How to Sell a Landscape Business

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A landscape business owner gives direction to an employee.
A landscape business owner gives direction to an employee. (Image: IPGGutenbergUKLtd/iStock/Getty Images)

Selling your landscaping business will be easier if you can list your hard and soft assets, value them accurately and make realistic profit projections for several years. Helping the new owner transition by agreeing to make introductions to customers or stay on for a few months can also help you make your business a more attractive investment.

Value Your Tangible Assets

Start the process of selling your landscape business by listing and valuing your hard assets. These includes mowers, aerators, blowers, edgers, trimmers, chemical sprayers, hand tools, wheelbarrows, a truck trailer, seeders, weed whackers, hoses, clippers, rakes and any other equipment you will transfer to a buyer of the business. Include any work contracts that will transfer with a sale. Check online locally to see what similar used items are selling for in your area. You might start with sites such as Craigslist for items costing only hundreds of dollars, and then look at sites such as IronPlanet.com or Mascus.com to see what more expensive used landscaping items sell for. Find out if any of your items have warranties that will transfer with a sale. For expensive items such as a pickup truck with the company name on the side, refer to online sites such as Kelley Blue Book or visit area auto dealers for valuations.

Value Your Intangible Assets

List the soft assets of your business, such as your client list, name, logo, goodwill, Internet presence, marketing materials, website and URL. Try to value them by determining what it would cost a business owner to create these assets from scratch. If you can’t place a dollar amount on all of these, explain the value of each of them to a potential purchaser. Beyond dollar values, intangible assets provide benefits such as an ability to attract new customers and generate revenue easier because the company has a track record and referrals. Tell customers if you have any key employees who would be willing to transition to the new owner.

Prepare Financial Documents

Create a balance sheet, which is a listing of your current assets and liabilities that shows your company’s net worth. In addition to tangible assets such as equipment or real estate, you should list intangible assets like your business name, logo, trade and service marks, copyrights and goodwill. These can be difficult to value, so you might need to hire an accountant to help you determine their value. Create a budget that shows what it costs to run your business. This will include the costs to maintain and replace equipment, buy gas, hire labor, conduct marketing and run your office. Include state and local business license and incorporation fees. Be prepared to show an investor your current bank statement and the last three years’ worth of tax returns. Create a profit-and-loss statement that shows the income, expenses and profit of the business.

Project Potential Earnings

Project what the future earnings of the business will be. You will base this on previous earnings and any new potential business you can project with realistic evidence. You might offer to make introductions to new customers to help the new owner transition the business and keep more accounts. You can also supply names of potential new customers, such as those who live or do business in a new subdivision in the area. You might offer to continue to work for the business as the main contact with clients for several months to help maintain the current client base.

Make an Offer Sheet

Decide on your sale price based on the figures you calculated in the preceding steps. Next, create an offer sheet that lists the assets you will transfer with the sale, any future involvement you will agree to have during the transition, and a non-compete clause that guarantees you will not open another landscaping business in the same area, or solicit landscaping customers for any other business in the same area for a specific period of time. Value your business based on the business' profit potential for the next three to five years.

Look for Buyers

Start your final sale process by contacting established competitors who might want your business. Although they might not need your hard assets, they might still be willing to buy them in exchange for your client list and personal introductions. Advertise on Craigslist and in local papers that take classified ads for business opportunities. If your business is large enough, use regional or statewide advertising venues, including websites such as BusinessBroker.net and BizBuySell. Drill down to the areas of these sites that list landscaping businesses. Don't forget to offer your employees an opportunity to purchase your business. Because you have worked with them and know their character, they might be a better risk for arranging a sale that you might have to partially finance. If any employees show serious interest, offer them your business before you begin shopping it elsewhere to avoid hard feelings and possible early defections.

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