Ron Edmonds (founder of Principium Group) was a guest speaker at one of my peer groups recently, and shared some valuable tips for buyers and sellers of landscape firms.
Here are some of the takeaways, as shared (to me) by some of my clients who attended this peer group meeting.
Doug Taylor (Frontier’s, Ontario) reported: De-risking the business as it pertains to the weight of relationship-based marketing versus active lead generation … I can see need to build the marketing engine outside of my (the owners’) direct relationships and word-of-mouth.
Dennis Evans (Quiet Village, St Louis) stated: Being proactive looking for acquisitions is a way to grow the business, but just like in marketing, be ready for tire kickers.
Martin Silverman (Martin John Company, Chicago) learned that a typical brokers fee could be in the 8-10% range, and that business are even more valuable once they reach 10 million in sales typically.
Brandon Lair (The Site Group, Ohio) observed that some of the “same things that make your business more profitable creates more value for investors.” Hoo ya!
Will Seiler (Seiler’s Landscape, Ohio) shared five personal takeaways from Ron’s talk on how to de-risk his business (with some comments from me)
- Quality accrual-based data. Keep it clean! (which is what we teach in The Leader’s Edge; true accrual based accounting. Always have a set of books that shows the true performance of the business, not laden down with owners perks.)
- Continue to grow and consistently break through barriers and plateaus (which we preach and show how to do in every meeting)
- Have a true 2IC/Second in command in place (a common topic we address: how to develop a Relationship Contract between owner and their 2IC.)
- Systemize the business, document the process! (a recurring topic of our meetings is sharing best practices and proven systems)
- Make your DB Business “look” recurring. (easy to do when you see the value of doing so.)
Rob Morel (Morel’s Landscape, Cleveland) learned “the importance of clean data, plus knowing the reasons someone is selling their business; find out these reasons early in the process.”
Traven Pelletier (Lotus Gardenscapes, Michigan) summed it up nicely, “It was helpful to hear from the business buyer’s perspective. It was particularly reassuring to learn that what we are doing (in our peer group) to become top tier is also creating that solid foundation that an investor is looking for!”
There were many other topic takeaways, including the importance of steady growth on percevied value. Hopefully you can take one from this list above to start working on, to make your business more valuable.
Your Challenge: Look at your business as an investment
Even if you plan to “retire in place” (a topic I have written on and spoken about here), you still want to make your business eminently valuable.
With value in mind, consider these two questions.
1. How fast is the value of your business growing?
2. Is your business set up so that your team can run it without you in the day to day?
Happy Valentine’s Day! Remember who has supported you in your success!