Veterans and pros offer their advice for selling your company.
So you want to sell your business. Exit. Cash in.
It’s a hard decision to make, but once you’re ready, take a look a these tips from veteran landscapers who have been there and done that. They don’t have all the answers, but their counsel can take a load off your worried mind.
“I think that far and away the biggest thing to remember, is that the person who is buying the company is trying to do so based on futures,” says Kris Ashby, owner of Elite Landscaping in Pleasant Grove, Utah. “Any seller is trying to sell based on its past, at the end of the day. When you understand the motives behind the reason for the sale, it helps in that critical negotiation process and in the pricing as well. Any entrepreneur worth their weight in salt is looking at potential – that is the biggest thing in pricing.”
Ashby says he sold his first company in 1999 and “didn’t even know” the buyer prior to the deal.
“They (cold called) and asked if they could buy my company because they were expanding into maintenance,” Ashby says. “We had many meetings over the course of this (courtship) and after listening to his story over one month period – probably four-to-six meetings – it seemed like there was enough stability there for me to seriously consider it.”
In the end, Ashby sold. Stability was his biggest concern because of his existing customer base. “You never want to leave the people who trust you in the hands of someone you’re not comfortable with because the odds are good you’ll work in that market again.”
When Ashby decided they were stable and not just out for an old-fashioned “killing of the competition,” he contacted his attorney and started negotiations in earnest. Contracts, after all, come second only to an initial comfort level with the buying and selling parties.
“What we look for when we’re looking at acquisition opportunities of companies, there’s a lot of that similar philosophy of business,” says Dean Burhoe, principal and COO of Connecticut-based Burhoe Landscaping & Yard Service – now part of the Yard Group.
“What it comes down to is that business and service quality, along with comparative geographic pricing structures that are in line with continuity,” Burhoe says. “People who are dedicated to work, and have a ‘no problem’ attitude can offer any customer base a good flow and transition.
“Naturally, you want an attorney involved to walk you through all the ins and outs of any contract that is proposed, but before you even get there, there has to be management integrity, an ideally solid track record and brand name recognition.
“There are a lot of fly-by-night contractors who have a truck with a sticker on the side that calls him a landscaper,” Burhoe laughs. “It takes a higher caliber person to hand your business off to – or expects someone to do likewise – where there’s so much at stake. In that sense, it’s all about people.”
The author is a freelance writer based in Cleveland.