Established Commercial & HOA Grounds Maintenance Company, 25-Year Central Indiana Contractor

$1.1M

Revenue

$594K

SDE

2.5x

Multiple

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Full Editorial Writeup

This is a Central Indiana commercial and HOA grounds maintenance operation with a 25-plus-year track record and a dense, geographically concentrated route network. The core work is mowing, lawn care applications, mulching and bed maintenance, seasonal cleanups, and snow and ice management. Roughly 90% of revenue comes from commercial and HOA clients, and 85-90% is recurring or contracted across about 95 accounts, with in-season monthly recurring revenue near $100,000.

What separates this business from a typical mow-and-blow operator is contract quality and margin. Commercial agreements run two to three years with built-in annual escalators and fuel surcharges, so pricing steps up automatically instead of requiring an annual re-negotiation. Customer concentration is low, no account exceeds about 5% of revenue and the top 10 represent only about 30%, and 70 accounts have stayed five years or longer. Adjusted cash flow has run 40-55% of revenue over the last four years, a dramatic outlier against an industry average profit margin near 7.9%.

The asset base is clean. Fleet and equipment are owned outright and debt-free with no loans, leases, or UCC filings, and they convey at closing. The business has never spent a dollar on advertising, growing entirely on referral and reputation. The owner is retiring and offering a 3-6 month transition, and routes are clustered within four sections of a single metro with only 5-10 minutes between stops.

Why we like it

Earnings quality is exceptional for this industry. Adjusted cash flow has run 40-55% of revenue over the past four years and hit 54% in 2025, against an industry average near 7.9%, which means this operator is roughly seven times more profitable than typical peers. Combined with 85-90% recurring or contracted revenue, the earnings base is stable and predictable rather than project-dependent.
The moat is contract structure plus route density. Commercial agreements run two to three years with annual escalators and fuel surcharges built in, so pricing rises automatically and inflation is passed through. Routes are clustered in four sections of a single metro with only 5-10 minutes between stops, which compresses drive time, fuel, and labor cost per account in a way scattered competitors cannot match.
Customer concentration risk is genuinely low, which is rare at this revenue scale. No account exceeds about 5% of revenue, the top 10 represent only about 30%, and 70 of roughly 95 accounts have been customers five years or longer. That stickiness plus a 25-year profitable history means the revenue is durable and the switching friction for clients is real.
The assets are clean and the deal is simple. Fleet and equipment convey debt-free with no loans, leases, or UCC filings, so the buyer inherits productive hard assets without a financing overhang or a required capital outlay on day one. At 2.53x cash flow this is a fair price for a business with these margins and this contract book.

How to improve it

Turn on the snow and ice line that is currently being turned away. Management already flags snow and ice as one of the two highest-margin services and is regularly declining work for lack of crew and equipment. Adding one properly equipped winter crew converts refused demand into high-margin off-season revenue on assets that would otherwise sit idle.
Bring irrigation in-house. Irrigation and tree work are currently subcontracted at roughly $60K of revenue against $20-30K of cost, and management estimates irrigation alone could represent $50-65K if internalized. Hiring or cross-training a technician captures that margin spread and gives existing accounts one more reason to stay.
Add crews to unlock the stated capacity. Management estimates the existing operation supports $1.1-1.4M of revenue with added crews and no facility investment, so labor is the single binding constraint. Building a repeatable recruiting and retention pipeline, plus modest wage or referral incentives, lets you push toward the top of that range without new overhead.
Build a digital presence and a structured sales process. The business has never advertised and has no lead-generating website, growing purely on referral. A basic site, local SEO, and a simple outbound process targeting commercial property managers and HOA boards would add a scalable acquisition channel alongside referral, which currently caps growth.
Formalize the contract renewal and price-escalation cadence. The agreements already carry annual escalators and fuel surcharges, so make sure every account is actually being escalated on schedule and that renewals are papered well before expiration. Tightening this administrative discipline protects margin and reduces the risk of a lapsed contract quietly reverting to flat pricing.
Document routes, pricing, and crew SOPs before the seller exits. With a 25-year owner and no advertising, institutional knowledge likely lives in the founder's head. Use the 3-6 month transition to codify route sequencing, per-account pricing logic, and vendor relationships so the business runs without dependence on the seller.

Diligence notes

Verify the contract book directly. Pull the actual two- to three-year agreements for the top 20 accounts, confirm the escalator and fuel-surcharge language is in writing, and check remaining term and renewal dates. Recurring revenue is only durable if the contracts are real and assignable to a new owner without renegotiation.
Scrutinize the cash flow adjustments. A 54% margin against a 7.9% industry average is extraordinary, so reconstruct the SDE from tax returns and confirm every add-back, including owner compensation, personal expenses, and any subcontracted revenue treatment. Confirm the 40-55% margins hold across all four years and are not driven by one-time items.
Assess the labor situation, since it is the sole stated growth constraint. Understand current wage rates, turnover, seasonal staffing (4-5 core versus 8-10 in peak), and whether the local market can supply the crews needed to reach the $1.1-1.4M capacity. Also confirm the 5 full-time employees will stay through and after the transition.
Inspect and value the conveying fleet and equipment. Confirm the debt-free, no-UCC-filing claim through a lien search, then get an independent appraisal and assess age, condition, and near-term replacement capex. Owned assets are a plus only if they are not near end-of-life and about to require heavy reinvestment.
Confirm the facility lease terms. The facility is leased, so review the remaining term, rent, renewal options, and whether it transfers with the sale. A short or unfavorable lease at a route-critical location could force a costly relocation that undercuts the density advantage.

Source

Originally listed on BizBuySell. View original listing →