If you want to get into the landscaping business, there can be a lot to consider. If you would like to start from the ground up, you would be able to go ahead and start your own landscaping business with relative ease- some people just want the satisfaction of building their company, and that is great! However, you may want to pop in and pick up a pre-existing company, to avoid some of the earlier growing pains and uncertainty that come with building a company. If you choose this route, you’re not going to want to blindly buy a company- you’re going to want some information, and for that, you’ll need to ask questions! There are several questions you should ask before buying a landscaping business.
5 Questions to ask when buying a landscaping business are:
- Why is this company being sold?
- Do they have insurance?
- What Qualifications, Accolades, and/or Licenses Do They Have?
- What services do they offer?
- What should you do with their employees and equipment?
It is very important to consider these questions before buying any company, especially a landscaping business!
If you have questions to ask, maybe regarding special circumstances in your area, then you’re doing great! If you would like some more basic questions, as well as learn why they could be good questions to ask, then read on! You could find some of this information extremely useful for your landscaping venture.
Why Is This Business Being Sold?
The first, and one of the most important, of all the questions you should ask is “Why is this business being sold?” The reasons for the business being sold are of the utmost importance, as they can be a sign of good or bad business.
If the company is being sold because the owner is retiring, or simply wants to move on to other ventures, the odds are that you’re in the clear! If an owner is retiring, they have probably made good money off the business, meaning the business is most likely to be profitable. If a business is very profitable, it is likely to be more expensive to buy, but you can make the money back easily! A healthy, stable business is the easiest to run and likely to continue to succeed!
If the company is being sold due to bankruptcy or lack of funds, that could be an indication of a huge issue. Why would the business lose money? They could have a lack of customers, or they could be losing business to a larger, more successful landscaping company. At this point, you may feel the need to ask another question- why can this landscaping business not gain or keep customers? Is it because of bad leadership?
Perhaps it’s something that you can fix when you take over, like the company not offering as many services or as good a price as a competitor, or a lack of advertising. Alternatively, it could be something you can’t fix, like a bad location. A landscaping company is going to have far more business in a green, fertile area than a desert, and if they mainly operate in poorer neighborhoods, there are simply fewer people who can afford the company’s services.
Either way, you can understand why this would be an important question to ask- there are a lot of variables that could come into play, and you need to consider all of them to make the move that works best for you! When you ask this question, make sure the owner provides the information quickly and honestly- if they can’t, it’s probably not a great idea to go through with the deal. The best business is honest business, and if something seems shady, you’ll want to back out.
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Does the Business Carry Insurance?
While not as vital, this is also an important question to ask when purchasing a landscaping business. If you simply assume a landscaping business has insurance when you purchase the business, you can be in for a big surprise later on down the road, and not in a good way. Asking if a business carries insurance is very important, specifically because you will want to see if the company has any claims filed for or against them- and if they do, how many, and why? Accidents do happen, but they shouldn’t be constant, and especially not major!
While landscaping and lawn care sound like relatively accident-free businesses, just like everything else, something can always go wrong. Equipment malfunction or a new, inexperienced employee can lead to one or more employees getting injured or equipment being damaged and destroyed. While they seem ultimately safe, a lawn mower can be dangerous in the wrong hands, or if used improperly; a cutting blade can get launched from the lawn mower at high speeds and find itself embedded in a vehicle, building, or worse- a person! All of these things can come with varyingly hefty costs and price tags, and an insurance policy can help minimize that if not entirely nullify it.
Insurance is also a good idea to protect your customers, and many customers will only purchase the services of an insured landscaping business in the first place! If that lawn mower blade shatters a window, a statue in somebody’s yard topples over and scratches their door, one of your work trucks backs into a customer’s car, your lawn mower or an employee’s particularly large foot destroys a few sprinkler heads, having a good insurance policy is a massive benefit, as your customers will be compensated- though they still might not be very happy, depending on how bad the damage is. Accidents happen and all you can hope to do is minimize them, but in the cases where you can’t, that’s where insurance comes in!
Insurance policies can take time to set up, or even take time to take effect- that is why it is a good idea to ask if a landscaping business is insured in the first place. If you knowingly purchase a company without insurance, you can get to work on getting the company insured ASAP- as soon as you get the reins!
It’s important to recognize, however, that insurance policies may not transfer with ownership. You’ll have to look into this yourself, as it varies on a case-by-case basis, and is an incredibly important thing to know!
What Is Full-Service Landscaping? What’s Included?
What Qualifications, Accolades, and/or Licenses Do They Have?
The odds are that you’d know this beforehand, as you will likely want to purchase one of the most reputable landscaping businesses you possibly can, but it’s always a good idea to get as much knowledge as possible regarding your potential purchase!
In the United States, there are several licenses, qualifications, certifications, and endorsements you can get for your landscaping business, though this varies from state to state- depending on the state, as well, these licenses can affect what exactly a landscaping business can do for a customer. In these cases, it’s a good idea to ask what licenses the company has so that you don’t go around, wantonly and illegally doing landscaping things that the company isn’t licensed for.
It’s also a good idea simply for bragging rights! The more licenses and certifications the business may have, the more associations it is a part of, the better the business looks, and the more likely you are to attract customers! These types of things have a sort of pedigree and prestige attached to them, and will do nothing but make the business look better- which is better for you, as you know you’ll be purchasing a strong, good, healthy business.
Much like insurance policies, qualifications, licenses, and certifications may not transfer with ownership, so you will want to look up the details regarding the specific qualifications. Thankfully, even if they won’t transfer to you, things like certifications and qualifications should be easy to re-obtain if you’re a legitimate company!
What Services Do They Offer?
This is another very important question! If you’re buying a landscaping company that only offers things like lawn maintenance and mowing, the odds are that the entire company is set up only for those things, and expanding the business services could require a significant amount of work. If you’re willing to put in that effort, then you’ll likely be fine- but if you’re looking to buy a landscaping business and immediately get to business, consider buying a company that offers more in the first place.
On the other hand, you want to make sure that you can handle whatever the company offers! You may not know how to or are, for any reason, incapable of offering the same services the company would provide before your ownership. If a company ceases offering certain services, they will likely lose customers, putting you in a precarious position as soon as you get started- and nobody wants that!
What Should You Do With Their Employees and Equipment?
It’s not a fun thought, but not every employee gets out of a company being purchased with their job unscathed. You have to consider the value of the company’s employees, especially their relationship with the customers; if you intend to keep the company’s pre-existing contracts, there may be an employee who is particularly beloved by customers. Firing this employee could sour your relationship with these customers while keeping them on could provide a good start to a good relationship with your new customers!
It’s also possible certain employees hold certifications and qualifications that you don’t, making them important to the business being allowed to continue operations as usual. If they’re going to be replaced, you must fill their positions with people who are just as qualified, if not more, in the same places!
In Conclusion
In conclusion, there are several questions to ask when purchasing a landscaping business, and you must ask questions in general! Asking questions grants you insight into the operations of the company, and can help you decide whether or not to go through with a purchase.
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Frequently Asked Questions
Should I buy a landscaping business from a trusted friend?
If buying a landscaping business from a friend, it’s still important to ask questions, no matter how much you trust them. Remember, honest business is good business!
What questions should I ask if I plan on merging another business with a landscaping business I currently own?
The same questions! A merger is still a purchase, and all the operational questions should still apply.
To learn more on how you can start your own landscaping business, check out my startup documents here.
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Meet Shawn Chun: Entrepreneur and Landscape Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a landscape business owner at a job site, driving down the road or anywhere else I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Landscaping Business Boss: I want to help landscape business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.