How to Sell Your Landscaping Business for Maximum Value

Landscaping is often a labour of love. Rarely do you find someone in the business who isn’t passionate about all things outdoor spaces, whether it’s identifying hardscaping designs or certain plants used in a garden setting. It’s also an industry that takes considerable time, effort, and dedication. After all, spending warmer months planting and maintaining yards, constructing pathways and retaining walls, installing irrigation systems, and designing outdoor living spaces like patios and decks is no small feat. 

Perhaps you’ve said to your loved ones, “It’s time to sell my landscaping business,” for one reason or another. As this phrase continues to ring in your mind, you’ve likely considered some details on how to sell your landscaping business and potential factors that could impact the process and the next chapter in your life. It’s understandable to feel overwhelmed by it all. Throughout this post, we’ll walk you through some important steps, considerations, and how a business broker can help you achieve a successful sale.

6 Steps to Selling Your Landscaping Business

Selling a landscaping business can be a complex process. There are many factors to consider to minimize pitfalls and ensure maximum value. Here are six steps to take during the sale process, all of which can be aided by the right business broker.

1. Consider Your Exit Strategy

Before you begin the selling process, it’s important to consider your exit strategy. Do you want to exit the landscaping industry completely, or do you want to stay involved in some capacity? This will impact how you structure the sale and the type of buyer you’re looking for. Taking the time to consider your options will help you approach the selling process with clarity and make informed decisions.

2. Get a Business Valuation

The next step is to get a business valuation. This will give you an idea of how much your business is worth and what you can expect to sell it for. A business valuation takes into account factors such as revenue, profitability, assets, and liabilities.

3. Prepare Your Financials

Buyers will want to see your financials, so it’s important to have them organized and up-to-date. These records include your income statement, balance sheet, and cash flow statement. It’s also important to have tax returns, bank statements, and any other relevant financial documents ready to be copied and reviewed. Ensuring that these documents are well-organized and easily accessible will help instill confidence in potential buyers and facilitate a smoother transaction process.

4. Finding a Buyer

Once you have a business valuation and your financials are in order, the next step is to search for potential buyers. There are several ways to do this, and a business broker can guide you through the right process to analyze potential buyers once they show interest.

5. Consider Your Assets

As part of the sale process, you’ll need to consider what assets you’re selling. This includes not only physical assets such as equipment and vehicles but also intellectual property such as trademarks and patents. Consider what you will be keeping from the sale, whether it be sheds or tools that you purchased that may hold personal value.

6. Tie Up Any Loose Ends

Finally, it’s important to tie up any loose ends before closing the sale. This includes settling any outstanding debts or legal disputes, ensuring that all contracts are up-to-date and in good standing, and making sure that all necessary licenses and permits are in order.

What Affects the Value of a Landscaping Business?

As you prepare to sell your landscaping business, you’ll likely consider a few parts of your enterprise that will bring the most value to your sale. While it might be easy for you to come up with a short list, a more comprehensive record can come from an experienced broker. They might ask questions and invite you to look at details that you hadn’t thought of before. From there, your broker might make recommendations to bolster the value of your business before you start to look for a buyer.

• The annual revenue is one of the main factors that affect any business’s value.
• Linked to revenue is profitability, or the ability to generate a healthy profit margin. This will add considerable value compared to a business that is barely breaking even.
• The quality and size of a landscaping business’s customer base can also impact its value. A business with loyal and diverse clients will generally be worth more than one with a small and unstable clientele.
• A business with a strong reputation for high-quality work and excellent customer service will always have considerable value.
• Competition can be healthy when running your landscaping business, but in general, a business that has a stronger market position and faces less competition is more appealing to buyers.
• When did you last update your equipment, vehicles, or storage? These can all affect how your business is valued, with new technology and increased efficiency being increasingly important.

What Decreases the Value of a Landscaping Business?

There are details that will need to be reviewed to ensure that the price you are expecting for the sale of your landscaping business is what you get for it. With that said, there are certain factors that decrease the value. These could be fixed within a reasonable amount of time before the sale, but other factors could take longer to improve.

• Outdated equipment and technology: If your business is using older models of equipment that are less efficient than newer ones, a buyer will take that into consideration. Buyers will typically be interested in a business that has modern and efficient equipment and technology. Luckily, this issue can typically be resolved in a short period of time by purchasing newer equipment.
• Dependence on one or a few clients: Even with the loyal clients your landscape business has, the fewer of them, the less attractive it could be to a buyer. If they were to take over and lose a key client, it could significantly impact the business’s financial performance. Consider expanding your client base or service areas to account for more commercial and residential opportunities before selling.
• Lack of contract diversification: While installations and new projects are great for showcasing your company’s skills, maintenance contracts tend to be more appealing to buyers because they are long-term and bring in steadier revenue. Diversifying your services or starting new strategies to focus on ongoing work (like a featured maintenance package for new clients) can help increase value.
• Poor financial performance: The past few years have seen a lot of ups and downs for businesses of all kinds. If your financials say you aren’t generating sufficient revenue or profits, buyers may sway toward a company with a stronger financial track record. Taking a comprehensive look at what you could do differently over time can help with the overall financial value of your business.
• Poor reputation: Have a couple of bad reviews on Google? Maybe your social media includes some unhappy complaints about customer service. These red flags decrease the value of your landscaping business, no matter the circumstances. It’s also worth noting to resolve any legal or regulatory issues before putting your business up for sale. In any case, it can take time to improve your reputation enough to make a significant impact.

Should I Sell to a Competitor?

Spending years competing with a fellow landscaping business owner might leave you hardened by the idea of selling to them. Perhaps you don’t agree with their practices, or they took some of your best employees during a seasonal change. In any case, selling to a competitor is a personal decision. A good business broker will be able to inform you of the big picture, that is, if your company would be a good fit in their hands and if they have the means to run it efficiently. 

Selling to a competitor can sometimes be a good thing. They certainly demonstrate their ability to run a successful enterprise and are in the same markets as you, meaning your clients wouldn’t experience as much disruption where they might turn their business elsewhere. You might also consider selling to someone who offers similar services but is looking to round out their offerings. If your business focuses on softscaping and yard maintenance, it could interest a hardscaping company looking to expand its client base.

When Should I Sell My Landscaping Business?

Determining the right “time” to sell your landscaping business can be personal or seasonal. From a personal perspective, you might consider:

• Your financial health
• Current market trends
• Any current business goals you have

If you are interested in pursuing anything further with your landscaping company, take the time to achieve what you want to achieve before putting it on the market. That way, you’ll feel even more settled in your decision.

From a seasonal standpoint, many consider the offseason between late fall and early spring an ideal time to sell. Primarily, the weather is too cold for many outdoor projects. This can give you the time to prepare the business for sale, such as organizing financial records, updating equipment, and training employees, without disrupting day-to-day operations. It can also be an appealing time for buyers with more time to focus on purchasing a business. However, business sales are often a months-long process. With the advice of a knowledgeable business broker, they may recommend putting your landscaping company up for sale in the summer months, so you can begin to finalize a deal in the offseason.

Where Can I Sell My Business?

Once you’ve decided, “I’m ready to sell my landscaping business,” you might think the process will proceed rather quickly. In reality, finding the right buyer for a company like yours can take time. There are a few places you can turn to to help improve the chances of getting your business in front of qualified buyers, but marketing efforts and advertising can cause significant strain on your already busy schedule. 

When you work with a business broker, they can determine the best place to sell your landscaping enterprise. That be through ads in relevant publications, outreach to known professionals they think might be interested, or networking with other industry professionals to determine the potential market. In any case, they can also maintain your confidentiality as needed throughout the process to ensure the sale proceeds smoothly without any unnecessary damage to your business.

Should I Use a Broker?

When considering how to sell your landscaping business, contacting a business broker is never a bad idea. It can be challenging to part with a company you’ve worked hard to build up and establish, and navigating business deals can take time and effort you may not have while continuing to run your enterprise. That’s where a business broker can help take the weight off of your shoulders and ensure a successful deal.

When you choose to work with one of these professionals, like our team at Sunbelt Canada, you’ll gain access to expert insights, a large system of buyers, and peace of mind that the sale of your landscaping business will be confidential and comprehensive. Our valuations look at all aspects of your company and remain objective to ensure you get the best financial return to carry you into your next chapter. Ready to get started? Reach out to us to learn more about our process.