Landscape Management, October 2012
which the business resides stability of workforce and structure of the management team strength of a companys balance sheet and strong fnancial reporting and operating systems 3 The amount of purchase price determines whether a deal gets done Each deal is unique In every transaction there are motivating factors for sellers and buyers Owners need specifc answers to the following questions What are your goals Have you quantifed them Whats your timeline Whats the market bearing What are the tax consequences Is the company built and positioned to be marketable If you keep operating the way you are what impact will time have on your value What risks exist in my industry and business A sound exit strategy often is time executed and planned throughout a 24 month period Market conditions have an impact on deal structure which means how and when someone gets their money Structure kills more deals than valuation or purchase price which can include or exclude balance sheet adjustments debt and working capital require owner fnancing include exclude real estate and involve employment agreements and noncompetition arrangements Often earnouts or payouts are tied to proft or revenue Getting paid 100 percent cash at closing is rare because of economic conditions pricing and competition however conditions and terms are negotiable Your deal and structure only will be as good as the team who negotiates it Beware the industry is full of pretenders If an advisory team hasnt closed more than 12 deals in the Green Industry keep looking Make sure your operating plan coordinates with your exit strategy and get it done LM Harkness is a landscape management consultant with 3PG Consulting Contact him at jeff@ 3PGConsulting com QUICK TIP Beware of the talk that private equity is a great option and readily available Know who you are and what options are in play for your company AND GET UP TO 1000 PER MOWER TO PROVE IT Take part in our Propane Mower Incentive Program and get 1000 back for each new qualifying propane fueled mower purchase or 500 back for each qualifying mower conversion In return youll tell us about your experience for one mowing season For more information see your mowing equipment dealer or visit poweredbypropane org Some restrictions apply See rules at poweredbypropane org Sponsored by Propane Education Research Council OCTOBER 2012 LANDSCAPEMANAGEMENT NET 25
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