How to Make Your Business Saleable
Owning and running any successful business starts with the effort you are willing to put into it every day. You’ve got to have a mission, vision & values, be organized, learn how to delegate, use proper equipment and have a great team at your side. Once you understand those key points, you’ll have a successful landscaping business.
But what does it take to make the business profitable and saleable?
You’re going to want to retire one day and there’s really only one way to do that – build a business that is saleable. And in order to build a business that is saleable, you’ve got to first start by making the business profitable.
Here’s 3 things you can do right now to make your business profitable:
- Take advantage of the 1% Profit First Challenge. This challenge starts you off by having you put 1% away in a Profit account.
- Buy equipment that can replace labor. If you are running a 3 or 4 person landscape install crew with no equipment, consider purchasing a Vermeer mini-skid or Toro Dingo to replace that extra manpower. Two man teams (when applicable) will always be more profitable.
- Stop buying stupid shit! Look at where you are spending the bulk of the money by printing out a P&L statement and looking at your expenses. When you do this you should be able to see rather quickly where you are leaking money. Do the same with credit card statements.
Once you’ve set your business up for profitability, you’ll be able to start working on what you need to in order to make it saleable.
Since the word “saleable” is such a broad term, let’s look it from a buyer perspective instead of an owner perspective.
Steps to Making a Business Saleable
Proper preparation is the key to successfully sale your lawn care and landscape business. By taking the time to properly prepare your business for sale, you are making the transaction more financially lucrative for the buyer.
Here are the initial steps a business owner should take in order to make sure their lawn care and landscape business is ready to be sold:
- Review the Business Assets – does the sell of the business come come with any assets? When selling a business, this is always the #1 thing a buyer looks for in order to make a final decision on whether or not to buy the business. So make it clear up front if there are or are not any assets.
- Access to Client Lists – do you have your “active” customers list separate from your lifetime customers list? This will be important for the buyer to see, as they are going to want to review customer retention.
- Residential vs Commercial – what has each customer brought in annually in sales? If you offer both residential and commercial services, it will be essential to break these two apart and show the buyer annual income for each side of the business.
- List of Services – what are the list of services for the business? Lawn maintenance, landscape installs, yard clean-ups etc.? Re-occurring revenue makes a business worth more, so list all of your services and show the annual income for each.
- Social Media Marketing – does your business have a social following? You can’t run a business without a strong social following these days and the buyer will be looking for this information.
- Email Marketing – are customer emails being collected? Email is also a HUGE part of marketing, so if the business is utilizing a customer list for a monthly newsletter, make sure the buyer is aware.
- Software Used – does the business utilize an industry specific software? Or, is everything written down on paper? It’s good to note here that if you are running off paper you may want to consider stepping into the digital age before you start the selling process.
- Profitability – has the business been profitable over the past 2-3 years? A quick way for the buyer to review this information is by providing them with tax returns. If a business is not profitable, it is going to be hard to sell.
- Office Space and/or Land/Property – does the sale of the business come with an office space and/or land/property? If the property is leased instead of owned this could affect the sale or value of the offer.
- Business Name – is the business name being sold with the business/property? Most buyers are going to want the rights to the name of the business since it is established in your local area. If this is not a part of the deal, then the buyer needs to be made aware of that from the beginning.
- Owner Connection – will the transaction come with any assistance from the owner? Sometimes you can sweeten the deal of the sell by offering to stay involved to make the transition of power run smoother. Just make sure you set a firm cut off date and stick to it (or ask for payment beyond the cut off date for continued support).
While building a successful lawn care and landscaping business is an amazing accomplishment, there will come a time when you want to sell the business and enjoy the next chapter of your life. That’s why it’s so important to always be prepared for the sale by staying on top of the steps above. When you are prepared for the sale, it will make it easier for you to let go and and leave your business in the hands of someone who will make you proud.
A Final Word From Adam
With over 29 years of experience owning and managing a successful landscape company and as an industry leader, here’s a few final tips for success:
- Join a professional association like NALP or Landscape Ontario.
- Hire a business consultant/mentor.
- Know your numbers and understand your financials.
- Find a hobby you enjoy and make time for it.
- Always make uninterrupted time for family.
For more advice like this, join the Profit First for Landscapers Facebook group – a group of like minded people just like you looking to make a profit in their business and put a stop to entrepreneurial poverty in the green industry.