How much is this business worth?

[sollyj]

Im looking into buying a lawn business, it has $60 thousand in contracts in place for this year. The owner will work with me untill I transition in with the customers. Im considering hiring him for the rest of season I dont need any equip, have my own. The only thing besides fuel etc.. would be $300 in advertising per month. Any ideas what these contracts are worth and the business name, or what I should pay. He increases business about 15 thousand a year

[pclawncare]

HOLD ON seriously he is willing to sell his company to you thats making 60 grand a year and then have you hire him back on for what like 10 bucks an hour? Something doesnt sound quite rite here, and his business is growing by 15 grand per year? There has to be a reason he is wanting to get out and its not because he doesnt have time anymore if hes willing to come back and work FOR you for a whole year. I am very weary of people selling businesses because if they were making alot of money like they all claim most of them wouldnt be selling out. I almost bought a business last year made an offer and he was wanting alot more then it was worth another guy ended up buying it and he is already out of business i dont know what happened, but something bad happened because this was a pretty reputable guy that bought it.

[sollyj]

it sound like he would help for at least a month, so customers wouldnt be pissed, and would get introduced to me, havent worked any detailes with him yet, Im just trying to get an idea of what it would be worth, Ive seen the contracts and seen the increase in sales over the years, his wife wants to move back to florida, and he may help his cousin with his lawn business in florida.

[topsites]

I just wouldn't, if you have that much money you're better off starting it out on your own.

[J Hisch]

I love buying revenue, it is by far cheaper to buy exisiting business then it is to build your own. You get instant retrun on your money right away. Plus you dont have to worry about running the estimates etc. Also most people dotn care who cuts the grass as long as the job stays the same and the price is close to the same. For 60 K worth of revenue I would easily go 30-40K depending upon how long he has had most customers. And remember every business comes with risk, if you cant take the risk then dont buy the business. Never invest more than you can afford to lose.

[haybaler]

So your just buying accounts? how long has he had his business? I would do some serious investigating into what his reputation is like. if everything checks out go for it. I've got to 60K revenue in just 4 years, and I didn't have two dimes to rub together when I started. granted i have a lot of debt but It just comes down to what your looking for

[pclawncare]

Just becareful and make sure everyting is in writing

[clcare2]

If all that you want is his customer list then it is not worth anything. When I

bought my insurance, they didn't ask how many customers I have. The only

thing that has guaranteed worth is your equipment. Find out where he

spends most of his time and flood the area with flyers, radio, etc.

[sollyj]

Thanks for the insight, he has a real reputable business 5 years old. I was also thinking the 30-40 k for the business. He was thinking at least 90, he told me he would hire a good expierienced manager, and still make 20-30 k per year. said he spent long hours building, and wasnt going to give it away while its still growing. I was hoping to add these to my current business. i see where hes coming from, he's got my number for the future.

[haybaler]

he's out of his mind. just do a good job on the accounts you have and advertise in that area and you'll end up with half those accounts anyway regardless of who buys them or not. accounts come and go all the time, even if he has legit contracts with those customers that would transfer to you, they can still cancel anytime they want.

[lawnpro724]

unless there under contract for a couple more years I would pass unless its real cheap. If you decide to buy his business what is he doing with his equipment? Make sure you get a 5yr no compete agreement if you buy his business or he may be back in a year or so if he starts to miss the money and he will more than likely start soliciting the customers you paid him for. Your better off starting on your own, it may take longer but sometimes good things take time.

[lawnpro724]

he's out of his mind. just do a good job on the accounts you have and advertise in that area and you'll end up with half those accounts anyway regardless of who buys them or not. accounts come and go all the time, even if he has legit contracts with those customers that would transfer to you, they can still cancel anytime they want.

I don't know what kind of contracts you sign customers too but mine can't cancel anytime they feel like it, thats not smart business. So you go out and get a bunch of customers and sign them to contracts and them go buy some new equipment thinking you have the money comming in to pay for it and your going to let them cancel whenever they feel like it? Contracts are meant to cover a certain period of time like a year of two and unless you do something wrong the customer is bound to that contract.