If I sell, will I have enough net proceeds (after taxes, after paying off debt and other obligations, etc.) to do the things I want to do? What other deal terms might affect me? How do I know if what I have heard is realistic for my company? These are important questions for most business owners – and especially personal to those who have spent their lives building their business.

Business valuation is far from an exact science. In most cases, the market (the buyer) determines what something is worth. The exception is having a business valued for an ESOP, a divorce or other special cases where specific formulas must be used. These may be legally required and vary by state. If the business is going to be for sale on the open market, will it be an asset or a stock sale? Which assets will be included? There may be several “correct” answers for one company.

To get a value for your business, let’s look at it from the buyer’s perspective. There are multiple methods and formulas that are used to value a landscaping business, each with its pros and cons. The most common are:

• Multiple of reconstructed EBITDA adding back discretionary items and excess owner’s compensation. Downside: Based on three- to five-year historical results which may not reflect future, limited private company transaction data, capital expenses not included.
• Present value of future cash flows discounted for risk and liquidity. Downside: Based on the accuracy of assumptions for forecast. Use of an “appropriate” discount rate.
• Percentage of sales (multiple or fraction of). Downside: Limited insight into company’s operations, lack of comparable data from private companies.

Which is right? The right formula is the one the buyer thinks is right and the seller is willing to accept. Your adviser will apply at least two methods and check the value range to see if it makes sense. A good “reasonableness check” is to project the business’ cash flows with the debt service and other obligations added in. It is doubtful a buyer would want to go beyond the business’ cash flow to service the debt.

The range of multiples in the general marketplace* are listed above. Companies with an enterprise value of greater than $5 million or more are in greatest demand. This is consistent within the industry.

Sellers wanting unjustifiable high prices contribute to the statistic that over 48 percent of small businesses are not sold.** A seller with an unrealistic view of his company’s sale price is a person who never sells his business.

Your adviser will work with you based on knowledge of your business, the industry and the marketplace to give you a business valuation. This is often an opportunity to identify strengths and weaknesses from the buyer’s perspective that may result in an action plan to improve the value.

Contact Alison Hoffman at harvest@giemedia.com

When Pam Dooley first started the process of a rebrand in 2016, she simply wanted to redesign her website. Its outdated appearance made navigating the site an exercise in patience. But after a few conversations with some experts, she realized her company’s problems were rooted deeper than just the website.

“They were like, ‘Who are you?’ and I said, ‘What do you mean, ‘Who are we?’” Dooley says. “They made me realize that the website was the very end of the process. There was no way that we could develop any website that connected with people that we want to attract without knowing who we were.”

Dooley says prior to the rebrand, her company – Plants Creative Landscapes, based in Decatur, Georgia – was stagnating. It started in 2005 and just hit a wall a decade later.

“We were at the 10-year mark, and I did not believe that our current identity was attracting those employees and customers that we wanted to serve,” she says.

The rebranding process took several years. Dooley says the company saw its top line blossom by 42 percent in two years and its bottom line also steadily rise over several years. Even now, Dooley says the company’s top line revenue of $5.2 million should jump to $5.5 million in 2020. Growth is still happening at the remodeled Plants Creative.

But the rebranding process wasn’t just changing the company logo and slapping it on all their trucks. It took a deliberate, step-by-step process to develop a strategy they still use today.

Knowing when it’s time.

At Compass Creative, which Dooley worked with on the rebrand, creative director Diego Lopez says many companies think their websites are good enough because they generate new client leads. But Lopez and the rest of the Compass team usually turn around and ask if the company’s website generates leads from clients they aspire to serve.

Typically, the answer’s no. That’s where a rebrand can help.

“Not a lot of landscapers know how to communicate what makes them different than the next guy,” Lopez says.

He says companies should determine their short- and long-term goals, and how they believe their website will help them achieve those goals. There should also be time spent evaluating the company’s identity and whether its logo and brand are consistent across all assets like trucks, fliers, social media and on the website.

Lopez says Compass often spends three or four weeks with a client getting to know them, though that might not be an industry precedent. He also adds that Compass dives into the client’s company culture and creates a full marketing analysis.

Based on that initial phase of brand discovery, Compass makes recommendations from there. Lopez says that largely, there are three types of clients: those who adopt any suggestions; those who are skeptical but can be swayed; and those who are unwilling to make any changes at all. It’s the latter type of clients that Lopez says are most difficult to deal with, though some form of skepticism is expected. For any consulting company to come out and spend time evaluating a company, it costs that company money. Compass, for instance, charges $5,000 for this initial discovery process alone.

“(People say), ‘I’m paying you for you to get to know me? That’s kind of weird. But in retrospect, companies see this as one of the most valuable pieces,” Lopez says. “You start by not prescribing solutions, but by diagnosing what the problems might be.”

For the rebrand to work, Dooley had to do her with doing her homework – she had to identify companies that she felt aligned closely with the kind of business she wanted Plants Creative to be. She came back with Southwest Airlines and Starbucks, which Dooley says emphasize charity work and community involvement. She says anybody looking to hire a consulting company should find someone who will keep you just as accountable and force you to consider your company’s mission.

“It was so much more than just marketing or branding – they were really encouraging us to go deep,” she says. “They became really, really thoughtful, strategic partners.”

The big reveal.

When Dooley first looked at a redesigned logo two months into the rebranding process, she didn’t really care for it.

In the big branding reveal meeting, Compass team members showed Dooley what seemed like hundreds of logo variations. They had taken parts of logos and colors from other companies she liked and showed how they transitioned from those mockups to the final Plants Creative emblem. She told herself to simmer on it, giving it time to grow on her.

Ultimately, Lopez says the new logo embodied more of what Plants Creative stood for. The original company logo included a harsh neon green and burnt orange color scheme that didn’t quite capture the warm, welcoming feeling Dooley had said she wanted her company to be about.

She wanted Plants Creative to shift from a transactional commodity landscaping company where they never said no to anybody to being able to have the quality team and customer base they desired. The new brand has attracted those people, she says.

“We continue to grow into that brand that they created,” Dooley says. “It felt like an identification of who we are and also an evolution of who we continue to be. We’re attracting a team and customers that really fit us.”

Plants Creative also adopted a team mantra – “Putting you in your landscape” – and created a uniform color scheme across all its merchandise, trucks and advertisements. The company leaned hard into its rebrand, from the company T-shirts to a sign placed in serviced yards that read, “Another job by Plants Creative Landscapes.” That’s not to mention that Dooley finally got her revised website after months of determining the company’s rebrand.

“Companies very quickly realize that what they need might not just be a website,” Lopez says. “I’m not saying every company needs a rebrand, but very often, we need to take a couple steps back before we get to the website.”

Don’t go through the motions.

Dooley knows the process of rebranding can be expensive. Her advice? Pony up the big bucks and expect the process to take time.

“When you find somebody that you just trust, that you believe has the ability to guide you through the process, I would go all in,” Dooley says. “I have so many people go, ‘I just can’t spend that,’ and I get that because we couldn’t spend that four years ago. But it just gains so much momentum and if you try to cut any part of the process out, I just think that it limits the return.”

The returns are still coming in. Plants Creative hired Joanne Augustin, a social media strategist, earlier this spring as a way of promoting the brand more online. They’re focused primarily on Facebook, Instagram, LinkedIn and Pinterest, which is where they feel many of their possible clients post and interact. Dooley wanted people to get a behind-the-scenes glimpse at their company and educate clients enough on landscaping that they establish themselves as clear-cut experts.

Augustin says she acknowledges many landscaping companies don’t have one person dedicated solely to social media, but she hopes it grows across the industry because establishing genuine connections with clients is critical in the digital age.

“Social media is a great opportunity for us to connect directly with our customers and build meaningful relationships,” Augustin says. “That’s the goal: We want to not only share some of the great design projects and just our services in general, but we also want to inform customers on managing their own landscapes and how they can do a few tweaks here and there.”

Plus, Plants Creative still has an ongoing relationship with Compass. They have monthly calls to exchange new ideas and go over what hasn’t worked so well. Dooley, as well as People Experience Manager Hope Smith, often sit in on the conversations with Lopez and his team.

Looking back, she says there are parts of the process that she understood the “how,” but not so much the “why.” Why would they want to shift away from the brown and green color scheme she saw from other companies in the area? And why would she need to think about companies in other industries that inspire her? But by the end, she was able to follow the evolution in thought process that’s promoted the Plants Creative messaging.

“As you grow, you start saying no in order to say yes to the right people,” she says. “That’s what it was for me.”

When built with attention to style and proper engineering, retaining walls can become an attractive part of any landscape design. Whether for landscape grading, defining spaces around fire pits or pool areas, or simply to accentuate raised beds, retaining walls can add depth, dimension, and visual appeal to any lawn.

Here are seven steps to consider when working with clients to design and install retaining walls.

1. Use the proper material for the job.

Some small retaining walls are primarily aesthetic, while other, tall walls have to be strong enough to support an entire slope of dirt and turf. Aaron Gunter, chief operating officer at Willow Branch Landscapes in Brentwood, Tennessee, typically turns to budget-friendly segmental block as the firm’s go-to retaining wall material.

This past summer, the crews at Landscape Consultants in New Cambria, Kansas, worked on many retaining wall rebuild projects, says Dan Fiorillo, the company’s lead designer and salesperson. “We’ve had a lot of work repairing and redoing walls (installed by others) that have failed recently,” Fiorillo says. “It’s proof that you have to choose your stone correctly. Some stones are not meant to be put in the ground or near the ground because of how much moisture they can retain.”

2. Visit the site during planning and design.

It’s important to visit your clients’ sites in person to determine the lay of the land and scope of the project. “We meet at the client’s house so we can walk out into the yard and walk through the actual layout of the space with them,” says Chris Geryak, designer and project manager for MG Landscape and Irrigation Contractors in Indianapolis.

Fiorillo suggests bringing your crew foreman along on the site visit to draw him or her into the design discussions. “Getting the foreman involved on the design end of it lets you get input on ways he might see to cut costs and streamline the installation,” Fiorillo says.

3. Build a visual catalog of your past work.

Creating a visual catalog of your firms’ past retraining wall projects is worth the effort since it helps future clients see the wall styles and materials available to them – and visualize the look they want for their own home or business.

Geryak typically carries a tablet with digital photos of completed wall projects that he can email to clients for their consideration. Fiorillo has found that showcasing a past project catalog not only helps ease the design process with new client, but it also serves as a marketing tool of sorts.

4. Be open to new methods, styles and products.

Some clients simply prefer the look of natural stone. In Fiorillo’s Kansas market, many clients lean toward either dry-stacked or mortared natural stone retaining walls, rather than segmented blocks, he says. For those clients needing a less expensive option, segmented block manufacturers are increasingly offering designs and product lines that mimic the natural stone look. “Going into the higher end market, there are (segmented) products that mimic that natural stone look versus just a typical split face block,” Gunter says.

In addition to natural stone walls and dry stack walls – which also remain popular in Gunter’s Tennessee market – Willow Branch crews sometimes use a thin veneer over traditional concrete masonry unit wall blocks to achieve a natural stone look. At other times, Gunter’s team has strategically placed large natural stones – some as much as 5,000 pounds each – to create bolder-stacked walls.

“We meet at the client’s house so we can walk out into the yard and walk through the actual space with them.” Chris Geryak, MG Landscape and Irrigation Contractors

5. Get plans approved by an engineer.

To help ensure that the retaining wall is being designed and built properly, both structurally and to match the lay and quality of the soil where it will stand, it’s a good idea to have your build reviewed and approved by a structural engineer. This will add a significant cost – perhaps $1,500 to $3,000 or more – to your overall bid, but firms who adopt this approach feel it’s worth it.

“We don’t build any wall without an engineer’s stamp,” Gunter says. “Every site and every soil around here is different, and there’s always a different challenge at each site, especially when you get into the larger walls.”

6. Prep the site properly.

Like Fiorillo, in recent years, Geryak has seen an increase in jobs to repair or rebuild failed retaining walls built by others. The root cause of many of those failures: poor site preparation. “They were not done with proper backfill of the soil underneath,” Geryak says. To ensure that new wall installs last, take the time to use quality draining and backfill material rather than just filling in with whatever is already on site.

“Using good clean rock and the best draining base material that you can means the less callbacks you’re going to have down the road,” Fiorillo says. “We use a lot of crushed concrete (for base material) and behind the wall we like to use clean washed crushed rock, because the water percolates through it better. Going those extra steps makes a big difference in the long run.”

7. Add finishing touches.

Attention to finishing details can transform a purely functional wall into a landscape showpiece. Rather than rigid straight lines, Gunter prefers to design walls with long, sweeping curves, surrounded by landscaping. Additionally, to avoid abrupt wall edges, he typically prefers to curve the ends back into a graded bank or lawn line, he says. For the top accent, the Willow Branch team always installs a cap of some type, whether a natural stone cap or one provided by the manufacturer.

Above all, it’s important to talk with your clients through every aspect of the design so that they’re happy with the end result.

“You want to visit the site with them to imagine the site lines from across the whole home and yard,” Gunter says. “Will they see the walls every day outside of their kitchen window, or is it going to be something hidden below a hillside? Those factors play into helping your client choose the right look and the right building product.”

The author is a freelance writer based in Kentucky.

With husband and wife duo Justin and Christina Crocker leading the charge, the company has grown from a one-man-show to a business operating with over 150 employees. We spent some time with the Earthtones team to get some tips on what’s helped them grow – and how they make it work as married business owners.

1. Curate your culture

“We’re willing to invest in more than one way in our employees,” Justin Crocker, owner, says. In the beginning of the business, he didn’t realize the importance of hiring those who fit in with your culture. Some of the employees Crocker has hired came from backgrounds that were outside the realm of landscaping.

“If the culture is right, and the personality is right, we can teach them our business,” he says. To keep communication open, Crocker sometimes asks employees to write down something that the company could be doing to help enhance the culture. Plus, writing things down often fosters more honest responses rather than having to speak up.

2. Practical purchases

For its vehicle and equipment fleet, Earthtones goes the used route. “It kills me to pay sticker price,” Crocker says. “I can find a low mileage (used vehicle) that someone already took the hit on.” And, the company has mechanics on site to handle any issues that may come along with buying used vehicles and equipment. Keeping up with the trend of good relationships, Crocker says they keep in touch with a dealer that is able to source vehicles for him at auctions. He’s able to call him up, explain what he needs, and the dealer goes out and finds it.

When it comes to equipment, Crocker hates to see a rental invoice. “It wears me out when (rental invoices) come in,” he says. “We own all of our equipment, and we’re growing, so we know we need to keep up on buying it.”

With two mechanics and a fleet manager, Earthtones operates 155 pieces of equipment with engines – 42 trucks, 34 compact track loaders, 23 trenchers and five tractors with backhoe attachments, just to name a few.

3. Strategic bidding

As a growing company, the team at Earthtones works to only bid on projects that will fit in with the way they’d like to operate. They use a spreadsheet to keep track of opportunities and decide it the job would be a good fit to bid on.

Location is a factor in the jobs they take on, too, Jake Elrod, vice president, says. “It might take an hour to get to a job in Dallas, but that’s still a local job.”

Turnaround on bids is about a week, and the process begins as soon as the invitation is accepted. Bids use unite pricing, which gives the contractor a line by line breakdown of what their money is actually going to.

For maintenance contracts, the company is looking at a 75 percent close rate. They operate on a four-day work week, with the fifth day built in for billable overtime or extra work like enhancements. “Basically, we’re bidding work with a certain amount of overtime built in,” Elrod says.

4. Foster partnerships

The onboarding process at Earthtones is centered around learning. “There’s always someone there to help you,” Crocker says. “We paired two new project managers together with current project managers.” Within a year, the new project managers were running their own projects. Crocker says working alongside someone allows the employees to build partnerships. For maintenance, the company uses training videos for basic skills. On the flipside, commercial onboarding is more hands-on.

5. The customer service difference

“You can only charge so much for a product or a service,” Elrod says. “It’s the way you handle yourselves and communicate with your customer service. If we mess up we will take care of it. We’ll eat the cost if we have to.” He says it’s key to communicate to clients. It’s as simple as picking up the phone and letting the customer know if there are any issues on the job or even just to give a progress update. “As long as you pick up the phone, you’re going to be fine,” he says. And, leveraging relationships with suppliers has proven to give Earthtones a leg up. They’ve organized a program for the future that will allow them to essentially pay an upfront dollar amount to vendors (hopefully with some price negotiations built in) for future supplies they may need down the road. For example, letting a tree supplier know they’d like to purchase an entire section of tree when they’re ready, and securing that deal with some sort of financial deposit.

6. Don’t let the business run you

Justin says running a business and raising a family forced him to step back and prioritize things. When his son was born, he stopped working all seven days of the week in order to dedicate more time to family. And, it forced him to hire more people to get the jobs done.

7. Married to the job

Christina and Justin say they’ve found success in making sure each of them is respected in their own individual roles in the company. “It’s important to let each other have the ability to run their own parts of the business,” Justin says. “And, for me, I’m not an office guy.”