Pruning trees, pulling weeds, and watering plants. Some people just love gardening.
And it turns out you can turn that passion into recurring revenue, baby!
Most people either don’t have an eye for landscaping or don’t have the time and energy to do it.
That’s the perfect scenario for an aspiring landscape business owner.
And if the hassle of ramping up a new business sounds like too much, there’s a simple solution—buy one that’s already running.
Buying someone else’s landscaping business will get you in the game faster. It’s a great way to enter a profitable and high-demand market. And you don’t have to worry about buying equipment bit-by-bit or getting the all-important first customer.
But that doesn’t mean you should jump in unprepared. Here’s what you need to know first.
Why Buy an Existing Landscaping Business?
Here are a few quick reasons a lawn care business rocks:
- It’s recurring revenue (the grass always grows, weeds always pop up)
- People take pride in their lawns but don’t want to deal with caring for it
- It’s easy to scale from a small operation to a multi-service business
The landscaping industry grows over 6% annually. One landscaping study shows that the average company has 300 customers and earns nearly $13k from each one.
And it includes a huge range of companies offering a variety of services. You can find anything from one-person seasonal operations to big companies handling massive contracts.
There are plenty of related services a landscaper can expand into, too. Many landscapers offer upsells like:
- Deck repair and deck building
- Tree trimming
- Selling exotic plants
- And much more.
All of this means there’s plenty of opportunity for you to take an existing business, optimize it, add services, and earn your piece of the pie.
The grass may really be greener with an established landscaping company instead of starting out entirely on your own.
It’s true that you can still carve out a decent market share in your town by starting a lawn care business from scratch. Just check out how one two-man team in Washington took a $10,000 investment and built it into a $58k/month business.
But compared with the ease of growing a business someone else built, you might not want to begin at ground zero.
You could make money faster if you find someone who wants to exit or someone who has a business you can improve by stepping in. That’s because you’ll leverage an existing customer base, an established brand, and infrastructure that’s already in place.
Existing businesses come with baggage, though. You’ll want to know the company’s performance and your chances to improve it before you make a formal offer.
The Process of Buying a Landscaping Business
You can’t just go to the landscaping business store and pick one off the shelf. As cool as that would be, it takes some know-how to find and close a deal.
Follow these steps to find the perfect business acquisition for you:
- Find businesses for sale
- Assess potential businesses and do your due diligence
- Secure financing for your new business
- Negotiate and close the deal
Create a Shortlist of Landscaping Businesses for Sale
Landscaping ventures make great boring businesses to purchase.
Some landscape companies narrow their scope by geography and others by services. Look for a business with a clear target market. In an ideal world, you can expand on current operations to improve profitability, too.
Before you begin your research, think about your goals.
What kind of landscaping business do you want? One where you do the work yourself and keep a limited team of summer-season contractors? Or a big operation handling year-round projects with a lot of employees?
Your personality and business style can guide you in the right direction, and you’ll find landscape businesses all over that spectrum.
Knowing what to look for narrows down your research process and guides you to the businesses that line up well with your personal goals.
You can find landscape businesses for sale in a few ways:
- Check out sites like BizBuySell (companies actively on the market) or BizScout (a tool we created specifically for finding off-market deals!)
- Local connections
- Working with a business broker to find companies that fit your qualifications
Create a list of businesses that fit your goals. Then start reaching out to the owners so you can do a deep dive.
Financial Assessments and Due Diligence
Look at all aspects of the company’s operations to make a firm offer.
An owner will want to know you’re serious before revealing this data, but you cannot make an informed decision or name a price without knowing the real numbers.
Make sure you:
- Evaluate the current pricing against industry benchmarks
- Look at revenue trends and financial statements
- Estimate your costs for any necessary upgrades or improvements
- Page through bank statements, tax returns, and any debts
- Look at how income fluctuates seasonally
If the numbers tell you a good story, don’t stop there. Legal issues could serve as massive roadblocks for effectively scaling a landscape business.
Continue your research by looking at:
- Current business licenses (at the local and state level)
- Existing contracts with vendors and customers
- Leases
- Any pending lawsuits
Beyond that, you need a handle on the company’s operational function.
- Who works there?
- Are they reliable and professional?
- What skills do the employees have?
- Who hires this lawn care company?
- Are they generally happy?
You might discover red flags that save you from a terrible deal.
You can fix things like unreliable staff, but nobody wants to inherit back taxes or other big issues.
You also need to consider local competition, the services the business offers right now, and the conditions of the business’ equipment. Here are some questions to ask:
- How many landscape companies are in the region?
- Do some get more action than others?
- What services do competitors offer?
- What’s the value and state of current equipment and other business property?
Exploring all of these factors will help you decide if the business you found is worth buying.
Secure Financing for Your Purchase
In general, you have four options to fund your venture:
- Your own cash (savings or personal loans)
- Bank or business loans (including SBA loans)
- Getting investors
- Using seller financing
If you need loans or investors, write a business plan that shows viability.
Although investors provide valuable upfront cash, you may cut short your own profits depending on the terms they’re willing to give you. Private investors will want equity in the business. Bank or SBA loans will saddle you with some debt and interest.
If you don’t want the admin time and red tape of dealing with investor pitching or bank loan applications, get creative with seller financing.
You may even score the business for $0 down or very little cash out of pocket.
Seller financing allows you to pay back the previous owner over time. If you did your homework in due diligence, you and the seller should feel confident about making a deal based on future returns anyway.
You can pitch seller financing as a win-win since the previous owner gets to exit but has the peace of mind that they’ll continue getting cash from the business for a time.
Negotiating the Deal
Don’t do a deal alone.
Work with brokers, lawyers, and accountants to protect your risk at each stage. These professionals might spot problems you miss and can help you structure any formal plans effectively.
At the least, you’ll want a lawyer to draft or review your sales agreement.
The negotiation table is another place seller financing has the edge over other payment options. You can use what you know about the business to negotiate pricing and terms that work for both parties.
Remember these deal tips:
- Use data you found in due diligence to back up your offer
- Don’t be afraid to ask for what you really want
- Know what the seller wants ahead of time (Cash? Smooth or quick transition? Promises to keep on employees?)
You should feel confident about payment terms but also how the transition unfolds. This includes notifying staff of any changes and choosing formal dates for takeover.
You might choose to keep the current owner on temporarily. You can learn the ropes while ensuring a smooth transition for customers this way.
The more you plan ahead, the better.
Growing Your Landscaping Business
Once the owner hands over the reins, it’s time to grow your landscaping empire. Your prior research and business plan pay off here.
Depending on what you found, you might:
- Expand the services you offer
- Expand existing services to new geographic areas
- Deploy new or better marketing strategies
- Leverage technology for operational efficiency (such as using booking and scheduling tools)
The great thing about buying an existing business is that the sky’s the limit. You won’t have the same headaches as someone who’s starting a landscaping business. Instead, you get to focus on building on a proven foundation.
Ready to Make the Leap into Landscaping?
Most folks can’t tell a daisy from a dandelion, and that’s where your potential business comes in.
Learning the market and running the numbers will set you up to make a great deal on an existing business. And looking for improvements you can make as soon as the deal is done will set you up for quick growth.
You can be as hands-on or -off as you want with a landscaping business. What matters is finding a rock-solid business with a firm foundation that you can scale over time.
