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View Full Version : What's wrong here????


HB Lawn
11-30-2010, 08:48 PM
Saturday I went to look at business for sale in my area. It included the equipment and 21 lawns. The asking price was $10,000. I looked over the equipment and talked with the owner about the buisness. Everything looked and sounded pretty good. I then emailed him for the cost of the equipment and the listing of customers (without names) and the price of each, so I could discuss it with my CFO (wife). So he sends me the info and that's when it hits me. He said the equipment cost $6,200 new and that's what expects to get for it now. He also states that the accounts are worth $12,000 per year. He figures that the business is now worth $18,000. I called him today to discuss things and he now tells me he and his wife talked it over and now they want $11,500 for the business. Should I run and how fast????

MarcSmith
11-30-2010, 08:55 PM
12K per year means 21 lawns are grossing 1K per month... or 47 bucks each client each month...

each client averages 571 bucks per year or 15 bucks per cut on average based on 36 cuts...

no wonder hes selling he's not making any money....

HB Lawn
11-30-2010, 09:04 PM
Yeah, that's the going rate down here Central Florida. Many lowballers to deal with. We have one guy charging $60.00 a month for lawn, shrub and tree service. Most of around here get $60.00 just to cut the grass, all the rest is extra money. He's selling cause his wife wants him too.

MarcSmith
11-30-2010, 09:15 PM
HB

I was getting more than that in south orlando back in the mid 90's before I sold and moved north....

this guy is loosing his shirt, at 15 bucks a cut its not a business its a hobby...

HB Lawn
11-30-2010, 09:57 PM
When my house was finished in 2000, my lawn was being cut at a price of $80.00 a month. Now a days that price would be $60.00, because of all the fly by nighters and lowballers. Here one day gone the next. People will drop you for $5.00

MarcSmith
11-30-2010, 10:06 PM
I don't doubt it. The key is to find that good customer base that doesn't shop every single month.

you have to ask yourself. do you really want some guys 15 dollar a cut clients that he's not making any money off of. is it just a customer list? pretty much worthless IMO, if they are yearly contracts then it has a bit more value.