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Time To Sell
01-23-2011, 04:42 PM
I am entertaining the prospect of selling my lawn care/landscape maintenance company this winter or early spring before the lawn care season begins.

My business has grown steadily each season for the past several years. My total collected sales for the 2010 season was 95K plus change. I had projected my sales to be in the 100K-$115K range at the beginning of last season. When you consider that central Indiana experienced the most severe drought it has experienced in modern history my numbers were right on the money. The drought easily took 15K off of my total sales last season as I factor that we lost at least 400 mowing services due to the drought that would have otherwise been performed in a typical lawn care season.

I am not disclosing a lot of specific information in this post as I do not wish to alert my competitors or clients or to alarm my employees. Please contact me via e-mail if you are a serious potential buyer and would like more information. Please include your contact information as well as some basic background information. I will reply to those I deem as serious and credible with a more detailed e-mail and an asset list. Please do not waste your time or mine if you are not in a position to start serious negotiations in the 65K range.

As I stated, I am not going to list the exact areas we service or my equipment list or anything that might give away my business identity in this post. Basic info is that we serve the Indianapolis area and our primary service area is the greater south side and the south suburbs. This is a turn key operation. This business has been professionally marketed and branded. This business has incredible potential for the right person. At the end of the day, the highest bidder will get this excellent opportunity, but I would really love to see it go to someone who is planning to start in this business from scratch and would be interested in taking my concept and what I have started here and running with it. It would also be a great opportunity for a small to medium sized operation that wanted to expand and/or desiring an image makeover at the same time... All things being equal I would give preference to the guy just starting in this business who wanted to keep my name and concept and expand on that.

FYI: To those individuals already in this business-At this point I am not interested in selling the accounts and equipment separately. Please don't waste my time asking what equipment I have for sale or for an asset list. It is my hope to sell the entire business as one package.

1) Business Identity: (including rights to all intellectual property, all goodwill, phone numbers, website, E-mail addresses, etc. Much more)

2) Accounts: (including all active accounts, information about past accounts, leads, etc.)

3) Miscellaneous: (A substantial amount of pre-paid advertising and marketing for 2011, Transition Services, more)

4) Equipment: (I will provide those individuals who pass my screening process with a detailed list of my physical assets)


About 50% of our gross sales are derived from mowing accounts and the other 50% are split between lawn applications and landscape maintenance and basic landscaping.

For additional information please shoot me your contact info and some background info. I will be doing some screening and contacting those individuals I think are serious. The more information you give me the more likely I am to contact you. Please keep in mind, respectfully, that unless you can produce 65k-75k we have no reason to discuss this. I am not interested in financing anyone or anything of that nature. The difference in price b between the 65K and 75K is predicated on one of my trucks (the main company truck) which I could either include or would keep for myself or use as a trade in. It is logo'd up for the business so the individual wishing to continue with my concept would probably be wise to include this. I am only attempting to get what this truck is worth in a regular sale so it is not a big deal to me either way.

Just To Be Clear: Other than the aforementioned truck, at this point I have no intention of breaking any equipment up. I intend to sell this business as a package deal. Equipment, Accounts, Phone, Pre-paid Advertising, Lead Books, Transition Services, ETC.

The only other possible sale arrangement is that I would be willing to sell the entire business side of my company without any equipment included. This would not be a deal where the accounts would be sold separate of any other assets on that side of the business. I would require $35,000 firm for a deal like this. That would include items 1, 2 and 3 as outlined above. If I were to sell that component of the business first than I will sell all of my equipment piece by piece but have NO intention of selling any equipment at all until the business side of my operation has sold.

I am in the process of putting together more detailed information regarding my business and the process for which I will be considering buyers. If you would like more information or to request consideration please respond via the Craigslist e-mail link. Please be patient as it may be a few days before I respond.

Please send inquires to me via private message on lawnsite.

I look forward to sharing more with the right serious individuals.

Thanks for your interest!!

scagfreek
01-23-2011, 05:22 PM
your insane for selling

Time To Sell
01-23-2011, 05:44 PM
your insane for selling

I am? How so? Interested to hear your thoughts especially when you know nothing of my circumstances or anything. Do you think I am priced to low? (I know that is hard to say based on not knowing all of the details of my business and the amount and type of equipment involved. I am curious to hear any feed back from anyone on this matter.

Why do you think it is insane I want to get out of this biusiness and move onto something else? Do you know something I don't regarding the state of the lawn care industry or something.

scagfreek
01-23-2011, 06:34 PM
because of so much income

indyturf
01-23-2011, 08:55 PM
If you were interested in selling just the lawn treatment accounts alone I might be interested in talking. I have been in business 25yrs and don't provide any of the other services. I know you don't want to split things up at this time but if things change let me know.

Hoots
01-24-2011, 10:10 PM
Too high. I have nothing to do with your sale but assuming on average 1 customer is $1000 gross per year. You would have 65 customers that you are mowing "for free" for the first year while paying overhead out of your own pocket. Too high IMHO.
Posted via Mobile Device

turfquip
01-25-2011, 08:20 AM
Too high. I have nothing to do with your sale but assuming on average 1 customer is $1000 gross per year. You would have 65 customers that you are mowing "for free" for the first year while paying overhead out of your own pocket. Too high IMHO.
Posted via Mobile Device

I agree. These types of businesses rarely bring what the owner thinks they are worth.

If you can get three or four times the value of 'running the route', youre doing good.

Time To Sell
01-25-2011, 12:24 PM
I agree. These types of businesses rarely bring what the owner thinks they are worth.

If you can get three or four times the value of 'running the route', youre doing good.

>>>Too high. I have nothing to do with your sale but assuming on average 1 customer is $1000 gross per year. You would have 65 customers that you are mowing "for free" for the first year while paying overhead out of your own pocket. Too high IMHO.
Posted via Mobile Device <<<<

Note: This response is also addressing several PM's and not just the comments of the 2 responders above. So if it strays from the point of just these 2 comments it is also responding to others.

Yeah 3 or4 times running the route is about right if you were buying solid accounts with no other intangible assets to go with them and no physical assets at all. I have looked at several LCO's over the last several years and have bought a few accounts here and there and pondered buying buttloads more that were unreasonably priced. My general rule of thumb on buying a simple straightforward mowing account is 3 to 5 times the price of one service depending on how much I trust the sellers intention, how well the account fits into my route and my general gut feeling as well as certain other factors.

I would like to know where I can buy a profitable and growing turn key business for .65 on the annual sales dollar of what sales should be my first year in business unless I totally Eff things up. Especially one that can be run with a minimal overhead relative to most business types and where only a very small percent of sales is reinvested in inventory that has to be flipped. If you hear of some good deals like this please let me know. I am always eager to own a business that can fully repay the initial investment in a year or maybe two if I manage it properly and don't have to take out much money to live on. When I started this thing I didn't anticipate making any money (personally) the first few years. If your planning to start a business and get paid regularly the first few years maybe you should just go find a job.

I know there are 2 schools of thought on this matter in this industry. I realize due to the low barriers of entry involved in this business a lot of guys start out with a beater pickup and a small trailer and a $500 walk behind they fix up and maybe a few hundred in the bank and a 1000 flyers to put out. I am not knocking this method at all. I know there are a ton of guys on this site who did just this and are vastly more successful than I am. Maybe these guys even made decent money their first year out of the gate.

However, I went the other route with my business. I made some pretty substantial investments (relative to the average in this industry) for a small start up LCO. I spent a good amount of money to equip my business and to market it and advertise it and brand an image. While other guys who started about the same time I did were starting to take decent chunks of money out of their businesses I was reinvesting in mine. My point here is that most "business" people realize that a viable business is an investment that is not expected to pay for itself the first year. I don't see how according to some peoples math you are working for "free" the first year....that's ludicrous....An individual who is a real go getter and was very diligent in managing overhead and labor costs could work 9 months for "free" and be very close to out of debt and own a 100k a year business with all the physical assets required to produce said 100k.

I think $35k for the business side of an LCO doing 100k a year is very reasonable. I know the old argument.... "well I can spend half of that in advertising and I will generate those sales in a year" and that is just nonsensical BS. It takes a lot of time, effort and planning to build relatively tight routes with good paying customers. It doesn't just all fall into place with a few decent advertising campaigns. Throw in the fact, that to name a few assets....I am including an established phone number, website, established reputation,tons of goodwill, at least 3k of pre-paid yet to be used advertising mediums, lead books, items such as forms and service agreements etc...which all took time and money to produce, transition assistance, the cumulative affect of several years of advertising and marketing and maintaining a high visual presence in my target market to an upscale demographic...I think most would agree the higher visibility your LCO has the easier it is to grow business....I am at a point where my word of mouth and visibility continue to grow my business without the need to constantly advertise...I could go on and on...but bottomline-this is a little more than buying some accounts....

Now when we look at the 65K package lets consider the equipment we are getting to run this business. As I stated in original post I don't want to reveal my business identity on a large scale. It is on a need to know basis. That being said I can't list specefic vehicles and what type of equipment I run because that could very easily tip my hand to guys working in my area. Lets just say that all of my equipment is decent, no junk, and it is all commercial stuff from the big name manufacturers. It has all been well maintained and everything I am listing is in at the very least above average to good condition for it's age and every piece has a lot of life left in it and a lot of revenue to generate before it will need replaced.

Main work truck (add 10k)

Utility Pickup
Truck with spray rig mounted
2 52" ZTR Mowers
3 Walk Behinds
Commercial Trim Mower
Aerator
Z Spray
Power Rake
2 Lesco Spreaders
3 trimmers
1 back pack blower
2 hand held blowers
2 open landscape trailers

These are just the greatest hits.... several hundred if not several thousand dollars worth of small stuff, hand tools, attachements, miscellaneous, etc.

Bottomline--There is no way that 65K is not a very fair and reasonable asking price for what is being offered. Like I said...I really think this package is best geared for the person just starting out who wants a turnkey business. For that guy debating college why spend 65k to go to school for 4 years, have trouble finding a decent job and spend your life working for the man. Buy this business,keep on building it, and in 4 years you will be making 75k plus a year while your buddies are trying to find 20k entry level jobs to pay there 50k in student loans. You will be laughing as you're debt free and looking at houses while they are trying to make the rent in a one bedroom apartment with a roomie. They will be begging you to help with Saturday mulch jobs for beer money..Imagine your satisfaction watching them out there working their little college degreed butts off in the boiling sun as you drive in your nice air conditioned 30k truck from one job site to another to check on their progress...ok, so I am joking around here but you have to admit you like the thought....

I could go on and on here but need to get busy with something actually productive...Lol....More thoughts to come.....

RABBITMAN11
01-25-2011, 01:33 PM
And why are you selling?



>


>>Too high. I have nothing to do with your sale but assuming on average 1 customer is $1000 gross per year. You would have 65 customers that you are mowing "for free" for the first year while paying overhead out of your own pocket. Too high IMHO.
Posted via Mobile Device <<<<

Note: This response is also addressing several PM's and not just the comments of the 2 responders above. So if it strays from the point of just these 2 comments it is also responding to others.

Yeah 3 or4 times running the route is about right if you were buying solid accounts with no other intangible assets to go with them and no physical assets at all. I have looked at several LCO's over the last several years and have bought a few accounts here and there and pondered buying buttloads more that were unreasonably priced. My general rule of thumb on buying a simple straightforward mowing account is 3 to 5 times the price of one service depending on how much I trust the sellers intention, how well the account fits into my route and my general gut feeling as well as certain other factors.

I would like to know where I can buy a profitable and growing turn key business for .65 on the annual sales dollar of what sales should be my first year in business unless I totally Eff things up. Especially one that can be run with a minimal overhead relative to most business types and where only a very small percent of sales is reinvested in inventory that has to be flipped. If you hear of some good deals like this please let me know. I am always eager to own a business that can fully repay the initial investment in a year or maybe two if I manage it properly and don't have to take out much money to live on. When I started this thing I didn't anticipate making any money (personally) the first few years. If your planning to start a business and get paid regularly the first few years maybe you should just go find a job.

I know there are 2 schools of thought on this matter in this industry. I realize due to the low barriers of entry involved in this business a lot of guys start out with a beater pickup and a small trailer and a $500 walk behind they fix up and maybe a few hundred in the bank and a 1000 flyers to put out. I am not knocking this method at all. I know there are a ton of guys on this site who did just this and are vastly more successful than I am. Maybe these guys even made decent money their first year out of the gate.

However, I went the other route with my business. I made some pretty substantial investments (relative to the average in this industry) for a small start up LCO. I spent a good amount of money to equip my business and to market it and advertise it and brand an image. While other guys who started about the same time I did were starting to take decent chunks of money out of their businesses I was reinvesting in mine. My point here is that most "business" people realize that a viable business is an investment that is not expected to pay for itself the first year. I don't see how according to some peoples math you are working for "free" the first year....that's ludicrous....An individual who is a real go getter and was very diligent in managing overhead and labor costs could work 9 months for "free" and be very close to out of debt and own a 100k a year business with all the physical assets required to produce said 100k.

I think $35k for the business side of an LCO doing 100k a year is very reasonable. I know the old argument.... "well I can spend half of that in advertising and I will generate those sales in a year" and that is just nonsensical BS. It takes a lot of time, effort and planning to build relatively tight routes with good paying customers. It doesn't just all fall into place with a few decent advertising campaigns. Throw in the fact, that to name a few assets....I am including an established phone number, website, established reputation,tons of goodwill, at least 3k of pre-paid yet to be used advertising mediums, lead books, items such as forms and service agreements etc...which all took time and money to produce, transition assistance, the cumulative affect of several years of advertising and marketing and maintaining a high visual presence in my target market to an upscale demographic...I think most would agree the higher visibility your LCO has the easier it is to grow business....I am at a point where my word of mouth and visibility continue to grow my business without the need to constantly advertise...I could go on and on...but bottomline-this is a little more than buying some accounts....

Now when we look at the 65K package lets consider the equipment we are getting to run this business. As I stated in original post I don't want to reveal my business identity on a large scale. It is on a need to know basis. That being said I can't list specefic vehicles and what type of equipment I run because that could very easily tip my hand to guys working in my area. Lets just say that all of my equipment is decent, no junk, and it is all commercial stuff from the big name manufacturers. It has all been well maintained and everything I am listing is in at the very least above average to good condition for it's age and every piece has a lot of life left in it and a lot of revenue to generate before it will need replaced.

Main work truck (add 10k)

Utility Pickup
Truck with spray rig mounted
2 52" ZTR Mowers
3 Walk Behinds
Commercial Trim Mower
Aerator
Z Spray
Power Rake
2 Lesco Spreaders
3 trimmers
1 back pack blower
2 hand held blowers
2 open landscape trailers

These are just the greatest hits.... several hundred if not several thousand dollars worth of small stuff, hand tools, attachements, miscellaneous, etc.

Bottomline--There is no way that 65K is not a very fair and reasonable asking price for what is being offered. Like I said...I really think this package is best geared for the person just starting out who wants a turnkey business. For that guy debating college why spend 65k to go to school for 4 years, have trouble finding a decent job and spend your life working for the man. Buy this business,keep on building it, and in 4 years you will be making 75k plus a year while your buddies are trying to find 20k entry level jobs to pay there 50k in student loans. You will be laughing as you're debt free and looking at houses while they are trying to make the rent in a one bedroom apartment with a roomie. They will be begging you to help with Saturday mulch jobs for beer money..Imagine your satisfaction watching them out there working their little college degreed butts off in the boiling sun as you drive in your nice air conditioned 30k truck from one job site to another to check on their progress...ok, so I am joking around here but you have to admit you like the thought....

I could go on and on here but need to get busy with something actually productive...Lol....More thoughts to come.....

turfquip
01-25-2011, 08:47 PM
You can rationalize and reason yourself into believing it is worth whatever you want to....

Fact is, intangibles have minimal value.

And, unless you are a Chemlawn, or a Brickman, your 'branded image' has no value either. Not likely people will remember your name a year after your operation is dissolved.

Not trying to bust your chops. You seem like a guy with a bright future but for now a little naive.

If you can find someone to pay you 65K for what you have then good for you. As a practical matter, your operation is worth as I said, three to five times the route plus the blue book value of the equipment.

Cheers

oldclawn
01-25-2011, 11:13 PM
Find yourself a business broker like Sunbelt and let them help you! They will do your talking for you, help you come up with a fair and reasonable valuation, and guide both buyer and seller through the transaction. Your accountant and the business broker will be able to come up with a price that will possibly attract a buyer! All transactions have to be mutually beneficial!
For the record I have been actively involved in lawn and landscape for 38 seasons and sort of know my way around Indpls and Central Indiana. What I have seen and actually participated in as sales were closer to 3x actual cash flow for quantifiable recurring work and 1X actual cash flow for non recurring work. +/- equipment-negotiated.
Your business has to be attractive to PROSPECTIVE BUYERS.

brian1425
01-27-2011, 01:07 PM
So has there been any interest at the price you are asking? I am curious with all the negative feedback you have received.

shawn d
01-29-2011, 12:49 AM
Sounds like you have a good operation for sale.

Good luck with your sale :usflag:

tony b
01-29-2011, 08:47 PM
I always think it's funny when a guy places an ad trying to sell his business and everyone has to slam him for it. I personally have been in business for 20 + years and have about 2x the clients and would NOT take less than $250,000 for my business!!! It would take that to set myself up in something else where I could have an income of equal value. I don't think your out of line at all (especially if the equipment goes with it). Just my 2 cents.

oldclawn
01-29-2011, 10:11 PM
Just because your business is attractive to you does not make it attractive to prospective buyers!!

Time To Sell
01-30-2011, 03:58 PM
So has there been any interest at the price you are asking? I am curious with all the negative feedback you have received.

Yes I have had some interest. I pretty much just take it with a grain of salt considering the only 2 places I have posted the sale are Lawnsite and Craigslist....I realize chances are your not going to find a serious buyer using either of these mediums. (If I ever get really serious about selling I guess I will need to explore some other avenues).... I mean of course I am going to get more negative feedback than positive on lawnsite. I mean it is a usefull site and there are a lot of great guys on it and I have got a lot of good information over the years but........it's freakin lawnsite..... & Craigslist...nuff said!!

I do plan to debate some of the negative feedback when I have time and nothing better to do....It just shocks me some of these guys put so little value on what they do, although I am sure some of these same guys will sing a much different tune when the day comes they try to assign a sales value to their own business.

There are 1000's of methods and theories for valuating a business...At the end of the day the simplest valuation theory is that point "where a seller under no pressure to sell and a buyer under no pressure to buy" agree what a business is worth. I am sure at some point I will find that person. I will wait for that individual....ofcourse the price may continue to rise in the interim.....another record sales year and an economy close to being Obamafree might drive the 2012 price higher :)

I haven't really taken the sale of the business that seriously to this point. I tinkered with it last fall and showed it to a couple different potential buyers....both people I showed it to were already in the industry and great guys but for various reasons neither went very far....I don't really know what level price played in either case with things not progressing. I mean
of course every buyer is always going to say "I think your price is a little high", but I think logistics and other factors also played a role in these decisions.

After these two showings I got real busy in the mid to late fall and just kind of put the whole thing on hold. I got a bunch of e-mails and calls besides the 2 sets of people I actually met with, but I screened most of them out before it came to a meeting. Until this most recent post I had made no effort to advertise the sale since back in the early fall.

I am under no pressure to sell...I don't need to sell or have to sell I simply want to sell. I have no qualms about rolling up my sleeves and running a tight ship this year and making some nice money for 8 or 9 months of hard work. In fact, I have been spending a whole lot more time gearing up for the pending season and getting everything ready for a solid 2011 than I have worrying about selling. I just figured I would throw it back out there and see if I there was any interest.

I know one thing....I sure am not giving the thing away. I didn't see any business valuation that suggested the non physical asset side of a service business was worth less than 10% of it's gross annual sales as many here would seem to indicate.....I will hire a manager/main employee and run the thing as an absentee owner and look at is an investment before I will ever sell it for total chump change. I don't really want that headache....but it is an option I am considering.

But a more direct answer to your question is yes....I do have some interest stemming from my renewed decision to see if I might sell before the 2011 season begins....I have had conversations with a few guys (one very serious) that I know will be resulting in a meeting most likely this very week. Ironically, the most promising buyer I am currently in discussions with was a lead provided to me by my accountant. On a side note: my accountant actually thinks I may be selling myself a bit short on the asking price. He is not an expert on the lawn industry, just small business in general....I also have several e-mails I am in the early stages of correspondence with. The guy my accountant put me in touch with is sounding about as promising as I can imagine. I am going to see what happens with him in the next few days and take it from there.

I actually am preparing to go dust off the equipment today and tidy up a bit in hopes I will be showing the business to him this week....I am expecting a call tomorrow to finalize that meeting.

Don't sell yourself short guys!! Your business is worth more than some of these guys think!!

oldclawn
01-30-2011, 04:14 PM
Nice pep talk. It pays to have a positive frame of mind.

grassman177
01-30-2011, 05:22 PM
the five times route of a business plus blue book on equipment is the going rate. whatever that is for you is the correct price.

i did make a decision based on what i know to be true, i did not look at your numbers and do any math to bias myself against you.

also, this is merely a starting point, but at an average.

MowingMowingMowing
01-30-2011, 07:48 PM
Have you tried selling on places like http://www.bizbuysell.com/

yard_smart
01-31-2011, 11:53 AM
MY basic principle for a business is 2x to 3x the NET Profit Number.

So if you are doing 100k
You would need to have 20% margins to make you price look right.

I honestly don't see being able to sell a company that only does 100k gross sales.
The owner will make what? 25K a year.
Unless this is a hands off operation which at 65k i'm sure it's not, there is no way these numbers jive.

I would be interested in talking with you if you would consider 32k
info@easypropropertyservies.com

stang2244
01-31-2011, 04:23 PM
MY basic principle for a business is 2x to 3x the NET Profit Number.

So if you are doing 100k
You would need to have 20% margins to make you price look right.

I honestly don't see being able to sell a company that only does 100k gross sales.
The owner will make what? 25K a year.
Unless this is a hands off operation which at 65k i'm sure it's not, there is no way these numbers jive.

I would be interested in talking with you if you would consider 32k
info@easypropropertyservies.com

I think this and many others are way off base. The equipment alone has to be worth 25k at a bare minimum. So you are giving 7k for a 100k grossing business? You're nuts. Granted not all accounts are gauranteed to be there after the transfer, if you do a good job it shouldn't be hard to keep a very high percentage of them. Also, who is to say the owner will only make 25k a year off of 100k gross? I am in the same relative ball park as far as gross and making MUCH more than 25k when it's said and done each year. I agree with the person who said people are undervaluing their landscape businesses.

yard_smart
01-31-2011, 08:15 PM
I think this and many others are way off base. The equipment alone has to be worth 25k at a bare minimum. So you are giving 7k for a 100k grossing business? You're nuts. Granted not all accounts are gauranteed to be there after the transfer, if you do a good job it shouldn't be hard to keep a very high percentage of them. Also, who is to say the owner will only make 25k a year off of 100k gross? I am in the same relative ball park as far as gross and making MUCH more than 25k when it's said and done each year. I agree with the person who said people are undervaluing their landscape businesses.

I meant 25k a year if it's hands off.
the funny thing about this business much like other small businesses is this:

Say you gross 100k a year.
If your owners salary is 30% of your gross which is high that's 30k
If you work ONLY 40 hrs a week that puts you at 14/hr before taxes
I dunno about you but as a business owner I work atleast 55 hrs some times more than that a week.
but for simple numbers say it averages out to 55 now your at 10.48 which after taxes takes you down to making around minimum wage.

My point is GROSS $$$'s don't mean anything!
It's a combination of NET profit, Debit the Company has and Owner Salary

I buy this company at 65k on a 10 year fixed loan its going to cost me $8,640

Basic business numbers break down like this
100k gross
15% marketing&advertising
20% Owner Salary
30% Labor
15% Fuel, Utilities, Repairs and Maintenance
Leaving 20% NET Profit (which is very generous)
Out of that 20k is $8,640 worth of loan payments Leaving me $11,360
It would take me 6 years to get back the asking price. It's just not a feasible investment.
Now then take that $11k Multiply that by 3 and you got the $32k to $34 k price tag which i stated.

The equipment when buying a company is worth 1/2 the blue book value because you have to figure in the time and interest it will cost to unload it if things go south.

Another thing that raises to attention is that We did over 100k our second year with only one crew. The numbers just don't shake out for me.

Doesn't mean he won't find some one with half a$$ credit that is willing to pull a 65k loan to work for minimum wage all i'm saying is too many guys get their rocks off seeing a long list of equipment.

I would have to see a P&L, Balance Sheet and most importantly a Cash Flow statement to even consider the 30k mark.

yard_smart
01-31-2011, 08:16 PM
I meant 25k a year if it's hands off.
the funny thing about this business much like other small businesses is this:

Say you gross 100k a year.
If your owners salary is 30% of your gross which is high that's 30k
If you work ONLY 40 hrs a week that puts you at 14/hr before taxes
I dunno about you but as a business owner I work atleast 55 hrs some times more than that a week.
but for simple numbers say it averages out to 55 now your at 10.48 which after taxes takes you down to making around minimum wage.

My point is GROSS $$$'s don't mean anything!
It's a combination of NET profit, Debit the Company has and Owner Salary

I buy this company at 65k on a 10 year fixed loan its going to cost me $8,640

Basic business numbers break down like this
100k gross
15% marketing&advertising
20% Owner Salary
30% Labor
15% Fuel, Utilities, Repairs and Maintenance
Leaving 20% NET Profit (which is very generous)
Out of that 20k is $8,640 worth of loan payments Leaving me $11,360
It would take me 6 years to get back the asking price. It's just not a feasible investment.
Now then take that $11k Multiply that by 3 and you got the $32k to $34 k price tag which i stated.

The equipment when buying a company is worth 1/2 the blue book value because you have to figure in the time and interest it will cost to unload it if things go south.

Another thing that raises to attention is that We did over 100k our second year with only one crew. The numbers just don't shake out for me.

Doesn't mean he won't find some one with half a$$ credit that is willing to pull a 65k loan to work for minimum wage all i'm saying is too many guys get their rocks off seeing a long list of equipment.

I would have to see a P&L, Balance Sheet and most importantly a Cash Flow statement to even consider the 30k mark.

Looking back over this I didn't even include income tax which is about 15%

yard_smart
01-31-2011, 08:18 PM
So you are giving 7k for a 100k grossing business?

YES! Another way to look at this is the 10% rule you want 10% of your gross to be spend on advertising i.e. purchasing accounts.

stang2244
02-01-2011, 12:05 AM
I feel bad enough for hijacking this thread but I want to make a few final points...with my gross numbers being in the same ballpark as the OP's last season, I can tell you(YARD-SMART) that your numbers are not on par with actual real world numbers. My labor was right at 20%, not 30%, marketing and advertising doesn't need to be 15% to start out, especially when you are buying up a company. The marketing percentage could be 0 and you would still be at that 100k revenue level. Finally, let's remember that this business is seasonal, so 40hr work weeks would only apply to the growing season(this means about 1120hrs over a calendar year vs. 2000hrs for a year-long job). I do snow removal in the off season and that is it. I haven't put in 40 hrs, or even 20 hrs in a single week since early November. I guess my point is some people don't think the numbers are right which is fine, don't buy it, but there is plenty of money to be made at the asking price.

yard_smart
02-02-2011, 06:10 PM
I would venture to say 80% of the "companies" on here couldn't post a PL, Balance Sheet & Cash Flow Statement if it meant loosing their business. I'm simply saying that the number in the REAL WORLD don't jive and if you aren't working 40 hours a week year round it not a business. There is no such thing as a SEASONAL business that BS! I've closed 20k worth of work this week. Clients buy year round!

stang2244
02-03-2011, 02:42 AM
Well I guess it's just a hobby then, but my hobby makes me enough money in the warm months to not have to do a whole lot in the cold months. I do 98% maintenance(mowing/cleanups/shrub trimming/etc.) with some very light landscaping mixed in there throughout the warm months. When it gets cold here in Colorado I put my mowers away and do snow removal when it comes. Obviously there is time spent at the beginning and end of each year trying to gain new accounts, but not for 40hrs through the entire winter. I've got liability insurance, workmans comp insurance, pay taxes, etc... my numbers don't look like the figures you put up, it's that simple. So call it what you want to call it. PM me if you want to go on more about this, I think the moderator should delete all these irrelevant posts from this thread anyway.

Gone Green
02-17-2011, 10:52 PM
Anybody completed a sale on about a 100K in annual sales landscape maintenance company?? what was the multiple of EBITDA and general location? terms (money down versus seller financed)?

brookline
02-18-2011, 03:46 AM
Sooo has anyone considered the fact that if the guy is posting it on here another company buying the operation would value it completely different than someone starting with nothing? Yes if you are looking to ABSORB another business you would only want to pay 3-5x the weekly route (summer only winter snow removal extra) plus equipment. This would not be the opportunity for you. In that case you need to find someone desperate for a quick sale. This is for someone starting with no equipment, customers ect. If that is not who he thinks will buy his business then he will be waiting a long time. As a business owner i would not need his website advertising mediums or his advertising budget because i already have my own in place that already works. So the 15% of that $100k for advertising would no longer apply if i absorbed his business. nor would i need any of his software and things of that nature. Like i said this is for someone off the street and the numbers that were rattled off would be for such. But if im paying myself $30K out of that $100K on top of what i already make from my own, thats a nice raise. Just my $.02

turfquip
02-18-2011, 07:51 AM
Hey Yardsmart.....FYI

There are several typos on the splash page of your signature's website.

Stuff like that gives the perception that Kentucky folks are a little misedumacated :-)

Also, Racers not listed?

oldclawn
02-18-2011, 11:27 PM
please got let this stupid thread die.....................

GT Lawn
02-07-2012, 04:07 PM
after all this, I just want to know if the business is still available? we have expanded our company to Indy, and interested in talking details.