Want to sell to private equity one day?
You need to start doing this today
Sep 6, 2024
I recently attended Lawn & Landscapes Builders Summit a networking event for landscape business owners and bankers. Most people at the conference were either looking to acquire landscaping companies, or to know how best to prepare their business to be acquired. The businesses ranged from about $3.5M in revenue to about $30M a year in revenue.
The key to selling your business comes down to three words: recurring cash flow. People who are buying your business want to know that you have a steady stream of cash coming in the future, even if you decide to step away.
3 words to remember if you are selling to private equity: recurring cash flow
Here are three things you can do to make sure that you have recurring cash flow:
Lead with a contract
Get a request for a simple mow, trim and blow? Send the customer a proposal that has two options: a one-time job, or a 6 month contract for a biweekly service. The more customers you have on contract, the more attractive your business will seem to private equity. In Duranta, it’s takes less than 5 minutes to go from an address to create a proposal for your customer. And you can even offer multiple options in one proposal, and have the User pick whichever one they prefer.
In Duranta, it takes less than 5 minute to go from an address to create a proposal for your customer
Price appropriately
To get people onto a contract, you might want to offer a discount for signing up for a contract. How much of a discount? Well, mathematically, the discount you should offer should be related to the probability that the customer would not come back to you after using your services once. In practice, a 10% - 15% discount is probably a good rule of thumb to go with.
Consider a 10% - 15% discount to incentivize someone to sign up for a contract
Be professional
To sign a contract, a customer needs to be able to trust that you will do what you promise. The first way to build trust is by being professional, in how you speak, how you present yourself and how you do the work. Duranta allows you to create beautiful proposals on your phone, that look extremely professional. Customers like to see the work you will be doing for them, and to feel like they are in great hands.
A client judges you both by the content and the appearance of a proposal
-Sam
I recently attended Lawn & Landscapes Builders Summit a networking event for landscape business owners and bankers. Most people at the conference were either looking to acquire landscaping companies, or to know how best to prepare their business to be acquired. The businesses ranged from about $3.5M in revenue to about $30M a year in revenue.
The key to selling your business comes down to three words: recurring cash flow. People who are buying your business want to know that you have a steady stream of cash coming in the future, even if you decide to step away.
3 words to remember if you are selling to private equity: recurring cash flow
Here are three things you can do to make sure that you have recurring cash flow:
Lead with a contract
Get a request for a simple mow, trim and blow? Send the customer a proposal that has two options: a one-time job, or a 6 month contract for a biweekly service. The more customers you have on contract, the more attractive your business will seem to private equity. In Duranta, it’s takes less than 5 minutes to go from an address to create a proposal for your customer. And you can even offer multiple options in one proposal, and have the User pick whichever one they prefer.
In Duranta, it takes less than 5 minute to go from an address to create a proposal for your customer
Price appropriately
To get people onto a contract, you might want to offer a discount for signing up for a contract. How much of a discount? Well, mathematically, the discount you should offer should be related to the probability that the customer would not come back to you after using your services once. In practice, a 10% - 15% discount is probably a good rule of thumb to go with.
Consider a 10% - 15% discount to incentivize someone to sign up for a contract
Be professional
To sign a contract, a customer needs to be able to trust that you will do what you promise. The first way to build trust is by being professional, in how you speak, how you present yourself and how you do the work. Duranta allows you to create beautiful proposals on your phone, that look extremely professional. Customers like to see the work you will be doing for them, and to feel like they are in great hands.
A client judges you both by the content and the appearance of a proposal
-Sam