Buying A Business
Whether you are considering building a landscape-related business from the ground up or buying an already existing company, below are seven significant advantages to buying a proven landscape business to consider when making this decision.
Reasons to Buy an Existing Landscape Related Business
1) An already established business has actual operating results. A business that has been owned and operated for a number of years and has provided the source of income to the family of the owner may reasonably be considered a profitable and viable business.
2) There is immediate cash flow. A minimal amount of working capital is required to continue the business. Sales start the first day you assume ownership of the business.
3) Trained employees are already in place. Trained & experienced employees are a part of your team the day you assume ownership of the business. There is no cost for training which translates to no dissatisfied customers.
4) There are established suppliers and credit. Existing vendors will usually continue to do business with the new owner. They have been supplying the business for some time and know it is a good business.
5) There is an existing customer base. You assume an existing customer base that will grow through referrals from satisfied customers.
6) There are existing licenses and permits already in place. If applicable, some licenses and permits can be transferred to your name. If not, in most cases the seller will continue to qualify the business for the applicable license (such as Irrigation, Pest Control, etc.) until such date you can successfully apply & obtain the license.
7) The Seller will provide training. The seller will train you in the operation of the business, so you benefit from his experience in running the business. You will be introduced to customers and suppliers.
About The Buying Process
Landscape Depot Investment’s team of intermediaries offers you the unique insight that comes from their experience representing both buyers and sellers, specifically in the Landscape Industry. Whether you are acquiring a lawn care business for $100,000 or a large landscape management company for several million dollars, our intermediaries are highly skilled in the process of acquiring a business, how the business is valued, and in the negotiation process. We will help you understand how the value of a business is derived; help you understand the process of making offers and buying the business; and help you negotiate and close the deal, possibly saving you thousands or tens of thousands of dollars in the process.
How The Buying Process Works
Step 1: Schedule a conference call with Landscape Depot Investments to discuss what you are looking for.
Step 2: Evaluate the basic SUMMARY information for each business and determine which business you have the most interest in.
Step 3: Sign a Confidentiality/Non-Disclosure Agreement (NDA) for the business(es) you are most interested in and complete a Buyer’s Available Capital (BAC) form.
Step 4: Landscape Depot Investments will then give you detailed information regarding the Business for your review and consideration. Do your preliminary evaluation based on the information provided by the seller to Landscape Depot Investments and to you. Do NOT expect the seller to provide detailed financial information (bank statements, contracts, complete tax returns, etc.) at this time.
Step 5: If still interested, Landscape Depot Investments will arrange a conference call or in-person meeting with the Seller. You may ask general or probing questions on anything and everything about the business, but this is NOT the time to negotiate price and terms.
Step 6: Make an offer assuming that all the information you have been provided is correct. Landscape Depot Investments will show you how to write a contingent offer that will protect you and allow you to verify all information.
Step 7: Negotiate price, terms, and conditions. Landscape Depot Investments will mediate all offers and counteroffers until a purchase agreement is reached between the parties.
Step 8: Complete your Due Diligence. Due Diligence begins when the offer is accepted by the seller. Once a purchase agreement is accepted by both parties, you will make a closer investigation of the business to confirm, to your satisfaction, the validity of your offer. Typically, two (2) weeks for small businesses and four (4) weeks for larger businesses of Due Diligence is the norm. This is when the seller will provide all of the detailed information you require. You must NOT communicate with the employees, vendors, and clients of the business without specific authorization from the seller.
Step 9: Have documents prepared for closing. The closing attorney will not represent either party. The closing attorney drafts all necessary legal documents to comply with the written purchase agreement. The cost of the closing attorney is split 50/50 equally between the buyer and seller.
Step 10: Close the purchase and begin your first day as the owner of your own business. The seller will assist in an orderly transition as agreed in the purchase agreement.
Step 11: Congratulations! You are part of the American dream – You now own your own business!!
