sell business?

[WRICH]

I have a profitable business in the long island hampton's area and would like to sell all of it off including equipmet to take caretaker positions. The equipment is fairly straight forward as far as what it is worth, but what are accounts worth and is there a market for this??


Briefly - Grossing $350,000, 2 full crew set ups, plow route, no employees to go with.

[rodfather]

If you're talking a true "turn-key" operation, I would think close to a year's gross revenue, fair market value for the equipment. Other things to consider would be is there land/shop included and is your customer base contractual and willing to sign over with the new buyer.

[MacLawnCo]

Rod, where do you get the one year's gross? I know fert businesses get sold for this, but i have not known a maintenance operation to go this high. I would not go much highter than a couple year's net, plus assets of course.

[topsites]

I would agree with the above thou I think you'll want to offer a 15-day training program where you at least show the new owner all the ins-and-outs of the equipment, and walk-through each job and certainly meet with each and every customer to explain things and make the transition as smooth as possible.
I mean, for say a 30 thousand dollar or more transaction, it may be worth typing up pages of hints and tips and what-to-do when/if, etc...

[rodfather]

Rod, where do you get the one year's gross? I know fert businesses get sold for this, but i have not known a maintenance operation to go this high. I would not go much highter than a couple year's net, plus assets of course.

Senior partner in an A & D (Acquisition and Divesture) firm told me this years ago. I seem to remember it can be as high as 1.5 times. How much difference is there from a fert business vs. maintenance?

A couple years net might be as high as a year's gross too btw.

[MacLawnCo]

How much difference is there from a fert business vs. maintenance?

A couple years net might be as high as a year's gross too btw.
From my calculations, the main difference between maint and fert is the client acquisition cost. Fert is much higher in my experiences, thus driving up the value of the fert business.

Additionally, fert business are generally more profitable. When you combine these two factors, you will obviously get a higher multiple of earnings when time comes to sell.

[GreenUtah]

agreed. It's not out of line for valuation to be 2.5 times net plus equipment and misc. materials and goodwill. For a maintenance company to fetch those sorts of numbers, there would need to be long term contracts in place and room for expansion of services or clientele.

[rodfather]

agreed. It's not out of line for valuation to be 2.5 times net plus equipment and misc. materials and goodwill. For a maintenance company to fetch those sorts of numbers, there would need to be long term contracts in place and room for expansion of services or clientele.

I disagree.

We are finishing our 11th year of maint full time now (offering many other services) as well including fert, aeration, prunning, mulch, snow plowing, etc., to name a few. I even have most of our first year clients as well. Our longevity, reliabilty, and commitment to quality says alot when I decide to sell out.

[GreenUtah]

I disagree.

We are finishing our 11th year of maint full time now .

Disagree? Long term contracts. 11 years is long term. lol

[rodfather]

Disagree? Long term contracts. 11 years is long term. lol

Hmmmm...got me there :D

[TJLANDS]

To put a price on a Lawn Service Business is tough.
It all depends on the market and what someone is willing to pay. In some cases in a small company such as yours many people are hiring you and not your business name. In that case it would be hard to get a big number when you sell because people hired you and trust you to do the work. In another example if a business had multiple trucks and a brand name established in an area then I think someone would be willing to pay more. I have seen small lawn care operations sell for no more than the equipment they owned. I have also seen larger companies bought out for almost 2 times gross revenue. This company was a full service(lawn , landscape, snow, irrigation)and the equipment and personnel to handle it.

[Fantasy Lawns]

One sold here last summer ... just over 7 fiqures gross (1.1-1.2) sold fore over $800K .... that was with equip but not the land .... I'd say the equip was 25-30% of the price

What ever the market will bear ..... but too be a true "turn key" ... employees usually stay .... maybe not all but some give the new owner a shot

At this point in time .... fore me ... I'd hope to get at least 50% gross & than far market of equip

Of coarse my start price might be 1 year gross ... n who know .... without asking what the market would bear