Due Diligence on Landscaping Company

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November 01, 2023

by a searcher from Columbia University in West Palm Beach, FL, USA

Any advise on due diligence questions and/or checklist's for a landscaping company in Florida.

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Reply by an intermediary
from Oklahoma State University in Memphis, TN, USA
.We work in this space every day. Most of these comments are right on target.

Recent changes to Florida rules expand the e-verify requirements. This may have increased the use of casual labor and independent contractors who may or may not qualify. as such. You sometimes also run into labor organizations that purport to shield you from the risks of ineligible or misclassified employees. I would be super-careful about that. The doomsday scenario is taking on service contracts and then not having the workers to serve the customers.
Other than labor, understanding who "owns" the customer relationships is vital. Having a solid plan for introducing a new owner to the mix is vital to success if the seller is key to customer relationships. If someone else in the company "owns" many customer relationships, you need to access the risk of reliance on that person.
Someone commented on capex requirements. That is an important area to focus on. One thing I would point out is that if there is a need to update the fleet, there may be an offset by having lower, potentially much lower, repairs and maintenance.
I'd be happy to discuss this ok landscaping business due diligence further if desired.
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Reply by a searcher
from Cornell University in Venice Beach, Los Angeles, CA, USA
Equipment list, age of equipment, capital expenditures (maintenance vs. growth). Contract lengths, length of customer relationships, do big customers go out to bid often? Customer reviews. Labor - employee verification/legality, and turnover. I've worked with a number of landscaping and janitorial businesses, industries with incredibly high employee turnover. Anybody can clean an office or mow a lawn, so the real differentiator is in the systems/processes and the employee management/culture. Are they dependable? Do they have low employee turnover? Are they investing in their employees, and is that reflected in customer reviews & employee turnover?
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