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The Biggest Sale: What to expect when selling your landscape business

July 8, 2020 -  By
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After nearly 20 years in the landscape and lawn care business, I knew it was time to sell.

I still remember where I was when I made that decision. We’d built a business from the ground up to 10 employees and nearly a half million in annual sales. The people we had and the knowledge they brought meant we could tackle almost any job.

But I was approaching 65, had other interests and most of all, I knew the business was strong. The decision to sell was simple.

Business owners will come to a time when they know it’s time to sell. But what are the right steps to take to make sure that sale goes as smoothly as possible? After all, you’ve worked hard and made the business a priority — now it’s time to get the most from selling your business and help ensure it continues successfully.

Here are some of the lessons I learned from my experience.

Shape your business

When possible, look ahead and plan the sale. This involves shaping your business to be marketable. When a potential buyer goes to their lender, the numbers from your business should be strong and consistent. Owner cash flow and bottom line are critical, but bankers like to see year-over-year growth. Even though your thoughts are of getting out of business, it’s still important to be hitting daily sales and profit goals.

Make sure your equipment stays in good condition. This will be important when a potential buyer walks into your building and sees your equipment for the first time. It will also be worthwhile when they visit a lender. Be sure to keep a reasonable amount of inventory on hand, since the business needs to be ready for the buyer to step into.

Silence is golden

It’s important to keep your intention to sell very quiet. The last thing you want is for employees and customers to get nervous and go to other opportunities. This means walking a line between advertising and not telling anyone. When you do finally sign papers, present the ownership change to your employees as being a good thing for them.

Consider if you’ll use a broker

In my case, I decided to use a broker. A good broker will not only find potential buyers but will know the steps to follow to move the deal through the process. They’ll likely have a solid nondisclosure agreement, cash flow sheets to fill out and a list of lenders and attorneys. Just like in real estate, plan to pay a percentage for their help. But, often, a broker will know the true value of your business and may bring you more buyers and a higher sale price.

Practice patience

Patience is very important — just because someone looks at your business or has interest in it doesn’t mean they’re the right buyer. This needs to be the right deal for both parties involved. You’ve worked hard to build something, and this is your opportunity to leave a legacy. Pick the buyer that has the financial ability, knowledge and experience to successfully push the ball down the field after the sale.

A good sale contract will include a noncompete agreement and details of how you’ll be involved during the business transition. Both of these are crucial for the buyer to feel comfortable and ensuring the deal moves along smoothly.

Expect hiccups

Even though you know your business well and use a broker, there still may be last-minute issues that will need to be addressed, because no one thinks of everything. Buyers get sweaty palms as the deal gets closer, so anticipate as many details as possible. Prepare solid, confident answers to possible questions and concerns. Just like any of the sales you’ve made before, be a closer.

Whether you’re planning to retire or move in a different direction, this is likely the biggest sale of your life. It’s worth the time and effort to get it right.

Joe Flake is the former owner of Target Lawn Care, in Paola, Kan., which he began in 2004 after retiring from his position as a full-time firefighter. He currently serves as captain at a volunteer fire department as he looks for his next challenge.

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