Industry Spotlight: Why You Should Buy a Landscaping Business

Buying a landscaping business has strategy investment benefits that many acquisition entrepreneurs aren’t aware of.

Taking ownership of a preexisting landscaping company can generate recurring revenue unlike most businesses.

But there’s more. In this article, we get into the detailed benefits of buying a landscaping business. By the end, you’ll see why you shouldn’t pass up on this opportunity and maybe why you should change your business search to include landscaping.

Thinking About Buying a Landscaping Business?

A landscaping company can be a smart buy if you position yourself quickly enough to take advantage of the industry’s current growth trend.

IBIS World estimates the landscaping industry will grow by 2.1% over the next five years, bringing industry revenues to $84.9 billion.

Also, other statistics show that the American landscaping market will grow at a compound annual rate of no less than 4.5% from 2020 through 2025. With an increased demand for landscape services in recent times as younger households are steadily favoring gardening and lawn care activities, you can expect your business to maintain a steady growth regardless of competition.

Data from the American National Gardening Survey reported that sales made by retail landscaping companies rose from $26.9 billion in 2014 to $47.8 billion in 2018.

These numbers don’t lie. They mean the landscaping business has been steadily booming. And what’s great is that many people aren't aware of this goldmine.

Now, the industry’s growth is not the only reason you should get in on the action. Owning a landscaping business comes with other benefits too, including:

Opportunity for recurrent (seasonal) revenue

The landscaping business is seasonal, significantly in demand throughout summer, and almost anyone can do it.

Owning a landscape business doesn’t have to be a full-time job; even if you decide to offer your services only during summer, you’ll still make a considerable profit.

Of course, there is still an option of operating this business all year long. You can offer winter services like snow removal to help increase profits during the off-season. This also helps to keep on talent for the summer months. 

The chief appeal here is that with a sound business strategy that regards different annual demand cycles, you can build a powerful magnet for attracting recurrent revenue and steady talent in your company

Speaking of demand…

Steady demand

A significant trend to understand in any business is its potential for growth in the months and years ahead. The landscaping industry particularly promises steady demand from clients as it offers many services that are considered necessary aesthetically or otherwise. 

Lawn mowing, landscape design, and construction are standard services delivered by landscapers. They may also offer other services such as snow removal, irrigation installation, pest control, and sprinkler system.

In the past, the demand for these services by homes, businesses, and government-owned public spaces has been a great revenue driver in the industry. 

As economic activity rebounds and people return to workplaces from the late-period setbacks experienced due to the COVID-19 pandemic, there will be a surge in demand for landscaping services for beautification.

More homeowners are appreciating landscape beauty and more are hiring the services of professional landscapers as they are working from home and as they are looking to sell their homes.

Easy business model

The business model here is straightforward. This makes it quite simple for entrepreneurs to copy, franchise, or scale. This is quite different from other trades-based businesses as you won’t need certain qualifications or industry-specific licenses. Also, you don’t require so much to get started, just some quality equipment, transportation, and labor costs.

Since you are buying an existing landscaping business instead of starting from scratch, you can cut back on many things that could be a cause for worry. 

For example, you will not need to buy equipment (except if you must have new ones), and you will have an already established customer base rather than building one.

Opportunities for expansion

Your acquired landscaping business stands a decent chance of surviving if you expand your business services. You can expand by rendering some ancillary landscaping services like fertilizing, pest control, and more.

Also, you can diversify your client base beyond households to include organizations and government offices.

Other options would be:

• Expanding your service area
• Offering off-season services like snow plowing, and
• Hosting landscaping seminars to establish your brand as an authority

These are much easier to incorporate when dealing with an existing landscaping company than a new one.

Flexible management

Do you want to run the company as a one-person business? Absolutely.

Many landscaping businesses make a massive success as a one-person operation. Working by yourself is absolutely an option. You can get out in the sun and perform landscaping services yourself if that’s what you want.

On the other hand, do you want to sit in an office and focus on other areas of operation like marketing and administration? In that case, you can go for the hands-off approach; it is also a great path to success.

Hire professionals who will do the on-the-ground work while you focus on other areas.

Owning a landscaping service is a rewarding business, even if you have no interest in the actual on-the-ground work.

Starting a Landscaping Company vs Buying a Landscaping Company — Which is Better?

Let’s face it, buying a landscaping business provides you with a sturdy base for a quick generation of income than starting a new one.

A new landscaping business requires new equipment, building a solid customer base, sourcing employees, and many more. In contrast, an existing landscaping company can save you from all of those or minimize the stress involved in getting these things done.

Buying a landscaping business helps you channel your energy and drive to other aspects of business growth, such as marketing or service upgrading. Meanwhile, building a new one divides your attention as you strive to achieve too many things at a time. This may, at times, prove daunting and even discouraging.

If you wish to minimize the maintenance cost and maximize profit as soon as possible, buying a landscaping business will be your best bet.

How Profitable Are Landscaping Businesses?

A landscaping business can be highly profitable, depending on factors such as location, services offered, pricing, and operational efficiency. The industry benefits from consistent demand, as homeowners, businesses, and municipalities require landscaping for aesthetics, property value enhancement, and maintenance.

Profit margins in landscaping vary based on the type of service. Lawn care services, such as mowing and fertilization, typically yield profit margins of 15-45%, while more complex services like hardscaping (patios, retaining walls) can reach 50% or higher due to higher ticket prices and specialized expertise. Seasonal demand can impact revenue, but businesses can stabilize cash flow by offering year-round services like snow removal in colder climates.

Purchasing a smaller landscaping company can be a good decision because the operation is leaner and profit margins can be closer to 45%. As the company grows, the margin will likely decrease as operation costs such as equipment and labor increase overtime.

Startup costs range from a few thousand dollars for a small lawn care operation to six figures for a full-service landscaping company with heavy equipment. Once established, recurring revenue from maintenance contracts with residential and commercial clients provides a steady income stream. Upselling additional services, such as irrigation systems, tree care, and landscape design, further boosts profitability.

A well-managed landscaping business can generate six-figure annual profits, with some larger companies making millions in revenue. Key factors influencing profitability include pricing strategy, customer retention, operational efficiency, and marketing efforts. Digital marketing, referrals, and strong branding can significantly impact client acquisition and growth.

Overall, a landscaping business presents a strong opportunity for entrepreneurs willing to invest in quality service, customer relationships, and smart financial management.

5 Important Things to Consider Before Purchasing a Landscaping Company?

If you want to minimize costs and maximize profit, you shouldn’t buy just any landscaping company put up for sale.

It would be best to consider specific measures and factors before buying one.

1. Status of equipment

Landscaping machinery/pieces of equipment are subject to wear and tear. So in your evaluation of the business, pay attention to when the equipment was bought, how often they are being used and serviced. 

It is also important you find out if they got the equipment on rent or lease and the terms of that ownership. Ideally, evaluate the inventory of equipment — request for pertinent details in any inventory provided. 

There should be comprehensive information about the equipment, the warranty placed on them, how extensively they are being used, and how much servicing and maintenance they require.

2. Existing customer base

This factor needs to be carefully considered against the type of landscaping services you wish to render. At best, you should aim for a landscaping company with a mix of residential and commercial clients. This can ensure you have clients all year long and provide you with a blend of small-scale and large-scale landscaping contracts.

Having an existing customer base will help you glide smoothly into operation. You only have to continue from where the previous owner stopped. And if you are good at what you do and have excellent customer relations, these pre-existing customers of yours will bring others!

3. Previous business insurance coverage

This may be hard to remember but is very important. You should find out what insurance coverage is standing for the company and if the organization has built interactions with previous insurance companies.

Ensure you understand all legally standing insurance contracts and ask questions where possible to ensure your business is properly covered.

4. Current employees

Retaining the business’s current employees has almost the same advantage as having an already existing customer base. However, you should critically review the records of your new employees. Are they satisfied working there? Do they consider the work environment, salary, and wages as ideal?

Having one-on-ones with the current team after you step into leadership can give a real insight into how the company is being managed and how you can improve. 

Answering questions like this can subtly hint you on whether you should buy the company or not. It helps you decide if you will need to improve employees’ working conditions to get the best.

5. Business reputation

A business with a poor reputation is going to be too difficult to operate. Companies with excellent reputations attract better customers, and they are considered as providing more value. 

Their clients are more loyal and buy broader ranges of products and services. This is why you need to properly investigate what people are saying about the landscaping company you wish to purchase.

A good place to start is online home service marketplaces like Google My Business, Yelp, HomeAdvisor, and Angi. Search for the business name and see what people are saying about them.

How to Purchase a Landscaping Business

Ready to take the next step can be tough. Purchasing a landscaping business requires careful planning and due diligence. The first step is researching the industry and identifying the type of landscaping business that aligns with your skills and investment thesis.

You may want to focus more on residential lawn care and purchase a lawn care business. Especially if you want something that is easier to manage vs a robust full service landscaping business. Maybe you're better with developing B2B relationships and want a commercial landscaping business. Having a full service business that covers irrigation, yard cleanup, landscape design, and more can be beneficial to keep a client long term. You need to decide what works best for you before proceeding.

The next step is to conduct market research to understand local demand, competition, and pricing trends. Once you identify potential businesses for sale, review their financial records, including revenue, expenses, and profit margins, to assess profitability.

Once you know the type of landscaping business you want, you need to search for off-market vs on-market listings. After that, you should perform due diligence on the business's assets, processes, and market to see if it is a good fit for you. Our guide on how to buy a business has more details on finding businesses, due diligence and more.

The final steps for purchasing a landscaping business tend to be the following:

• Submit an LOI (letter of intent)
• Complete a QoE (quality of earnings report) on the business and evaluate the business in further detail
• Develop a business plan and start to secure financing for your business purchase
• Submit an FID (final investment decision)
• Secure financing through an SBA loan, investors, and/or private loans
• Acquire the landscaping business 🙂

Our guide on how to buy a business has more details on finding businesses, due diligence and more. As you can imagine, there is a lot involved with purchasing a business.

Key Takeaway

Landscaping is a unique service that allows for both seasonal and all-year-round commitment.

In recent times, the demand for landscaping services has increased and even expanded to include more service options. Owning a landscaping business provides you with more potential for growth and revenue build-up than many home service businesses. Are you looking to buy a landscaping company? Start here. Get guidance and proven systems to acquire and grow the company.