Two weeks ago, Tom Fochtman, Ceibass CEO, was a guest speaker at Jim Huston’s outstanding Brainstorming Meeting in Jackson Hole, Wyoming. The theme of the meeting was How to Build and Exit a Great Company.
And in last week’s blog we made Tom’s PowerPoint at the event, entitled How to Enhance the Value of Your Business Enterprise, available to lawn & landscape business owners.
Well, response to our offer was so great that we have chosen to publish some of the highlights from Tom’s presentation in this week’s and next week’s, blogs. Below are some of the highlighted best practices covered in the presentation to enhance the value of your business.
It is vital to have records as clean and straightforward as possible.
- Break out your service lines.
- Break out your costs.
- Perform job costing
- Your CPA must bless the financials.
- Create WIP (work in progress) report for installation work.
- If the above are met, the buyer’s due diligence period will be shorter. If not, expect a longer process and decreased value.
If the owner is the “face” of the company, a prospective buyer will worry that some of the accounts will leave and employees may not stay. This results in a significantly lower multiple.
- Remember: A+ Management Teams bring a higher multiple as the buyer is confident the team and accounts will stay in place.
- Invest in your management team.
Stay current with your fleet. Nothing says “discount” faster than all of your trucks with over 100,000 miles.
- This is also true for equipment.
- If a buyer thinks they have a large capex expense, they will reduce the offering price.
Have your sales team sell with density in mind. You should have a density map with all of your job locations.
- Say “no” if the job is an outlier.
- Axiom: Less windshield time = more profits.
- Remember: UPS mostly makes right turns.
- Dense routes reduce fleet mileage and expense.
More to come next week.