What Your Tree Care Business Is Actually Worth — And How to Get the Most When You Sell

 

TRANSCRIPT

Monica Hemingway: Welcome to the Tree Care Business Show. I'm your host, Monica Hemingway with Tree Care Marketing Solutions, and today we're doing a deep dive into the high-stakes world of mergers and acquisitions in the tree care industry. Joining me today is David Mitchell from Hoss Tree Advisors, he’s a Managing Partner there. Is he going to share all his secrets with us?

David Mitchell: Not all of them.

Monica: I'm not going to ask you to do that, don't worry. Can you start by telling us a little bit about what Hoss Tree Advisors is and what you do?

David: Absolutely. Hoss Tree Advisors is the only M&A advisory firm in the tree care space. What that means is — a lot of you have probably gotten calls from private equity or investors who are looking to purchase your business. Our job is to work with business owners to determine the best fit, advise on valuation, do all the financial due diligence with you, and take you to market so that you can get the best offer. We field offers, typically from multiple companies, any time we take somebody to market. And that is with the express intent of finding a strategic investor who is going to want to purchase the company — sometimes to have you continue on, sometimes for you to be able to exit. So our job is really to be your hired gun, to support you as you go through, as Monica said, a pretty serious process. But we try to make it as painless as possible.

Monica: So you mentioned you're an M&A advisory firm. We know that with deals there are sometimes business brokers involved, and sometimes investment bankers involved. Where does an M&A advisory firm fit in that?

David: If you've heard of Goldman Sachs — investment bankers — they're usually taking on very large deals, sometimes in the hundreds of millions, and usually they might be taking companies public.

A business broker on the other end of the spectrum is going to be very small, usually local. They might be selling one tree care company every 10 years. They are probably dealing with restaurants, the local gym, maybe another service trade.

We in the M&A advisory space are focused specifically on the niche of tree care. To our knowledge, we're the only ones doing that. We take on larger companies than a typical business broker, and we only take companies to strategic investors — larger companies, private equity, national strategic players.

What that also means is we have relationships with many of the large investors. We know their profile, we know what they're looking for, what the metrics are, what lines of business they want, where they're looking to expand. That helps us make sure that if we're going to take you on, we're going to be able to close a deal.

Throughout the process, our job is to advise. Your job is to make the final decision on whether this is the right deal for you.

Monica: So you sit in the middle between the two. What size company are we talking about? You said larger companies — what does that translate to in annual revenue?

David: In this space, on the low end, about $1.2 million is a good threshold — that would probably be the smallest we would be able to find the correct buyer for. On the high end, we could be talking $25–$30 million in revenue, could be higher.

But our sweet spot is probably in that middle market — beyond what the local business broker would know, but before investment bankers are really interested. The big difference is your local business broker — great people, wonderful people you might go to church with or rotary with — but they're Googling the largest companies in this space. We have their cell phone numbers. We have direct access. So even if it's not a fit for them, we're going to get a yes or no instead of landing in their spam inbox.

Monica: That's the last place you want to end up if you're trying to sell. So how do you charge for your services?

David: We do something that's industry standard — a percentage-based sucess fee. About 95% of what we charge is on the sale. That would be on the overall valuation.

We do typically take a small retainer — about 5% of what we expect the success fee to be — upfront. The reason we do that is to ensure we get people who are serious, who are going to take offers seriously, so we're not wasting your time, our time, or the investor's time.

The percentage varies: the smaller the company, the larger the percentage; the larger the company, the smaller the percentage. The fee obviously goes up with larger companies, but it's not proportional. A million-dollar business versus a $10 million business — the fee is not 10 times larger. Each deal we give a specific number, and that's made very clear once we start an engagement letter. So basically it's a percent of what it sells for.

Monica: Kind of like if you go to sell your house and the real estate agent takes a percentage.

David: Exactly. A lot more people are selling their houses than their businesses, so I try to bring in examples that are more relevant.

Monica: So somebody's thinking about selling their business. Walk us through what it would look like if they came to you — step by step, from first contact to closed deal.

David: The first thing my team and I do is have a discovery call to get to know you and your business. We're going to ask for some financial data at a high level — generally, how much revenue are you doing, what is your service mix, what is your retention, are you growing or shrinking.

Then, assuming both sides feel good, we go to valuation. That valuation is there to help both sides — us and the owner — understand what we think we could get in the market today. Half the time we do those valuations, we look at the financials in depth. We do sign an NDA — that's really for the owner's protection. You don't want anyone in my position going around talking about your financials without your permission. We look at those financials, give that valuation, and help you understand where you are.

In some cases, we say you're not ready today. I had this conversation recently with somebody in the Northeast — next year, if you hit this threshold in your market, here's where the investors are, and this will also help you pay off a year of debt, which will put more in your pocket. He has retirement goals he needs to hit.

But assuming the valuation is where you want it to be and you feel like we're a good fit, then we provide the engagement letter — that's where the real work starts and where we really earn our fee.

We do a deep dive into your financials and all of your records — anything that an investor would want to look at. We package that together and put together what they call a CIM. That's our marketing materials, which we send to any interested party we know would possibly be a fit.

While we're putting that together, we're really trying to make your business look as good as we can on paper. Every small business has a down year, or something happened, maybe an accident. We're trying to make your business look as clean and polished as possible. We're never going to be able to hide anything, but we don't have to show off the warts.

Then we go to those strategic investors to gather interest. They'll take a look at a high-level document first, then look through it in more depth. If they're interested, we start having conversations — the owner and the possible investor.

That process is likened to dating. You want to find somebody who is a good fit. At the level we're talking about, it usually is fit-based and valuation-based. Obviously, if we're talking millions of dollars of gap between one offer and another, it's pretty clear where to go. But if you're talking a $50,000 to $100,000 difference, you really want to choose the group you feel best with. That's where we really play matchmaker.

They're going to put together their offer, and we're going to receive it and make sure we can explain everything to the owner in plain language — why this is a good deal, why this is different, how the transaction is structured. We're trying not just to look at what the top number is, but what are you walking away with today. Is there stock that's going to roll forward? There are a lot of different things we can talk about — making sure it's clear why you're going forward.

Once you decide who you're going with, that's when it gets very serious. The other side is now going to invest hundreds of thousands of dollars — could be $100,000 to $300,000 — in due diligence. It can be a grueling process, especially if you're doing it alone.

Monica: I've heard it compared to a colonoscopy.

David: Yeah. And you've got to keep running the business — you can't drop that ball. So, our job is to take it to close. That's why you want somebody who has experience in this space and a track record.

Our job in that due diligence is really to make sure it goes smoothly. If you get upset, shooting off an angry email to us is fine — not to the investor. We are the buffer. We play in that middle space, and then we take it to close. That could be anywhere from 30 days to 120 days. We're trying to get it done as quickly as possible. Then the deal is signed, and hopefully you go on to refer us to many other people.

Monica: This is not a simple process and trying to do it yourself with all the things you mentioned may not be the best idea. Having that professional help, even though it costs something, is probably well worth it — especially since it prevents you from getting distracted from your business and kind of undermining the one thing you've got going for you, which is the business you're trying to sell.

David: Monica, I could get up in a tree today and try to take off a limb, but I would be terrible at it. I'd probably hurt somebody, hurt myself, fall out of the tree. You're experts in this — you do it every single day. You're probably going to sell your business once. If you're really successful, maybe a few times.

Our job is to do this every single day and make sure we're helping you avoid the mistakes. I hear this a lot: "Two guys in a truck — they're cheaper than me." Your expertise is why you get to be paid a premium. Same for us. Yes, it's not cheap, but it's quality. And I always say this — if it's not us, having someone there to guide you through is really important. You've got to trust the people, because it's not going to be 30 days. Anybody who tells you that is not being straight with you. It could be six months, could be a year. We're trying to get everything done between six to nine months, but I would never tell somebody, "You're going to sign on the dotted line and have money in your account a month later." It's just not going to happen. Be worried if that's what you're hearing from somebody.

Monica: So, you raised several issues. One is: depending on why you're selling, what are the most common reasons people look to sell their business, and how does that change what kind of buyer you're looking for?

David: The most obvious is we're at the end of our career and we don't have somebody to take over. We've explored selling to employees or children and that's not going to happen. That's bucket one.

Bucket two — and this is something a lot of people don't think about — these are people who do have time left: multiple years, could be anywhere from three to twenty. Especially with the ones who are earlier, what I tell them is: you have bet it all on your company time and time again. Generational wealth is typically built with other people's capital. You're able to continue on — most of the strategic investors actually want somebody to stay on, or they want a clear number two. So, if we're talking to somebody who's going to stay on, fit matters almost as much as valuation.

And then: what does post-deal look like? What are all the promises? In bucket one, if you don't have somebody who can take over operationally and handle sales, it is going to be harder to sell you — even if you're hitting the revenue thresholds we talked about. Because the CEO of that large company does not want to come run your business. They're hoping you have somebody, and they're not asking you to stay forever. Succession planning is important either way. So many of the people we talk to in this industry care about their employees and their legacy. There are some investors who are outright, "No, we will not take a company where the founder won't stay." So you have a lot more options the earlier you start this process.

Monica: Not only are there different types of sellers selling for different reasons, but it sounds like there are different types of buyers as well, who are looking for different types of companies and have different goals for what they're trying to accomplish by the acquisition. Can you walk us through the types of buyers?

David: In this space, we're seeing private equity — there's a lot of buzz about that, even at this conference. They're great. If they weren't here, there wouldn't be as many options, so this is a good thing. We think a lot of them are above board. They're smart, and that's part of why it's helpful to have somebody who's played the Wall Street game on your side.

Then there are the very large companies — I'm sure you could name them — that are probably already in your local market. They might be employee-owned. Those are the two we typically deal with.

In some cases we'll deal with family offices — somebody with large institutional wealth who has bought at least one tree care company and is looking to do more. In that case, we don't want to take somebody through a process where the buyer has never acquired a tree care company and has no industry experience — we just see that as a problem.

Within all of that, there are buyers who are looking for residential only, commercial and residential, commercial only, tree line work, utility work, vegetation management. They're pretty clear. If you're in vegetation management, some of them won't touch somebody who's residential. If I just Googled "who are the biggest tree care companies," I'm going to find a vegetation management company in that list. And if I don't know any different, I'm going to try to take somebody who's residential to them — and they're just going to laugh. They'll be kind, hopefully, or they'll just ignore your email.

That's why we always ask about service mix, percentage, and customer concentration. If you have one large client that makes up over 50% of your revenue, that is going to be a real sticking point. Investors don't want that — they're trying to make returns on whatever they paid for your company, and if that one client walks away, half the business is gone.

Monica: How about location? Some of the PE firms we've been working with have made it really clear they're focusing on specific regions - Mid-Atlantic, Northeast - where they're trying to grow their footprint.

David: Larger markets are very desirable for anybody who's in residential and commercial. If you're in vegetation management, you can be rural - you're working on utility lines. But focusing more on the commercial residential side: the bigger the market you're located in, the better for your valuation. I know you can't control where you started your business, but just know you're going to have more options in a large city. On top of that, yes, there are companies that have told us outright, "We won't buy in this state" or "We won't buy in that state" and you can probably guess which ones. And some are saying, "We want to be the king of the Midwest" or "the Southeast" and they're going there specifically. That's part of our due diligence and what we build towards, so when we talk to you we already know. We've come across companies that are in our revenue thresholds, really good companies, but something in what I just described doesn't fit, and we know there's not a buyer. We have to say no, or you need to get to a different revenue threshold. So that matters. And interestingly, if there's a PE company already operating in your town, that can actually be good for a smaller company - they might take you. Whereas if there's no one in your city and you're smaller, they're looking for the big company they can build large systems out of.

Monica: You've mentioned private equity as one of the key players. They seem to have different goals. What are some of the outcomes they're looking for and how do those differ?

David: Private equity is just anybody who has private capital investors — it can be a very wide range. The really large funds versus the very small funds are very different. In most cases, they want to buy companies over a four-to-six-year range, then go sell again — either within their own fund, to another private equity company, or to a larger strategic buyer.

Monica: So they're combining companies to get a higher combined revenue, making it more attractive to another buyer?

David: There are two reasons they do that. One — they think strategically they can put in their systems, maybe they're really good at technology or marketing, and bring in more efficiency. Two — the larger the company, the larger the multiple. The term is multiple arbitrage. That just means: if you combine, let's say, 10 companies that are worth $5 million each, each one of those is going to get a smaller multiple — three times, four times, five times. But now those 10 companies that are $5 million each equal $50 million, and they're able to leverage that and get another one or two turns on it. If they sold for five times and can now get seven times … as you can imagine, seven times EBITDA versus five times EBITDA can be a lot of money. So, they make money just doing that, without even growing the business or making it more efficient. That is the private equity math. That's part of why private equity is in tree service, plus the fact that you can't outsource it to AI.

Monica: You can't do tree work with AI.

David: It's always going to be people. I talked to a very large buyer, a very large company, and he laughed. He said, "A lot of the guys I talk to are afraid we're going to fire all their people after we come in." He's done a lot of transactions. He said, "We've probably gotten rid of two or three people across all these transactions, but this is a people business. What am I going to do, get rid of them? I need them. That's what I'm buying." So, he's very much focused on buying the people, and the systems and processes too. These companies don't operate in a silo the way technology companies do.

Monica: You've mentioned multiples and EBITDA. For those who might not be familiar with what those mean, can you explain what EBITDA is, what a multiple is, and how those two things go together?

David: Let's start with EBITDA. It's kind of the even playing field of investing. It stands for Earnings Before Interest, Tax, Depreciation, and Amortization. It's an accounting term, but boiling it down: it's essentially how much profit there is after we take out the owner's salary. And our job is to adjust those numbers to make sure they're market-standard. I came across a young owner paying himself $30,000 in a large market - we have to go back and say, "To replace you would cost much more than that, so we've got to factor that into your profit." On the other side, if somebody is running some personal expenses through the business, we're going to adjust the other way. I would also caution: please do not run personal expenses through your business in excess. Sure, some things I totally understand, but a $30,000 purse for your wife? Please don't. Plus, you might have the tax man call.

Now, the multiple: EBITDA is essentially industry-standard profit. A multiple is just how many times that number. Using easy numbers — if your EBITDA is a million dollars and your multiple is three, that's $3 million. If I can get you three and a half times, that's $3.5 million. If I can get you five times, that's $5 million. That's why every turn, every half turn, is so valuable for the owner and why we're fighting for it. Typically, what we've heard from investors is they're willing to pay a little extra when working with us because we've done a lot of the cleanup work, and we're going to get the deal along faster. Plus, they're in a blind bidding competition — if you don't know what the other side is bidding, you're going to put your best offer forward.

Monica: So, when you're talking valuation, what you're really talking about is the multiple on your EBITDA?

David: That's the valuation. And I want to flag something that some owners get and some don't: your equipment. Everybody's got the best equipment — I'm sure you do too. Some think they're going to be able to take that valuation and then add back the price of the equipment. I have this conversation about once a month. The equipment is part of the business. Without the equipment, the business wouldn't be able to do what it does. It's baked into your valuation number. I want to clarify that. Anybody who tells you otherwise doesn't know this space. If you sell the equipment, you're going to sell it for pennies on the dollar. The business at your level is worth more than the equipment, but you don't get to add it on at the end. It's part of it, just like your people, your processes, and your customer list. You wouldn't expect to be able to contract out your employees after the sale, so we're not going to be able to sell off the equipment beforehand. If you start selling equipment right before the sale, we're going to have to have a conversation. It's kind of like opening a credit card right before you close on your house — don't do that either.

Monica: So, if the valuation is a multiple of your EBITDA, what can you do now, if you're thinking you might sell in two years, to get your business to the point where you're going to get the highest number?

David: I'll plug our service first - come get an evaluation, and we do that at no cost. If you don't know how to calculate that yourself, or you just want somebody else's opinion from someone who actually sees transactions happening in this space, we're happy to do that. We don't put a calculator on our website because we want to look at your real numbers, not give you something fake. But here are things that matter:

1. If you're not staying, who's your number two? Get a second layer of management in, someone who handles operations and does some sales. That is incredibly valuable.
2. Make sure you are running everything through the business for the tax man. I've heard "nobody does that." Well, the people who sell typically do. Lots of cash transactions bring up questions you don't want to answer, and it can be a deal killer.
3. If you're going to buy equipment, what's the return on investment on that? If you're going to hire a number two, what would that add to your business?
4. How do you keep costs low while growing revenue? What you do in the marketing space is very valuable there. Every single investor feels more comfortable the more the revenue is. I would be looking to grow your top line but also your bottom line. You both have to be there. If you have to add a couple million dollars of equipment to add $500,000 in revenue, we need to talk, we need to make sure that makes sense.
5. And your time horizon matters a lot. If you're making big strategic decisions — hey, I might move into a new market, or there's a guy in my town who's retiring and I might pull him in — yet again, let's have a conversation if you're two to five years out. Let us know so we can tell you whether it's worth it or what the probability is that it's worth it.

Monica: How about things like working on your SOPs or your safety record?

David: Yes, I forgot to mention a few things.

• TCIA Accreditation is a great thing — it's not going to net you a hugely different multiple, but it is a consistent check mark we hear about.
• Good SOPs — absolutely.
• If you're not on a CRM, whether it's SingleOps, Jobber, Arborgold, or any of those — I'm not going to tell you which one, you've got to figure out what's best for your business, but having that data all together makes it so much easier. And it tells the investor: I'm organized, I get it, I'm trying to grow.
• Safety — if you have a consistent safety problem, that's an automatic red flag. No one wants to buy a problem. It'll also keep your margins better through your insurance, and as I talk to everybody in this room, they care about their employees. Keeping your guys safe is just the right thing to do.

Monica: How about diversifying your services? Does having a full range of services, including PHC, make a difference?

David: PHC is looked upon as a very good thing. Now, if your time horizon is a year, don't invest in setting that up just to tack it on. Go do what you do really well and double down. If your time horizon is a bit longer and you have a way to make it happen, yes, I think that's great. If you're not doing any commercial work and you think you could go sell into commercial, that could also be a good thing.

But it's better to be really, really good at what you do than too diversified. Your time horizon matters a lot. If it's going to distract you from what you do really well, I caution you against it. But PHC programs are great. It's good revenue. And if you've already thought about it and think "I could implement this and do it well," just know it's not going to be a million-dollar business overnight. It takes a while.

Monica: From a marketing standpoint, it's also a lot harder to market PHC.

David: Yes, it's just different. And if you're the stump guy in town, that's a big shift in your business.

Monica: So, as you're looking to sell and you've got these potential buyers out there — as the business owner, what are some things you need to be thinking about in deciding which potential investor or buyer is the right one for you? And what are the red flags to look for?

David: Talk to the people who've already sold. Don't just listen to us. It's really important to know when you're being sold to. My job is business development. I'm going to try to give you the best advice possible and I try to be transparent, but so is private equity. They're going to sell you right up to the moment you sign. So, talk to people who've actually been through it. Don't just talk to one; one personal experience could be terrible or amazing. Get a small sampling. If you're with us and you're at that point, don't go solicit those people yourself; we'll help you with that. But if you're in these TCIA rooms, grab the people who've gone through an exit and talk to them. How's it been? What was the downside? What was the upside? Because what might have been really bad or really good for them may not be the same for you.

Two, I would want to know, if you're going to one of the large firms like Davey, they're going to continue to grow. If you're going to a private equity firm, where are they in their fund cycle? If they just raised a bunch of money to buy more companies, it's probably a really good time to think about that. If they're at the end of their cycle and they're picking up companies at the very end, you might get sold to the next buyer and you have no control over who that is. That's part of what we do — if you can get that due diligence from your friends, you're welcome to that. We'll also help advise on that once you're in our ecosystem. But know the lay of the land. And look at who's buying in your area — if they already bought somebody who looks just like you, they're probably not going to buy you too.

Monica: The different PE platforms have different models for how they bring in a new company. Can you talk us through those different models and why somebody would decide one is better for them versus another?

David: I talked to one owner who said, "They saw all the data I'm tracking, all the things I'm doing, and we're talking across the network and they're asking me how to do things." He loved it. Large company out of the Southeast, very happy. So I'd be asking: how much do the other branches — the other former owners — collaborate? If you're going to be stuck in a silo, why? I talked to one group that's very focused on pushing in with support, and they told me, "Our entire job is to make them better — we bring them together, we do group trips, we do all the things." Some people think that sounds awesome. Some are like, "I don't want a group trip with a bunch of people I don't know." All of them are going to try to integrate you into their general system. They're going to want some consistency. That doesn't necessarily mean you're going to have to switch from one CRM to another, but if you're not on a CRM, you're getting on one — plan on that. Those are questions I'd be asking before we get to the offer-accepting stage: what does your integration look like, who does the integration, can I meet that person and talk to them? Because in the very large organizations, the person who does the M&A deal usually hands it off to an integrator, and you're going to want to know who that person is and how they're going to approach it.

Monica: The way we tend to lose our clients is they get acquired — that's pretty much it. Good reason to lose them, hard for us, but good for them. We've seen very different outcomes. In some cases, they continue running their own business — nothing much changes except they've now got more capital to work with. They're getting a salary, they've got to keep their P&L looking good, but they're not responsible for the company in the same way. Others, it becomes: "I don't care how you did it before, you're going to do it our way now" — and you're just another employee. That works for some of them. Others: "I'm out of here. Thank you for the check."

David: Absolutely. Very different ways to exit.

Monica: Are you going to get a different valuation depending on what outcome you want?

David: If you're staying and you're willing to stay longer, they're going to ask for a multi-year commitment. That's not written in blood, but they're going to incentivize you financially to do that. Your valuation probably will be better.

That's why I'd say: think about what life could look like afterwards. The people who do stay — back to what I said originally — generational wealth is a lot of times built by being a minority shareholder. Look at the richest people in the world. Jeff Bezos is not a majority shareholder of Amazon. Elon Musk is not a majority shareholder of his businesses. They're minority shareholders, but they're not risking their net worth every single day on their own labor.

What it allows you to do — and most firms are going to have some stock program — is that if you continue on, you get to see the value you build. You don't get 100% of the pie anymore, but sometimes the 20–30% of the pie five years down the road could be worth as much as the first check you got. You can't get that kind of exponential growth in the public markets. But that's not a guarantee, and you've got to be comfortable with the first check regardless. Our job is to help you evaluate: would the second bite of the apple actually come?

Monica: In your experience, how likely is it to happen?

David: Your best bets are established operators. And there are some smaller ones that are showing year-over-year growth where it's very likely. But I don't want to put a percentage on it. You cannot calculate your retirement fund or your walkaway money thinking this is a guarantee. Like any other investment, it may not happen. Even Warren Buffett doesn't make money every year. But in this industry, it's hot and it's good. And it's not just tree care — it's HVAC, plumbing, a lot of home service industries. This is a very hot industry right now. Hopefully it'll continue, and as long as there's somebody on the other end of that transaction, you're going to get that second bite.

Monica: So just to make sure people understand — you get some money up front when you sell, but you don't necessarily get everything. You might reinvest part of it. Using simple numbers: say you get a million-dollar valuation. They give you a check, you pay your debts, pay the tax man. But they might also say you can take up to 30% of that and invest it into their stock. Then once they go to sell, that original investment could grow. But that does come out of the larger check, so you have to decide how much you're willing to leave in.

David: Exactly. For younger owners, that math is really nice. But if you're only going to stay in for a year, we should seriously consider whether it's worth it. Take what you can upfront rather than hoping. And if you're leaving in a year, they're not going to give you as favorable terms as somebody who's planning to stay for five years or longer.

Monica: So there's a lot to think about when you're thinking about exiting. It's fairly complex.

David: It's doable. And what we see — our results are that when we take you to market, we feel very confident we're going to get interest. We don't take on everyone. I tell more people no than yes. Because there's only a very small percentage of companies that are even transactable in this industry. Now, if you're showing up to the TCI EXPOs, the winter management events, they're able to employ you, the percentages are a lot better. But I have a hard conversation at least every other week with somebody saying, "You're just not our fit." I point them to a business broker in town, but their best hope is somebody local will buy them, or they're looking at an asset sale. And you hope it's not an asset sale — if it is, you're going to get pennies on the dollar. You're not selling a business. You're selling assets that are depreciated, and it's not going to be worth what you bought them for.

Monica: Okay, so to close — somebody who's thinking about exiting as soon as possible, health reasons, family reasons, they're done — versus somebody who is thinking a few years down the road. What's the one piece of advice you'd give to each of those two different individuals right now?

David: Somebody who wants out now: talk to us immediately. We need to move quickly, because the last thing we want to see is declining revenue. That's just bad.

If you're in bucket two — thinking a few years down the road — talk to us now, too. I know "now, now, now" can feel like pressure, but here's why: I heard somebody say they held their business for 10 years, and in years six through 10, they added no material value to the valuation, but kept all the stress and the headache. And when they sold, he realized, "I would have made just as much money investing in the market, and I wouldn't have had any of the stress."

So, if you're going to hold, which is a great strategy — talk to somebody today who can help you see if you could go now or later, and what makes sense. If you're not going to go now, know why and know what you're shooting towards, because you are going to have to exit the business eventually — to a kid, to employees, or somewhere. Just know what it's worth so you can build to the next level.

And don't throw good money after bad. If you're about to go buy a bunch of equipment, is that going to change your valuation materially? Or are you just going to saddle yourself with debt and take on more risk? In both cases, talk to us now so we can give you a fair valuation. You just need an outsider to say, "Here's what it's worth, and here's where we think you could be in five years."

Monica: It's a good point. I think most people overvalue their company — they think it's worth a lot more than it really is. They don't see all the warts. They just see the great parts.

So, there you have it straight from the Hoss's mouth. Really bad. I'm sorry.

David: No, that was good. That was good.

Monica: Yeah, I was just looking at the logo on your shirt there.

David: Yeah. And I would end with this. I really appreciate it.

If someone's interested, you can reach out to me at da************@**************rs.com. We're also happy to give away our Investor Insight Guide — it's basically a one-pager that walks through what investors are looking for and what they're not. We give that away for free. It allows you to see what you're building towards, even if we don't have a conversation.

But I'd love to do evaluations for anybody who is thinking about exiting in the next 20 years — so you know what you've got and what the opportunities and options are down the road.

Monica: Thank you so much, David. It's been a real pleasure learning more about all of this from you. And if you are watching or listening to this later, check out the show notes down below. Give us a thumbs up, subscribe, and get in touch with David if you are thinking at all about exiting your tree care company.