|From the Editor:
The Sound of Business
|Not long ago, a client made a comment that has resonated with me ever since. He related that he could sit in his second-floor office and tell by the sounds coming from the rest of the facility how business was going. I have known for years that successful business owners usually have some specific way they monitor their business, usually some kind of metric. This is the first time I remember anyone talking about managing their business by sound, but I do remember many sounds in many businesses I have worked with. I have also worked on due diligence for hundreds of transactions and not once have we ever done sound due diligence (no pun intended). What do sounds tell you about your business? Would the sounds of your business be attractive to a potential buyer?
Planet’s Green Industry Conference is next week in Louisville, Kentucky. This is an important event for us and I know for many of our readers. Between the Green Industry Conference, the GIE+Expo and extracurricular activities, there are certainly many memorable sights and sounds. The education and networking opportunities are outstanding and we hope you will be there and we will have a chance to meet. We are staying at the Downtown Marriott and will be in Louisville from Tuesday evening through Saturday morning. If you would like to schedule a time for a private meeting, please email me at [email protected] or call me at 901-351-1510 and we will schedule a time. We will be attending several other events this fall and winter as well, including Landscape Management’s Lawn Care Forum, the Lawn Care Summit cosponsored by Planet and NPMA and the Green Industry Great Escape. We would be happy to meet you at any or all.
As always, if you are interested in buying or selling a green industry business, ready to begin exit planning or considering an acquisition strategy, we would welcome the opportunity to talk.
If your strategic plans include growing your green industry business,here are four reasons you may want to include acquisitions in your strategy now.
Grow Your Business without Growing Your Overhead
Despite an improving economy, landscape contractors are facing some serious issues as they look to the future. A quality affordable workforce is a topic that keeps many contractors up at night. Costs are sure to rise as the labor market tightens in addition to potential costs and uncertainties related to guest worker programs and healthcare reform. It is often very difficult to pass on those cost increases to clients. Growing your business by acquisitions may allow you to grow your business without growing your overhead at the same pace. A larger book of business may also allow you to operate more efficiently.
Break Through a Business Plateau
Do you find your business on a plateau it just can’t seem to break through? Many green industry businesses seem to hit plateaus at $1 million, $3 million, $5 million and $10 million in annual revenues. Owners often talk about how difficult it is to break through such a business plateau. Owners seeking a “tipping point” to break through to the next level should consider making a strategic acquisition. A strategic acquisition can play a role in breaking through to a higher level of profitable growth.
Add a New Service Line or Location
With the economy and prospects for the industry improving, many business owners are considering expansion. No matter what service line or location, you may be thinking about adding, there is usually a lag between the investment and the time that it begins to generate revenue and, more importantly, cash flow. An acquisition may be able to get you up and running profitably with the new service line or location must more quickly than would otherwise be possible.
Take Advantage of Attractive Valuations
Current business valuations are attractive to many business buyers, if not so to many sellers. Buyers may have the opportunity to make acquisitions that really make sense at prices they can afford. The current attractive valuations often make financing easier to obtain than at times when valuations are higher. Though lending markets remain fairly tight, SBA loans are often available to finance acquisitions in the green industry.
If you are thinking about acquisitions and whether an acquisition might make sense in your situation, we would be happy to talk with you.
The Greenery of Hilton Head, SC, has acquired Elliott’s Landscaping of Savannah, GA. Read More.
Noon Turf Care of Marlborough, has acquired Fuller Green Lawn Care of Shrewsbury, Massachusetts. Read More.
Noon Turf Care has also acquired the residential business of Premier Lawn Care, Read More.
Urban Outfitters plans to open its third Terrain garden center and landscaping store at the site of the former Waterloo Gardens in Devon, PA. Terrain was launched in 2008 with the acquisition of Styer’s in Glen Mills, PA and has one additional store in Westport, CT.
If you know of green industry business sales transactions which should be reported in Green Industry Merger & Acquisition News, please contact us.
|Click here for a list of markets with opportunities for business sellers. The primary focus is commercial maintenance, but some design-build may be acceptable. There are also opportunities for lawn care businesses in many markets,
Ron is also quoted extensively in an article entitled “M&A Outlook- Eying Their Moves” by Associate Editor Sarah Pfedderer, also in the October 2013 issue of Landscape Management. Here’s a link to the article.
BizBuySell is reporting a 41.7% increase in small business sale transactions for the third quarter of 2013. Read more.
The franchise sector continues to lead the economy despite regulatory concerns. Read more.
Survey of business buyers and sellers suggest strong business for sale market. Read more.
Best-selling business author John Warrillow will be hosting a webinar on Building a Sellable Business on Wednesday, October 16 at 11:)) am EDT. Register here.
We are currently planning to attend the following events:
Green Industry Conference, Oct. 22-25, Louisville
If you are attending any of these events and would like to meet, please contact us and we will schedule a time.
|Understanding the Value of Your Business is an important step in the Exit Planning Process. Most business owners do not have a clear idea of the value of their business or understand the important factors that drive that value. Understanding the value of your business will help you plan for the future and will also allow you as a business owner to take constructive steps to improve that value over time.
The Principium Group offers a cost-effective approach we call the Market Value Assessment. The Market Value Assessment provides a valuation for your business based on established methods and industry conditions for planning purposes. It also will specifically identify important factors that affect the value of your particular business.
Most green industry business owners expect to rely on their business to fund their retirement or other future activities. However, few have actually built a plan to make that happen. Green Exit University is a cost-effective approach to developing your own exit plan. Isn’t it time you went from thinking about your exit plan to developing it? Enroll now. Click here for more information.
The Sellability Score is a quantitative tool designed to analyze how sellable your business is.
After completing an online questionnaire, you will immediately receive a Sellability Score based on a 100 point scale along with instructions for interpreting your results. We will send you the full report along with a guide for interpreting the Sellability Score in the Green Industry.