Lawn Mowing Business Valuation Checklist (Australia)

The Complete Lawn Mowing Business Valuation Checklist

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Phase 1: Initial Screening

Use this before you invest time in detailed due diligence. If the business fails here, move on.

• Revenue is verifiable — seller can provide bank statements, not just a profit and loss summary
• Business has been operating for at least 3 years (shorter history = harder to assess stability)
• No single customer represents more than 25% of total revenue (high concentration = high risk)
• Asking price is within a plausible range — under 3.5x annual SDE for a sole trader, under 4.5x EBITDA for a staffed business
• Seller has a clear reason for selling (retiring, health, relocation) — not "needs a change" or vague
• Business is operating in a geographic area you're willing to service or manage staff in
• You've confirmed the business is not a franchise (or if it is, you've obtained the franchisor's resale approval terms and ongoing fee structure)
• No pending legal disputes, ATO debt, or council compliance issues (ask directly; verify later)

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Phase 2: Financial Verification

Request three full years of financial records. Do not accept a single year or a profit and loss prepared by the seller's accountant without cross-referencing to bank statements.

Revenue verification:

• Obtained 3 years of business bank statements and matched to the profit and loss
• Revenue trend is stable or growing (declining revenue requires explanation and a price reduction)
• Seasonal patterns are accounted for — if the business is in Victoria or South Australia, confirm what the winter dip looks like
• One-off revenue (equipment sales, grant income, non-recurring jobs) has been identified and excluded from the recurring revenue base
• Revenue split between residential and commercial is documented and confirmed

Expense verification and SDE normalisation:

• Owner's wage or drawings are identified and added back to profit to calculate true SDE
• Personal vehicle costs (owner's personal use proportion) are identified and removed from expenses
• Family member wages at above-market rates are adjusted to market equivalents
• Equipment purchases that should be depreciated over multiple years are not being fully expensed in a single year
• Calculated normalised SDE: $_______ (this is the number you apply a multiple to)

Tax and compliance:

• Confirmed business is registered for GST (required over $75,000 annual turnover)
• Confirmed no outstanding ATO debt or payment plans (obtain an ATO clearance letter at settlement)
• BAS lodgements are up to date for the past 3 years
• Payroll tax obligations have been met if the business has employees

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Phase 3: Customer Quality Assessment

The customer list is the core asset of a mowing business. Spend more time here than anywhere else.

Customer list basics:

• Obtained a full customer list with name, address, service frequency, and annual spend per client
• Confirmed average client tenure — ask for the date each client joined
• Average client tenure is greater than 2 years (shorter average = higher churn risk)
• No single client represents more than 10% of revenue (5% is better)
• Residential clients booked through a system (scheduling software, website) rather than exclusively via the owner's personal phone

Commercial clients (if applicable):

• Obtained copies of all commercial contracts (strata, aged care, council, commercial property)
• Confirmed contract expiry dates — none expire within 3 months of settlement without renewal options confirmed
• Confirmed whether contracts are transferable to a new owner (many are not automatic — check the assignment clauses)
• Verified that commercial contracts were not signed on personal relationships that won't transfer

Retention risk:

• Confirmed how clients are billed (direct debit or invoiced is better than cash collected on the day)
• Asked whether any of the top 10 clients have a personal relationship with the owner that may not transfer
• Assessed the proportion of clients who have specifically requested to continue with the business under new ownership (for larger sales, a short survey is reasonable)

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Phase 4: Equipment and Assets

Mowing businesses live and die on their equipment. Poor equipment condition is both a cost and a signal.

Vehicle(s):

• Identified all vehicles included in the sale (make, model, year, kilometres)
• Confirmed ownership status — are they owned outright or subject to a chattel mortgage or lease?
• Obtained an independent mechanical assessment for any vehicle over 5 years old or 150,000km
• Confirmed registration status and any outstanding fines or infringements

Mowing equipment:

• Full list of ride-on mowers, push mowers, and trimmers included in the sale
• Service records obtained for major equipment (ride-ons, zero-turns)
• No major equipment item is approaching end of serviceable life without negotiated price adjustment
• Blades, belts, filters, and consumables are in reasonable condition (walk the equipment, don't just read the list)

Trailers and other assets:

• Trailer(s) included, with registration confirmed
• Fuel containers, safety equipment, signage, and branded materials included
• Any software licences, scheduling systems, or customer databases are transferable

Estimated equipment replacement value: $_______

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Phase 5: Operations and Staffing

For sole trader rounds, this phase is brief. For businesses with employees, it matters a lot.

Sole trader round:

• Confirmed all work is currently performed by the owner (no casual labour that isn't documented)
• Assessed how physically demanding the round is and whether your fitness or plan for operators matches
• Confirmed the owner is willing to work with you for a minimum of 4 weeks post-settlement to introduce you to clients

Business with employees:

• Obtained copies of all employment contracts
• Confirmed award classification for each employee (Gardening and Landscaping Award or relevant state award)
• Leave entitlements accrued and confirmed — these become your liability at settlement unless negotiated otherwise
• Confirmed which employees know about the sale and their indicated intention to stay
• Confirmed superannuation is up to date (SGC compliance — obtain a clearance)
• Assessed whether any employee is effectively the face of the business in ways that create key person risk

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Phase 6: Valuation Calculation

Use this section to work out your offer range before you enter negotiation.

Step 1 — Calculate normalised SDE or EBITDA:

• Normalised SDE (owner operator): $_______
• Normalised EBITDA (if the business has employees and you're replacing yourself with a manager): $_______

Step 2 — Determine the appropriate multiple:

Apply the relevant multiple based on the business profile:

• Sole trader mowing round, under $100,000 revenue: 1.5 to 2.5 times SDE
• Solo operator, $100,000–$300,000 revenue, established client base: 2 to 2.5 times SDE
• Small business, 2–4 staff, $300,000–$700,000 revenue: 2.5 to 3.5 times EBITDA
• Established multi-crew business, commercial contracts, over $700,000 revenue: 3 to 4 times EBITDA

Adjustment factors:

• Add 0.25 to the multiple if commercial contracts represent more than 40% of revenue and are transferable
• Add 0.25 if average client tenure exceeds 4 years
• Subtract 0.5 if owner dependency is high (personal relationships with key clients)
• Subtract 0.25 to 0.5 if major equipment needs replacement within 12 months
• Subtract 0.25 if revenue has declined in the most recent 12 months

Selected multiple: ___

Step 3 — Calculate your valuation range:

• Low end (floor): Normalised earnings x lower bound of multiple = $_______
• High end (ceiling): Normalised earnings x upper bound of multiple = $_______
• Subtract known capital expenditure requirements: $_______
• Adjusted offer range: $_______ to $_______

Step 4 — Check the price against the asset value:

• Total equipment and asset value: $_______
• If the asking price is less than the asset replacement value, the goodwill element is effectively free — strong buy signal
• If the asking price is more than 4x the asset replacement value, make sure the customer retention assumptions are realistic

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Phase 7: Red Flags and Deal-Breakers

Walk away without shame if you encounter:

• Revenue cannot be verified from bank statements — the seller says the accounts "don't reflect reality" but bank statements don't match the P&L figures shown
• Cash income that can't be traced — if a meaningful proportion of income is cash-in-hand with no corresponding bank deposits, you can't rely on the revenue figures
• Seller refuses to provide a full customer list — standard practice in the industry; refusal is a red flag
• Key commercial contracts are non-transferable — if the contracts can't move to you, the commercial revenue doesn't exist after settlement
• Outstanding ATO debt that can't be resolved at settlement — walk unless the debt is fully cleared before or at settlement from the seller's proceeds
• Equipment is subject to finance the seller can't discharge at settlement — you'd be inheriting the asset but also the debt, often without realising it
• Seller insisting on "goodwill" payments above the business's earnings capacity — a round that earns $60,000 a year is not worth $300,000 no matter how much the seller thinks it is
• No seller transition period offered — in a mowing business, the seller introducing you to clients is non-negotiable; a seller who won't provide it is protecting something

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For the full valuation methodology and the industry-specific multiple ranges, see the Playbook Module 4 — Valuation and Pricing.