  Yes, it is a hurdle, but it is worth the effort. Recurring, predictable revenue is the holy grail of revenue streams. Buyers love a steady customer base, especially if you have long-term contracts. Check with your attorney to ensure contracts are transferable to the buyer in the event of a sale. 

 

Clean up your accounts receivable:  Having too much cash tied up in A/R is a drag on the company's growth. The longer the cash-flow cycle of your company, the more working capital a buyer must tie up in the business. You may want to talk with your late-paying customers, train them to pay on time or pre-bill them.  Pre-billing is ideal and increases the valuation of your company. Try to get as much of your client base as possible on pre-billed arrangements.

 

Build your commercial base:  Landscaping contractors that focus on commercial work have much more value to buyers than those that primarily focus on residential business. However, commercial entities try to negotiate lower prices, which will cut into your profits.  Watch your margins.

 

Brand

 

Your unique brand is important because it translates to how your business is perceived by your target market.  What unique attributes do customers and prospects associate with your business? A brand typically includes two elements: sensory elements - which include your company name, logo, colors, and other graphic or text elements, and intangible expectations - which are the perceptions associated with a product or service that arise and reside in the minds of everyone who comes in contact with your business.  Do your vehicles have your logo on them?  Are your crews uniformed?  Does the staff have a code of conduct?   Define and communicate a brand message that influences how you and your firm are perceived. Without a clear brand message, your target market will make their own assumptions about who you are, what you offer, and what your business represents.  What unique value do you provide for your customers?   Maybe personalized solutions?  Or something you do better than anyone else, especially your closest competitors.  Maybe it’s faster or more responsive customer service; maybe it’s low prices and no hassle set up. Your unique brand should be integrated and broadcast in all your marketing communications as a means to guide people’s decisions to do business with you.

 

Operations

 

Focus on landscape maintenance and other repeat services:  Lawn care and landscape maintenance companies receive higher valuation than construction-related landscaping businesses.

 

Fleet and Equipment Maintenance Schedule:  A daily maintenance routine for your crews going out in the morning and coming back at the end of the day will make buyers feel more confident that they will not inherit a backlog of maintenance problems or equipment costs.  The price goes down in the buyer's eyes while s/he's calculating what it would cost to bring the fleet up to date and to replace/repair equipment.  Keep your vehicles and equipment in tip top shape.  You will be in a better negotiating position.

 

Build dense routes:  Dense routes minimize fuel, labor and other expenses, which indicates efficiency and competency in utilizing your workforce to it full capacity. 

 

Seasonality:  Develop other services to mitigate the impact of seasonality.

 

Streamline your operations and document procedures.  This exercise is like creating a how-to instruction manual that will teach the buyer how to run your business, which provides a smoother transition for a buyer.

 

Utilize Technology:  Talk about the holy grail!  Online operations are becoming a must these days. For good reason.  Management software programs are becoming the de facto operations manual. You can boost field service efficiency in scheduling and routing, GPS crew tracking and timesheets, handle quotes, manage customer data, manage billing, and more....on your laptop or ipad....wherever you go.

 

*In a  2015 survey by the National Association of Landscape Professionals (NALP) it was found that 90% of American homeowners with a yard think it is important to have their yard well-maintained, many of which seek help from professionals.  https://www.landscapeprofessionals.org/nalp/nalp/media/2015-press-releases/professional-landscaping-enhances-yards.aspx