(GIC Sneak Peek) Build Your Landscape Business to Sell
In my 25-year journey with GroundMasters I learned a lot about what it takes to build a business that is not only profitable and sustainable, but also attractive to acquirers.
In the late 90’s the roll-ups came around and green industry companies all over the country were getting acquired. I witnessed some of my friends selling their companies and it made me realize how valuable owning a business really is.
It became very clear that we can build these businesses far beyond the value of what we earn each year in payroll, benefits and some earnings. It also became clear that there are certain things you can do, and certain things to avoid to influence your appeal to potential acquirers.
So how do you get started on this path? How do you know if your business is attractive to an acquirer? What can you do to increase this?
Determine the Enterprise Value of Your Landscape Company
I’m covering this topic in depth at the Green Industry Conference in Louisville next week on Thursday, October 24 at 1:30, but an important part of my talk will focus on evaluating the enterprise value of your business.
Enterprise value is essentially what someone would pay you for your business, and there are several key areas you need to look at to determine yours:
- Your Book Value– Start with a simple check of your balance sheet.
- Evaluate your EBITDA– What are your Earnings Before Interest Taxes Depreciation and Amortization?
- Take a look at your Value Drivers– Client growth, client retention, revenue growth, and bottom line profits are the true value drivers of any business. Understand who your customers are, how long you keep them, how much they spend with you etc.
- Study your customer base– What percentage of your business does your largest customer make up? How many customers are you losing each year?
- Recognize your revenue– What does your revenue look like year-over-year?
Determining your enterprise value is a good starting point to get on the path of building your business to sell. After that the hard part comes into play. You’ve got to determine what success looks like to you, formulate a plan that will help you achieve your definition of success, and work every day to fulfill that plan.
If you’re attending GIC, I’m speaking on Thursday, October 24 from 1:30-2:45 on this topic, and again at 3:00-4:15 on “Leveraging your Business for Success”. I’ll also be at the Go iLawn booth #9055. I hope to see you there!
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