Trying to value your landscaping business, find qualified buyers, and sell it all by yourself? That’s a lot to handle. You are essentially running the business while trying to exit it at the same time. 

That’s why many business owners use broker services. They free up your time and make the exit much more professional.

The problem, though, is that you don’t even know how they work, the services offered, how valuable they can be, or how to choose one. 

Well, this guide will help you change that, so you can simplify your transition out of owning the business without feeling overwhelmed or losing clients.

You will learn about:

• The landscaping business broker service

• Why you should leverage it 

• How broker services help sellers and buyers

• Ways to sell a landscaping service

• How brokers value landscaping businesses 

• How to choose the right landscaping business broker service

What are landscaping business broker services?

Landscaping business brokerage services are offered by professionals who specialize in buying and selling landscaping companies. They do this by acting as a matchmaker between buyers and sellers, ensuring they reach an agreement that benefits both parties. 

Let’s say you want to sell a landscaping business. Brokers do the heavy lifting by: 

• Evaluating the company’s worth

• Positioning it for sale

• Providing marketing services to attract buyers

• Negotiating deal terms and handling all the complex paperwork

• Selling the business to a worthy buyer 

• Ensuring a smooth transition once contracts have been signed 

Landscaping business brokers understand the market trends, and it’s their duty to ensure the seller and buyer get the best deal. 

What are the benefits of hiring a landscaping business broker?

A business broker saves you time and stress by managing the exit process for you. In addition to that, partnering with landscaping business brokers is useful because they have:

• Industry knowledge and experience: Brokers have a good understanding of the landscaping market in your area. They would be bringing their wealth of experience to help with the sales process. Where you’d typically struggle with valuation, they know the right questions to ask and experts to partner with.

• Access to a network of buyers and sellers: Think of landscaping business brokers as real estate agents. They’re always in touch with what goes on in the industry, including who is selling and who is buying. 

• Proper understanding of business valuation: Wondering what your landscaping business is worth? Business brokers have you covered. They can use different methods to evaluate a company's value.

• Professionalism and expertise: Business brokers bring order to the somewhat chaotic process of selling a company. Where you lack patience or objectivity, they bring a different perspective, understanding, and interpersonal skills to the table.

How do landscaping business brokers help sellers?

While you, as a seller, want to get a good value for your business, you’re also committed to ensuring it’s bought by a buyer with similar values who will take care of it, as well as the current employees. 

That’s where a landscaping business broker can be helpful. See what they bring to the table below:

• Business valuation: Brokers help determine the value of your landscaping business. They assess factors such as local market conditions, the size of your recurring client list, the value of leads in the pipeline, client relationships, and employee skills to determine a reasonable price for the business. 

• Marketing: They position your business so it’s appealing to potential buyers, highlighting its high-quality features. Brokers prepare the marketing materials and reach out to prospects. 

• Buyer sourcing: Landscaping brokers maintain relationships with buyers (including private equity firms) seeking landscaping companies. This ensures only qualified buyers with shared values are sent your way.

• Deal negotiation: Brokers take charge of the negotiation process from pricing to terms and contingencies, ensuring you get the best possible deal.

• Due diligence and paperwork management: They provide an extra layer of security for your company during the negotiation process. Brokers run checks on potential buyers, guide you through legal documents, and help reduce liability risks.

Simply put, they manage the entire sales process, helping you preserve the business’s worth and oversee operations until a deal is reached.

How do landscaping business brokers help buyers?

You’re an entrepreneur who’s aware of the growth trend in the landscaping industry. It looks promising, and you want to capitalize on this opportunity by buying a landscaping business. 

However, you don’t know where to start. Things like evaluating the prospective seller's customer base, the business's reputation, or pricing trends in the area aren’t your strong suit. 

Well, you can partner with a landscaping business broker who can:

• Identify opportunities: They’ve been in the industry for a while and have built an extensive network with business owners. Brokers know who wants to sell and can make an introduction. 

• Provide due diligence support: Landscaping brokers can ask all the right questions. They’ll research topics such as the status of landscaping equipment, insurance coverage, current employee skills, and the business's reputation. Brokers provide you with detailed information so you can make an informed purchase decision.

• Ensure a fair business valuation: They help you avoid overpaying by comparing the seller’s asking price with local market trends, revenue multiples, and industry benchmarks. 

• Negotiate deals and provide financing guidance: Brokers can handle negotiations, discussing pricing, payment terms, and contingencies to protect your investment. If you need financing, they can also help you explore funding options. 

What is the process for selling a landscaping business?

Let’s say you need to sell your landscaping company. Here’s how it can be done through a broker:

1. Find a landscaping business broker: A quick Google search of ‘landscaping brokers near me’ is a good place to start. You can also discuss recommendations with business owners in your network. 

Once you’ve found a broker, discuss your intentions. Talk about why you intend to sell the landscaping business, your story, the team’s expertise, client list, and any other relevant information. Think of it as an introductory call, the kind you do with clients. 

1. Business valuation: The broker conducts an in-depth valuation of the landscaping business based on market trends, revenue, customer contracts, and available assets. 

They compare the company with other businesses that have been sold and provide a reasonable selling price. Brokers will explain how they arrived at their valuation, and, if you’re okay with it, you can sign an official agreement.  

1. Sign an agreement: Brokers will typically provide an agreement (between six months and one year) that you need to sign. It will outline the duration it will take them to close the deal and the expectations of both parties.

2. Pre-market prep: Next, the broker will help prepare the landscaping business for sale. This could involve:

• Intense discussion about your business operations, available equipment, awards, and client lists.

• Compilation of your profit and loss statements and tax returns.

• Suggestions for cleaning your books.

• Highlighting your landscaping business’s unique selling point. 

• Photographs of different parts of the business.

• Defining a marketing message and the best approach to selling it.

1. Marketing and advertising: Brokers handle the advertising of your landscaping business. They typically maintain a database of potential buyers, ranging from aspiring entrepreneurs to private equity firms and competitors. 

They also have working relationships with other brokers who can help with finding potential buyers.

1. Managing buyer inquiries and offers: Once offers start coming in, brokers handle all communications, organize meetings, and coordinate due diligence. They run checks to see whether potential buyers can afford the purchase or have experience with the business to ensure ongoing success. 

Brokers coordinate calls between you and the prospect, where you can assess whether or not the would-be new owner is a good fit.

1. Contract negotiation: The landscaping broker negotiates price, payment structure, non-compete clauses, and transition terms. They leverage experience and skills to help you get the best value for the business.  

2. Close the sale and transition: After finding a buyer that checks all your boxes, brokers will coordinate the sale to finalize the deal. They’ll meet with CPAs, lenders, lawyers, and others to ensure legal compliance and that the sales agreement is in perfect order. 

Brokers facilitate transition plans, coordinating the transfer or cancellation of permits, insurance policies, and vendor agreements. They help organize training for the new owners and any other activities after the deal is completed.

How do brokers value landscaping businesses?

Landscaping brokers use methods such as multiples of annual earnings (SDE and EBITDA) to evaluate a company. They apply a multiplier using industry averages and comparable sales to calculate the business’s value. 

Seller’s discretionary earnings (SDE) represent the financial benefit you can expect from the business, covering expenses such as interest, depreciation, amortization, taxes, and the owner’s salary. Businesses with a strong SDE reflect consistent cash flow and support a high SDE multiplier.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) are used to value larger businesses for buyers not involved in daily operations.

In addition to that, here are other factors that determine how brokers value your business:

• Tangible assets: Trucks, trailers, mowers, and other tangible and intangible assets affect the company’s value during negotiations.

• Human capital: A well-trained workforce that can operate without heavy reliance on the owner is considered a viable business that is easy to transition.

• Client base: The kind of clients you have influences the company’s value. Got a mix of residential and commercial customers? Your business value just went up.

• Revenue streams: What type of projects do you typically get? Single projects like installations or recurring maintenance? More recurring contracts mean steady revenue and a better valuation. 

• Real estate: Your business’s worth increases if you operate from an owned property. Leased properties can be valuable as well if the lease is transferable. 

How much do landscaping business brokers charge?

Business brokers are compensated either with a fixed fee or a percentage commission on the sales price. The right option depends on the business size, complexity of the sale, and the services they’ll provide.  

The percentage-based model typically ranges between five and 20% of the sales price. It encourages brokers to get the best possible deal for the business. 

Fixed prices are negotiated during the discovery call and should reflect the broker’s contribution to the transaction.

How much they end up charging depends on:

• The contribution brokers make to the sale: If they handle everything from start to finish, they will want higher pay.

• The size and revenue of your business: Big landscaping companies hire more employees, require licenses, and have more complex structures than small-to-midsize businesses. This could make it challenging for brokers to do their evaluation, requiring more compensation.

• Location and market condition: Is your business in a thriving location with steady revenue? That can impact how much you pay. A strong local business might mean lower fees and a higher sales price. Big cities with several brokers lead to competitive pricing.

How do I choose the best landscaping business broker?

To choose the right broker for your landscaping company, you need to evaluate their experience and familiarity with the landscaping industry. 

Beyond the industry, you need someone who understands the local market where your business operates and the challenges unique to the area.

Here are some questions you can ask during the discovery call:

• Have they sold landscaping businesses before? If so, how many?

• What’s their success rate? It would help if there were testimonials you could read or watch. 

• How many years of experience do they have?

• Are they familiar with landscaping businesses the size of yours? 

• What additional services do they offer?

• Do they provide readiness assessments and strategic planning?

• Is there a system for maintaining confidentiality?

• Is there a brokerage process, from valuation to closing?

How Aspire can help

Whether you’re looking to sell or buy a landscaping business, landscaping brokers can help oversee the whole thing. 

While their job frees you to maintain the business value until the sale is finalized, they need financial and operational information about your business. This helps them make the company more attractive to buyers.  

Here’s what they’ll likely ask for: business reports, account statements, profit and loss margins, contract lists, employee lists, performance data, and equipment status reports.

All that information is easily accessible with landscaping management software like Aspire. 

Aspire offers features like scheduling, estimating, reporting, CRM, and accounting to streamline your business operations. With these tools, you gain detailed insights into your operations that you can share with the broker: 

• Scheduling lets you organize projects and assign tasks, so your crew always knows who’s working on what. 

• Estimating enables you to create, send, and record proposals in minutes. 

• CRM monitors your accounts, enabling you to build great client relationships. You can manage projects and track customer incident reports.  

• Accounting and payroll integrate with QuickBooks, ensuring your financials are always accurate. 

• Reporting provides insight into every aspect of your operations, from finance to employee performance, ongoing projects, profit and loss, most-requested services, and equipment management.

Book a free demo to see how well Aspire works for landscaping companies.

Frequently Asked Questions (FAQs)

What documents are needed to sell a landscaping business?

Here’s a list of documents needed to sell your landscaping business:

• Financial documents: Profit and loss statements, inventory lists, cash flow statements, and tax returns.

• Legal and business documents: Business registration, business license, ongoing contract agreements, and supplier agreements.

• Client and contract information: Revenue per account, service agreements, recurring contracts, and records of completed jobs with scope and pricing.

• Employee and HR information: Employee roster including roles, wages, and tenure, independent contractor agreements, and workers’ compensation insurance certificates.

• Insurance and bond documents: Proof of general liability insurance and bonding, and claims history.

• Operations documents: Equipment maintenance logs, vehicle title and lease agreements, scheduling and route plans, and standard operating procedures (SOPs) for services.

• Property deeds or office/shop lease agreements.

What makes a landscaping business attractive to buyers?

Here’s a list of things that make a landscaping business attractive to potential buyers:

• Clean financial records

• Recurring revenue

• Solid reputation with clients and staff

• Efficient operations

• Skilled and experienced employees

• Non-reliance on the business owner

• Well-maintained equipment and vehicles

• Multiple service offerings

• High-value client contracts, e.g., maintenance contracts and commercial projects

How long does it take to sell a landscaping business?

Selling a landscaping business can take between six and 12 months, from listing to closing. The timeline depends on several factors, such as:

• Business size and profitability

• Availability of records 

• Market conditions

• Financing options

• Negotiation complexity

What is the average profit margin for landscaping businesses?

The profit margin for landscaping companies varies widely. On average, it ranges between five and 45%, depending on the service types offered, company age, and target market. 

Other factors that can affect profit margins include:

• Business size

• Geographical location

• Operational efficiency

• Labor costs

• Cost of supplies and materials

What challenges do landscaping businesses face when selling?

Obstacles you might face when selling the landscaping business include:

• Inadequate financial records: Tax records are missing, and financial statements are disorganized, making it difficult for brokers to conduct a proper valuation of the business. 

• Client concentration risk: If the bulk of your revenue comes from a few clients, that might be a red flag for buyers. 

• Owner-dependent operations: Businesses where the owner is responsible for operations, management, sales, procurement, and client relationships aren’t attractive to buyers. The transition could be messy if the owner isn’t available. 

• Retention issues: High client turnover can reduce the business's value. 

Does my landscaping business need an LLC structure to be sellable?

Not necessarily. It is, however, beneficial to have one as it separates your personal assets from the business. It offers legal and financial protection, making it more attractive to buyers.