Preparing for Sale
Thinking about selling your landscaping business? Who should you get to help you with this most important event in your/your business’ life? When you start researching you will find dozens of different entities looking to be your advisor/intermediary/broker/ etc. There is a difference among us (Harvest the Green does this work too). Here’s a description.
Business broker/business advisor
Business brokers work with companies at the “smaller” end of the market – total price of $1-3 million (sometimes up to $5 million, depends on the company). This is the “enterprise value” or the gross sales price—not the annual revenue. Business brokers, in the best case, are members of professional organizations, well-educated and very experienced in working with small businesses. Many have owned their own businesses and decided to help others sell. It takes a unique mix of people skills, business knowledge, project management and deal-making skills to get deals closed in an effective manner. In many cases, business brokers “list” a business (similar to real estate and, in some states, requiring a Real Estate Brokers’ license). When you see businesses listed on BizBuySell or other websites, you will be dealing with a business broker. Fees are usually lowest, and levels of service will vary.
Harvest the Green Partners offers the best option for selling companies in the landscaping industry who have revenues between $1.5 million and $25 million.
M&A firms are usually working with the next tier of sellers and buyers, usually privately held, but more sophisticated and larger in scope. They will work with Private Equity firms and Family Offices among others. The deal team will consist of senior executives with supporting “back offices” of financial analysts and other support staff. Team members will often be individuals who left investment banking firms to be closer to the action themselves. Clients of M&A firms are usually working with more sophisticated deal structures and financing. Fees usually are monthly (to cover their additional levels of overhead) plus success fees.
At the top of the food chain are investment bankers. Our industry is probably not too attractive to this group right now due to the fragmented nature and low barriers to entry. (No entity worth more than 2% of the total—and that’s Brightview—the only one that’s public).
Your personal financial planner/tax advisor is an important participant in this process.
As always, if you would like to have a confidential conversation about your situation, please feel free to give me a call or email. Alison Hoffman 224-688-8838 [email protected]