Industry: Landscaping Services
Naics: 561730
Landscaping services - a business that's literally about making things grow, including profits.
First, the numbers: We're looking at an industry that's been on a growth spurt, with a 4.7% CAGR over the past five years, hitting $150.4 billion. That's not just mowing lawns - that's serious green.
Now, 2023 saw a slight 0.4% dip. But here's the thing: in landscaping, like gardening, sometimes you need to prune to promote healthier growth. And that's exactly what we're seeing.
For business brokers and potential buyers, here's the dirt: demand for landscaping rises with disposable income, so does the demand for that perfectly manicured lawn.
The real money? It's in institutional and commercial clients and recurring revenue. These clients are the equivalent of planting a money tree in your business. If you're looking at a landscaping company, check their client mix and contracts. A healthy portion of commercial and recurring contracts can significantly boost valuation.
To current owners thinking of selling: Your ability to weather the recent interest rate storm could be your best selling point. Have you diversified your services? Embraced water-saving technologies? These factors could make your business stand out in a sea of green.
Looking ahead, we're projecting a 2.8% CAGR over the next five years, potentially hitting $172.9 billion by 2028. It's not the rapid growth we've seen before, but in landscaping, slow and steady wins the race.
Here's the insider perspective: Keep an eye on nonresidential construction. As it grows, so does the demand for large-scale landscaping projects. The firms that can handle these complex jobs are the ones poised for the biggest growth.
For potential buyers: Look for companies that have successfully navigated the shift from residential to commercial clients. Have they invested in equipment for larger jobs? Do they have the expertise to handle complex projects? These are the ones positioned to thrive.
In landscaping, you're investing in a business that's essential to property values, corporate image, and even urban climate control. It's a deceptively complex industry that requires a keen understanding of both horticulture and economics.
In the end, the landscaping industry is: diverse, resilient, and with the potential for beautiful returns if tended properly. Whether you're buying, selling, or brokering, understanding these nuances is key to cultivating the best deals in the business.