Would You Buy This $1.1M Landscaping Business?

Welcome to The Main Street Minute, your shortcut to Main Street acquisitions.

👋 Shoutout to the 363 new deal junkies who joined the newsletter last week.

This week: A steady 45-year-old landscaping business hits an unexplainable financial blip… and a prospective buyer has to figure out why.

(ICYMI: If you’re serious about buying or selling your business, BizScout 2.0 is now live.)

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Now, onto today’s deal…

THE SETUP

Emma recently found a 45-year-old landscaping company for sale in Texas. It checked a lot of boxes:

✔️ Long operating history

✔️ Strong relationships with premium homebuilders

✔️ Healthy referral-based growth

✔️ A seller willing to do seller financing

But something clearly didn’t add up.

"I couldn't get the numbers to work out," Emma confessed. Margins in 2023 had mysteriously collapsed, which meant she couldn’t get the list price to pencil.

That single outlier year distorted the cash flow picture and raised bigger questions about pricing and risk.

So she brought the deal to our live buyer call, a weekly teardown session where Contrarian Community members present real deals and get unfiltered feedback from coaches and other operators.

Before lifting the hood, Deal Coach Hants stepped in with an early reminder to always stay grounded in the data:

…And that means understanding the story behind the numbers before making an offer.

THE BUSINESS

The landscaping business had long grown through referrals and long-standing relationships with homebuilders.

Despite being in a seasonal industry, because of the business’s generally warm geography, there’s a reduced risk of extreme seasonal swings.

The listing includes a sizable equipment and inventory base, and the seller is reportedly open to a rare 100% seller financing structure.

But one detail in the financials triggered a wave of questions.

In 2023, margins dropped to around 9%. Margins in 2022 and 2024 appear stronger — closer to 16%-18% — but 2023 remains unexplained.

Without answers, the margin dip can’t be written off as a one-off. It's a question mark hanging over the entire deal…

THE BIG QUESTIONS

Once Emma laid out the deal, the questions started flying, and they weren’t just about price.

Linda, a fellow member and decade-long landscape business owner, pointed to a critical distinction:

She urged Emma to get clear on revenue breakdowns. Is this business steady and contract-based, or constantly rebuilding its book of work?

Then came customer quality: “Are they serving A-class housing, B-class housing, or are they cheap and bottom feeders?”

Ellie raised a different concern. With margins dipping to 9% in 2023, she wondered whether the business could withstand an extreme event like a freeze or freak weather pattern without tipping into the red.

Patrick chimed in with a tactical next step:

Looking at month-by-month data would show how revenue and expenses actually behave over time, and whether 2023 was a blip or a warning.

Then another deal coach, Robert, who has previously scaled landscaping businesses to impressive heights, chimed in. His message was blunt:

Without strong recurring revenue, past performance tells you very little about future cash flow. His rule of thumb? “We like to see some type of recurring revenue in the 60% to 65% range.”

That wasn’t clear from the deal materials, and without it, the whole business is harder to forecast, finance, and defend.

THE INDUSTRY

The residential landscaping industry may look steady on the surface, but dig a little deeper, and it’s more exposed than many buyers think.

Like construction, landscaping revenue often fluctuates with weather, housing starts, and consumer spending. In Texas, year-round warmth reduces risk, but it doesn’t eliminate it.

And remember — in this deal, 2023 is the red flag. Margins cratered, and Emma doesn’t yet know why. That’s why obtaining more historical data is key. As Patrick pointed out, monthly financials can reveal seasonality, unexpected cost spikes, or dips in demand that annual summaries hide:

At a 3.13x SDE multiple, the business is priced 53% above the industry median. Without a clear explanation for the margin dip — or more clarity on recurring revenue — it could be tough to justify paying this premium.

FIXING THE DEAL

The Contrarian Community helped Emma outline the next steps needed to further pressure test this deal and develop her offer:

The Potential Results:

(If you want expert feedback on your Main Street acquisition, click here to learn more about the Contrarian Community.)

THE BOTTOM LINE

Until the big 2023 question gets answered — and until Emma has a clear view of revenue mix — the business can’t be priced with confidence.

What happens next depends on how the seller responds and how much clarity Emma can extract from them.

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