Preparing to sell your lawn care business: A guide for owners

Selling a lawn care business or any business is a significant milestone that requires careful planning and strategic execution. As a business owner, you have invested your proverbial “blood, sweat and tears” into building a business that you can be proud of and you want to ensure that you are appropriately presenting the culmination of that work in your sales approach. Below are the key steps that an owner should consider before putting their business on the market.

1. Evaluate the Business’s Financial Health

Before listing the business for sale, you must assess its financial standing. Buyers will scrutinize financial records to determine profitability and future potential. Buyers will require QoE (Quality of Earnings) analysis to ensure financial records presented match actual performance.

Key actions to prepare include:

• Organizing financial statements (balance sheets, profit-and-loss statements, cash flow records) for at least the last three years.
• Ensuring tax filings are up-to-date and accurate.
• Identifying any outstanding debts or liabilities and strategizing ways to settle them.
• Calculating EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to provide clarity on earnings.

2. Determine the Business’s Market Value

Knowing the true worth of the lawn care business will help set a realistic asking price and attract serious buyers. While you may have an ideal sales price in mind, that sales price needs to be grounded in metrics that can be analyzed and independently assessed. Markets shift and buyers are discerning. Buyers will take a fine-tooth comb to the financial performance of the business, and you must be prepared for this. Ask yourself, “If I was on the other side of the table, why would I want to buy my business?”

Methods of valuation include:

• Using industry-standard valuation formulas, such as a multiple of annual revenue, EBITDA or net profit.
• Hiring a business appraiser to conduct a professional valuation.
• Comparing recent sales of similar businesses in the region or general industry
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3. Assess Operational Systems

The better your operations, the greater the potential for a higher premium to be had. A lawn care business with streamlined operations will be more attractive to buyers. The most important element is to ensure that you can speak to the tools, systems and processes that allow your business to achieve the objectives you set out. The best way to do so is to memorialize operations through strong documentation.

Sellers should:

• Ensure standardized procedures for scheduling, customer management and service delivery.
• Have contracts in place with employees and suppliers to avoid service disruptions post-sale.
• Upgrade equipment if necessary and ensure all assets are well-maintained. If not, identify and document what type of capital expenditures are required to update.
• Understand your risk: resolve pending litigation, work to close or disclose employment issues and identify potential risks to general operations.

4. Showcase your Customer Base and Reputation

Buyers will be interested in a business with a loyal customer base, positive brand reputation and a history of growth.

Key items to showcase are:

• Retention Rates / Cancel Rates — What percentage of customers do you renew?
• New Sales — How well can the business attract new customers?
• Marketing efforts — What efforts have been taken today and what are areas you might have invested in if you had more time, capital or other resources? What has worked, what’s untapped and what could scale?
• Reviews & Customer Net Promoter Score — What are your customers saying? Do you have a process to survey those customers and capture sentiment on the quality of your work?
• If possible, show total addressable market (TAM) within the areas you operate — Leverage independent data brokers to assist in providing this data. This provides a sense of the opportunity for growth within the markets you operate.

5. Develop a Transition Plan for the Buyer

Potential buyers will appreciate your perspective specific to a transition strategy that helps them seamlessly take over operations. Not all buyers are the same; some prefer the owner/operator to remain engaged, some may want a clean break to allow for new management to insert their approach, while others may prefer some form of hybrid. As an owner, it’s important you come to the table with your desired approach but be willing to flex based on what is best for you, your employees and your business.

A well-prepared transition plan should include:

• Training sessions for the new ownership group to familiarize them with business operations.
• A guide to company processes, including billing, employee management and client relations.
• Assistance in transferring business licenses, insurance and vendor agreements.

6. Prepare to Market the Business to Potential Buyers

Once the business is ready for sale, the owner must create a compelling sales pitch and reach prospective buyers. While it is possible to sell your business yourself, quite often, sellers will engage third party firms (brokers) to represent them in the sale. This is an effective mechanism as these firms specialize in presenting businesses, have relationships with buyers and can negotiate on your behalf to remove the emotion from the sale.

The broker will typically:

• List your business on platforms specializing in commercial sales.
• Network within industry circles to find interested buyers.
• Prepare a professional prospectus with financial data, business history and competitive advantages.

7. Negotiate and Close the Sale

When offers start coming in, the owner must be prepared to negotiate favorable terms and finalize the transaction legally. Important steps include:

• Reviewing offers and negotiating or working with advisors (broker/attorney) to achieve the best possible price.
• Collaborating with attorneys to ensure legal compliance in the sale process.
• Finalizing the deal with a signed purchase agreement, including provisions for asset transfer and transition support.

Summary

Selling a business is an emotional moment. It’s often a one-time shot for most business owners, so it is critical that you put your best foot forward in the sales process. By keeping the concepts above in mind, you can simplify the process and improve your chances of a successful sale. Like most things in life, the process requires work, but the outcome can be a life-changing experience.

John Moehn, president, and Adam Riff, chief marketing officer, of ExperiGreen contributed to this article.