How Much Do Business Brokers Charge
Wondering how much business brokers charge? Like many things when it comes to selling a business – there’s no simple answer. Nearly every business and every situation is unique. Ultimately the answer boils down to the size of your business and the type of broker you will work with to sell it. For “Main Street” businesses , the price will most likely be 10% of the sale price.
For lower middle market companies , your broker will likely use the Double Lehman pricing model.
For middle market companies, , you will probably be charged a simple percentage between 1% -5%.
A Bit About My Experiences
I much say upfront that I have never bought a lawn care business, but I have always been a builder and a seller. Over the last 30 years, I have sold two complete lawn care business , and I have also sold close to 2500 lawn care accounts over that time.
I must also confess that I did place my last business with a broker as it had five vehicles on the road and over 450 accounts. The business was listed for 150K and was with the broker for three months. He could not find a buyer so I broke the business up. I sold 350 accounts to four buyers. I kept 100 of the best accounts kept all the equipment, the name and two of the vehicles.
Now my wife and I have a van each and work 20 hours each in the business every week. We turn over around $500 dollars a day. I must also say that this is not all lawn mowing money. We have 20-30 organic lawn care leads come in every week which we sell. This gives me time to blog and this is the reason behind me making this information available here. We will sell up completely one day but for now, we are happy.
I would guess that I have made somewhere between 40-60 individual sales over that time so I have dealt with a lot of buyers.
When I sold my first lawn mowing accounts in the early 90s, I did not know the value of finding the right buyer. I would sell to anyone, and I grew to regret that decision.
The early lessons I learned were.
Know Your Equipment Value
What is your equipment worth?
You are going to need to work that out. When you are doing this, do not value everything at cost price. You need to consider what the machines are actually worth, not what they cost you. The best way to do this is to go online to somewhere like eBay or places where equipment is sold and find prices on equipment similar to yours.
When I have a lot of machinery going with a business I sometimes value all the equipment at half what it costs regardless of whether it is old or new. This can give you a good figure for smaller machines.
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Look Pretty And Talk Smart
Before we go any further, I need you to do something for me:
Blink.
Thats how long it takes to make a first impression on your clients, according to the Association for Psychological Science.
Clients will make a snap decision on whether you are:
- Competent
- A good match
In under 0.1 seconds.
You only get one chance. How you look and how you act will determine the number of jobs you sell. You need to present yourself well.
What do clients see when they see you?
- Do you smile?
- Are you wearing a professional lawn care uniform or a ratty t-shirt?
To look like a true professional, we recommend you:
- Wrap or Paint your truck
- Get the right lawn care or landscape uniforms
- Keep a nice polo in your truck. Wear it when you meet a client for the first time
Nail these, and you will be up to 43% more likely to get the client.
Youre Ready To Retire And Have No Heirs
Retiring from your business is a big decision, and its not always an easy one to make. You might find yourself in the position where youre ready to retire but have no heirs interested in taking over. Thats why selling your business is the next best option! When you sell, you will be getting back what you put into your business.
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Professionally Designed Business Cards
Take the opportunity to really get professionally designed business cards instead of the VistaPrint ones you likely designed yourself. A professional business card can be the deciding factor on whether or not you get that commercial account callback.
It reminds me of an exercise a few years ago at a sales meeting. All of us formed a circle in the room and took out our business cards. Each of us then passed our business card to the person to the left. The person to the left had two options for the business card:
- Do nothing with it
- Tear it in half
If the person to the left tore the business card you handed them, it was because it was not impressive or engaging.
When you watch someone tear up your own business card in front of you, it changes the way you look at your brand appearance in the smallest details.
Do you think someone would tear your business card?
The Easiest Way To Be A Pro At Seo
Even better than creating an amazing website is creating a website that appears at the top of search results.
SEO is the combination of healthy web practices and keyword usage that puts your website at the top of search results.
Since websites with good SEO get seen first, businesses that invest in SEO are getting over 50% of web traffic.
Good SEO can be several times more profitable than great flyers!
Read our full SEO guide for lawn care to find out more.
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Get Too Many Lawn Care Referrals
New clients dont trust you.
Heres why: You sell an invasive service, and youre a stranger working on their property.
And while this is true, can you guess who they DO trust?
Their friends and family.
Word of mouth referrals are a powerful tool you can use to sell your invasive services – like lawn care and landscaping.
Your clients NEED to trust you, and great referrals skip over that trust barrier.
Even better?
Over time, referrals snowball into more referrals. In other words, one good client can win you two more then four, and so on And before you know it, clients will start finding you.
Just follow these magical steps to win amazing lawn care referrals:
- Ask for referrals at the right time
- Focus on the clients who LOVE you
- Equip you and your team with business cards at ALL times
- Use better referral incentives and offers
Great referrals cost $0, and theyll boost your lawn care business revenue and reputation.
Boost Your Digital Presence:
With that said, its absolutely crucial that your lawn care business has a robust online presence, including a search engine optimized, user-friendly website, digital ads and social media. Potential customers will start by searching the web, and if they dont find you there, youll be out of luck. Your lawn care business should have a solid website where customers can find out about your company and the services you offer , be SEO-friendly so that you show up in the searches that matter, and be advertising online where your likely customers will see you. The best digital marketing will help you reach the right leads, in the right places, with the right message.
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Your Prices Vs Your Competitors
This is how most clueless lawn care owners price:
They find out what their competitors charge.
Then, they undercut them. That is a TERRIBLE idea for 3 reasons:
- It drives down the market, which makes your work less profitable
- You will eventually price too low and run yourself out of business
- But the third reason is the most interesting . . .
Stanford scientists performed a study on Pricing.
Two glasses of wine were placed out in front of the study participants:
- One had a $5 label
- The other had $45
Every time, the participants preferred the taste of the $45 wine. And every time, they said they would be more likely to purchase the $45 wine.
What they didn’t know was that the two wines… were the same.
Let this be a lesson to you: if you are the cheapest guy on the block, clients will be LESS LIKELY to buy from you.
Aim to be the premium lawn care provider in your Market. You will charge more, but you will also do a much better job.
Everyone will agree you are the best.
Marketing Tips To Prepare Your Lawn Care Business For Spring
As 2018 winds down and we move into the new year, its time to start thinking about taxes, winter services, new equipment upgrades oh yeah, and marketing your lawn care business for the spring.
If youre in a downward swing of services and income in the winter, its no doubt youre probably getting amped up for March and April services. And you most likely want a big season opener after feeling like youve been skimping by the last and first parts of the year.
Whether you have a marketing budget set aside or are using this time to think about advertising ideas when the time comes, marketing your lawn care business for the spring starts right now! You want to be at the top of your customers minds at the start of the new season both traditionally and digitally.
Here are nine ways to accomplish that goal:
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How To Sell A Lawn Business
A existing lawn business with an established list of regular customers could be easy to sell. A prospective new owner will be able to forecast first-year revenue because of the existing business, making the transaction potentially less risky. You can sell the lawn business even if you have not built up a steady clientele. However, if possible, you should sell before the start of the peak mowing season. Chances are few buyers in cold-weather states will want to invest in a lawn service in the dead of winter — unless the price is very attractive.
Establish a price for your lawn business. An industry standard called a “valuation” measures the worth of your lawn company by considering how much you are earning as the owner along with the worth of your equipment. According to Entrepreneur.com, lawn companies are valued at about one or one and a half times the seller’s earnings, plus the value of the equipment. Variations of the formula allow for some of the owner’s discretionary expenses, such as a leased truck, to be considered as income. For example, you have been paying yourself a salary of $50,000, and have been spending $12,000 a year on a leased truck. Your lawn equipment is worth $20,000 for a total of $82,000. That makes your business worth between $82,000 and $103,000.
Meet with prospective buyers to show the list of equipment to be included in the sale such as mowers, edgers and trimmers. Agree on a price and sell the lawn business.
References
As Pioneers Of The Sustainable Lawn Care Industry Were All On The Same Team
As organic and sustainable lawn and landscaping business owners, were all trying to make communities safer, healthier, and more sustainable. We believe you should profit from the sale of your organic lawn care business, and that we can help you maximize that profit with our Transition and Sell Program. Its a simple process thats designed to help you increase your likelihood of selling your lawn care business for a higher profit than you would have as a privately owned company*. Clean Air Lawn Care does not take a cut of your profit.
Check out the three steps to the program below. If youre interested in discussing our Transition and Sell program with us, get in touch!
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How To Structure Your Deal With A Worker
The worker will need to sign an agreement and a restraint of trade for your customers. You also need to give them the bare minimum of information. I would suggest the following.
Do not give them
- Do not give them customer surnames
- Do not give phone numbers
- Do not get them to time the lawns
- Do not give them lawn prices unless the customer pays cash
Do give them
- A day sheet containing the following
- The start and finish time for the day and the total amount paid to the worker
- The addresses
- The job descriptions
- The first names of the customers
I would suggest with cash customers that you get them to leave a sealed envelope with the payment and their address under the back doormat. The worker can pick that up and put them with the job sheet.
Have A Written System For Running Your Business
This is more for the larger businesses then the smaller one but having binders that discuss how you run the day to day operations of your business will be extremely attractive to a buyer. This may also allow you to ask a bit more for your business. Most businesses dont do this but there are major benefits.
Did you know that franchises have more chance of success than traditional business? The biggest reason is that they have systems and manuals for everything.
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Effective Ways To Advertise Your Lawn Care Or Landscaping Business
Entrepreneur
The following excerpt is from EntrepreneursStart Your Own Lawn Care or Landscaping Business. Buy it now from | Barnes & Noble | iTunes
The types of advertising that are most effective for lawn service and landscaping companies include social networking, yellowpages.com ads, business cards, fliers, door hangers, brochures, direct mail and word-of-mouth.
Thinking About Selling Your Lawn Care Business Read This First
Mergers & Acquisitions Advisory Services for Lawn, Landscape and Similar Businesses
If you have built a successful lawn care business, you may have devoted some thoughts to selling it. Business owners consider sales for many reasons. Perhaps, it is time to think about retirement. Perhaps health issues for you or a family member have led you to think about selling. May be you are just tired if it and planning a new professional direction. Maybe you have been very successful and just want to take some chips off the table.
In this article, we use the term lawn care to refer to businesses that primarily engage in fertilization and weed control services.
Lawn care businesses sometimes sell for prices that other business owners can only dream of. A few lawn care companies will sell for more than their annual revenue, but that is not as common as it once was. This article includes hints that will help
What does it take to get the best price for your lawn care business? Here is a run-down if some of the major factors affecting the value of a lawn care business.
Location. Lawn care businesses serving desirable locations, such as thriving growing cities will draw higher prices. There are far fewer potential buyers for businesses based in rural areas.
Customer Density A dense customer base is usually more valuable than a spread-out one. It is even more valuable if a buyer services the same area and routes can be integrated producing even more efficiency.
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What Kind Of Services Should I Offer
Most lawn care businesses have approximately 25 customers they see each week and offers services like these:
- Adding mulch
And of course, these old standbys:
- Mowing
- Fertilizing
- Fertilizer application
As you can see, theres plenty of landscaping services you can offer. Just remember to always provide an superior customer service experience for everyone you do business with.
Cons For A Lawn Business
There are a few issues that you’ll need to consider while planning your business.
- Seasonal: Unless you live in an area where winters arent bad, your customer accounts go into hibernation by mid-October. If you are looking for a year-round business, you will need to find something to diversify your product offering to keep business up and running through the winter.
- Start-Up Expenses: Depending on the type of lawn care business you decide to build out, you will need equipment and something to transport this equipment with. This may require upfront cash and in some cases, a sizable amount.
- Competitive: Open your phone book and you will find a number of lawn care businesses in your area. If the market is too oversaturated, you will find the need to compete on price and this will cut into your gross margins. Research your area and if possible speak to existing lawn care companies about what they are experiencing in your area.
- Some Economic Risk: When economic times get tough, existing residential customers may find the need to cut non-essential expenses, and for many, outsourced lawn care is one of those.
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What Does It Take To Start A Lawn Care Business
Lawn care and landscaping services can encompass everything from cutting grass and watering the lawn to trimming trees, pruning bushes, and fertilizing. Its up to the you as the business owner to decide what services to offer based on your experience and local opportunities. However, all lawn care or landscaping jobs require workers to have some degree of physical strength and stamina, as well as the equipment and training to do the job.
Start Advertising For Spring Services
The earlier you can go to market at the beginning of the year the better, because if youre not getting in front of your customers early on, your competitors are. The good news is advertising traffic during the slower winter months is down due to the lack of initiative most green industry business owners without a marketing plan have. That means there is less to compete for in the advertising space!
So if youre running pay-per-click or paid social media campaigns, your costs-per-click tend to be less and your impression share trends higher. That translates to more exposure for less money!
The trick is advertising with a sense of urgency, which means market services that are time sensitive based on seasonality. Not only do these services tend to have a higher ROI , but the time to have them done in the spring is limited and so are the amount of hours you have in a week.
When running your spring service ads on Facebook or even on door hangers, stress a sense of urgency. For example:
Grow a thick, healthy lawn this year with spring Aeration and Fertilization10% OFF!
There are actually four elements to this ad copy:
- Intent: I stated the service and what the ad was for.
- Offer: I provided an appealing incentive with 10% off.
- Relate: The ad copy related to the customers need or want for a healthy lawn.
- Urgency: The importance of taking action now incentivizes the customer to call now.
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