Evaluating a Lawn Care deal, looking to connect with someone in the space
September 29, 2023
by a searcher from University of Wisconsin-Milwaukee - Sheldon B. Lubar School of Business in Denver, CO, USA
Hello everyone - I'm evaluating a small (~$1M) lawn care/landscaping deal where the SDE is ~$0.4M, but includes the comp for both sellers, which are still heavily involved in the day-to-day operations and do not have much in terms of processes or software to streamline the business. I'd like to connect with anyone that's recently closed on a lawn care business to better understand the risks and key learnings post-closing. My primary concerns are:
1. Is it unrealistic to think I can assume their responsibilities over a transition period by implementing software and more processes?
2. How much do you budget for capital expenditures?
3. What tools have you used to recruit and retain workers?
Thanks in advance to anyone that can help!
from Oklahoma State University in Memphis, TN, USA
To give a meaningful response will require knowing about the specific nature of the services provided and the types of customers served. There is a big difference between fertilization/weed control, mowing, and landscaping projects.
First broad impressions: That is a pretty small transaction and it is very likely that the owners are not just heavily involved in day-to-day operations, but personally "own" many of the customer relationships and are actively involved in providing the services. Changing the character of the business is likely to require considerable capital beyond the acquisition price. To manage and grow the business, you would probably have to replace the owners on an operational basis, which would significantly affect the reported discretionary earnings.
Contact me directly and I'd be happy to discuss it with you.
from Southern Methodist University in Fort Lauderdale, FL, USA