Industry guide
Landscaping and lawn care
Recurring maintenance routes can be dependable. The value depends on crews staying and equipment holding up.
What drives value
- Recurring maintenance contracts, residential or commercial, renewed year after year.
- Route density. Customers clustered close together mean more stops per day and less fuel.
- Commercial accounts such as property managers and homeowners' associations, if they are spread out and under contract.
- Add-on services like irrigation, fertilization and seasonal cleanups that raise revenue per customer.
Where the risk hides
- Equipment. Mowers, trucks and trailers wear out quickly. Depreciation is added back to SDE, but replacement is a real cost. Get an equipment list with ages and set a capex reserve.
- Crew turnover and labor availability, especially in peak season.
- Seasonality. In many regions revenue drops sharply in winter. Snow removal can smooth it but brings its own equipment and weather risk.
- Commercial concentration. A single property manager can control many accounts and move them at once.
- Contract terms. Many maintenance agreements can be canceled with short notice. Read them.
- Chemical application licenses, where required, may be personal.
Questions to ask
- How many customers are on recurring contracts, and what is the annual retention rate?
- What share of revenue comes from the top ten accounts, and who controls them?
- What is the age and replacement cost of each major piece of equipment?
- How long have crew leaders been with the company?
- What does revenue look like month by month across three years?
- Which licenses are required, and who holds them?