How to Acquire a Landscaping Business
Buying a turnkey landscaping business, which means one that is currently in operation, has a number of benefits. These include an established client list; existing equipment and machinery; a solid reputation in the landscaping industry; and workers who know their business. As with all business transactions, however, check out the business carefully before making an offer to ensure that you do not buy one that will lose money.
- Search for landscaping businesses in your area using business brokers websites and commercial classified advertisements. Contact the local plant nurseries to ask whether they know of landscapers who are interested in selling. Identify successful landscaping businesses in your price range and approach them about making an offer.
- Investigate the landscaping businesses that are for sale to determine the value of their operation. Ask to see the businesses’ financial records and a copy of their bank statements, and have an accountant verify that the statements are accurate. For each, obtain a valuation from the accountant and compare it with the price the owner wants.
- Contact existing landscaping clients and obtain references from them on the performance of the business. Find out whether there are existing problems that are causing dissatisfaction among clients; determine the reasons for these and the scope of the problems.
- Check each business’s registration with the local secretary of state’s office and verify that the license and permits needed to operate a landscaping business in your state are all in place. Find out what the requirements will be to register a change of ownership and whether this will affect the operation.
- Request to “shadow” the owner or manager for a few days as he performs landscaping services for clients, to get a firsthand view of how the business operates. Watch the employees and their attitude as they go about their duties, and observe the standard and quality of their work.
- Examine the landscaping equipment and machinery owned, such as chain saws, lawn mowers, hedge trimmers, leaf blowers and outdoor power generators. Ask for purchase records and compare the age and condition with the records to see whether the equipment has been well-maintained.
- Obtain approval for financing, if required, by drafting a business plan, a budget and financial projections for banks and potential investors. Provide information on projected returns and establish a timeline of the investment or loan, as well as the interest rate payable.
- Make an offer for the business based on the seller’s price range, your observations and the valuation provided by your accountant. Ask the business broker whether other parties are interested in the business and whether the owner is likely to consider your offer. Have a business sale agreement compiled by a lawyer, and make sure that it includes all assets and liabilities of the landscaping business.
- Take over operations, which may include retaining the existing staff. File change of ownership documents with the secretary of state’s office and the local IRS office, and apply for a business license or permit in your own legal business name. Notify all the clients of the change in ownership and invite them to meet with you to discuss their requirements.
