Seasonal demand returned in full force this spring for landscaping and lawn care businesses, but shifting labor dynamics and inflationary cost pressures continue to challenge owner-operators. Buyers remain active in this sector, drawn by recurring revenue models, low customer concentration, and fragmentation that presents growth-by-acquisition opportunities. However, deal terms are tightening slightly due to higher borrowing costs and longer due diligence timelines.
Key Trends Impacting the Market
Labor Supply Remains a Headwind Labor shortages remain the top concern across the industry. According to Vertical IQ, many landscaping firms are still struggling to find and retain qualified workers, especially for physically demanding seasonal work. Wage inflation and rising competition from other trades are pushing up payroll costs, squeezing already-thin margins. This makes businesses with strong employee retention programs and training systems more attractive to buyers.
Rising Operating Costs and Pricing Power Input costs, including fuel, fertilizers, and equipment, have risen modestly year-over-year. Fortunately, many firms have been able to pass these increases on to customers. In fact, average pricing for residential and commercial contracts has increased in 2025 as operators adjust to inflationary pressures. Buyers continue to show interest in businesses with pricing power, route density, and long-term service contracts in place.
M&A Interest and Fragmentation The sector remains highly fragmented, with few dominant players, making it an appealing roll-up opportunity. Strategic buyers and private equity-backed platforms are actively seeking targets with $1M+ in EBITDA, while smaller local acquirers continue to dominate Main Street transactions. Businesses with strong branding, reliable equipment, and recurring maintenance contracts are commanding premium multiples.
Outlook for Q3 2025
We expect deal flow to remain steady in the second half of the year, especially for owner-operators with clean financials and management continuity. However, lenders are placing increased scrutiny on customer concentration, contract terms, and seasonal revenue swings. Business owners considering an exit in the next 12–24 months should consider a valuation review and begin preparing their financials for buyer scrutiny.
Industry Insight Report: Landscaping Q2-2025
Seasonal demand returned in full force this spring for landscaping and lawn care businesses, but shifting labor dynamics and inflationary cost pressures continue to challenge owner-operators. Buyers remain active in this sector, drawn by recurring revenue models, low customer concentration, and fragmentation that presents growth-by-acquisition opportunities. However, deal terms are tightening slightly due to higher borrowing costs and longer due diligence timelines.
Key Trends Impacting the Market
Labor Supply Remains a Headwind
Labor shortages remain the top concern across the industry. According to Vertical IQ, many landscaping firms are still struggling to find and retain qualified workers, especially for physically demanding seasonal work. Wage inflation and rising competition from other trades are pushing up payroll costs, squeezing already-thin margins. This makes businesses with strong employee retention programs and training systems more attractive to buyers.
Rising Operating Costs and Pricing Power
Input costs, including fuel, fertilizers, and equipment, have risen modestly year-over-year. Fortunately, many firms have been able to pass these increases on to customers. In fact, average pricing for residential and commercial contracts has increased in 2025 as operators adjust to inflationary pressures. Buyers continue to show interest in businesses with pricing power, route density, and long-term service contracts in place.
M&A Interest and Fragmentation
The sector remains highly fragmented, with few dominant players, making it an appealing roll-up opportunity. Strategic buyers and private equity-backed platforms are actively seeking targets with $1M+ in EBITDA, while smaller local acquirers continue to dominate Main Street transactions. Businesses with strong branding, reliable equipment, and recurring maintenance contracts are commanding premium multiples.
Outlook for Q3 2025
We expect deal flow to remain steady in the second half of the year, especially for owner-operators with clean financials and management continuity. However, lenders are placing increased scrutiny on customer concentration, contract terms, and seasonal revenue swings. Business owners considering an exit in the next 12–24 months should consider a valuation review and begin preparing their financials for buyer scrutiny.
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