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View Full Version : determining how much to sell business for?


stephen424
04-20-2011, 06:10 PM
For those that have sold or have bought accounts from someone, how do you determine how much to sell your biz for. I may be headed back into engineering and don't really want to juggle two careers. If someone was intererested in buying my accounts, do I sell for 1 months gross? 2 months? 3??
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THEGOLDPRO
04-20-2011, 06:12 PM
I refuse to buy accounts because there is no guarantee the customers will stay with the new guy.

stephen424
04-20-2011, 06:53 PM
Thanks for your input goldpro. This thread is for ppl who have bought or sold accounts tho.
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johnyredd99
04-20-2011, 07:04 PM
i have purchased accounts in the past. but would not pay more then 1 months gross. It is a very large gamble if the customer will stay w/ you or not. I have found that after purchasing that most customers were about to drop the previous person due to lack of quality.... but in all reallity an account is worth nothing. very easily you could underbid the current person by a couple bucks and explain his situation. bad morals and business i know but some people have it coming to them

stephen424
04-20-2011, 07:10 PM
I could see a snake doing that, but that's when a business deal becomes personal...and gets ugly.

So one months gross!
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Golfpro21
04-20-2011, 08:10 PM
if you can guarantee that the customer is going to stay with the new owner..then perhaps...otherwise I would not pay a cent....I would simply quote teh cleint for my work and show local work and references and perhaps get the account anyways

A-Land
04-20-2011, 08:39 PM
It's really all about numbers. If you have a couple hundred accounts, under contract, crews, equipment, it's worth money. If you're just doing it on the side, it's "worth" money to you, but you shouldn't expect to get anything out of them.

Honestly your best bet would be giving them to a friend who can handle them, and if you want to get back into the industry in the future, maybe you can get some of them back.

stephen424
04-20-2011, 08:49 PM
if you can guarantee that the customer is going to stay with the new owner..then perhaps...otherwise I would not pay a cent....I would simply quote teh cleint for my work and show local work and references and perhaps get the account anyways

ppl like you are really clueless. like i'd actually drive someone like you around and show them the potential clients without having a signed/notarized "back stabber" agreement in place.

i definately wouldn't take a random guy to all my properties and say "here's one i charge $50 for...here's one for $40"

stephen424
04-20-2011, 08:50 PM
PLEASE DON'T RESPOND IF YOU'VE NEVER SOLD NOR PURCHASED ACCOUNTS. we all have opinions whether we'd do it or not...i get that!!

but i'm trying to get some knowledge from someone that's done it

sgrenier24
04-20-2011, 08:58 PM
I was laid off about three years ago and bought out a local lco that was giving up the business to become a teacher. I bought the business for two months of gross plus all his equipment. It included 25 accounts and two exmark mowers, all shindaiwa trimmers, blowers etc and a descent trailer. He had 24 accounts that were not on contracts. I took a gamble and so far it has paid off. I still have the original 25 and have grown to almost 50 accounts with no advertising. All of my new accounts came from referrals of the original 25. If you handle the transition professionally and take pride in your work you should not have any problems. Just make sure you have he seller sign a no-compete clause in the deal or walk away.
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sgrenier24
04-20-2011, 09:14 PM
Forgot to add that I did not pay him in full upfront. In our contract we set an amount that was witheld in case he customers ran for the hills. At the end of the season, if the percentage of customers that we previously agreed on were still using my services he would be paid the balance. I even went as far as offering a bonus for any further referrals he passed on to me. He had run this business for about 12 years part time and still was getting phonecalls for work.
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stephen424
04-20-2011, 09:38 PM
Thanks man
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Woods Edge
04-20-2011, 09:57 PM
I recently sold my business after 16 years. The sale price
was a combination of fair market pricing for individual assets ( trucks, mowers, tools) and a percentage of sales from the previous year. Feel that I negotiated a pretty good deal for myself @ 29%. :)

Woods Edge
04-20-2011, 10:04 PM
Should also mention I also purchased accounts 14 years ago when a former employer went out of business.
Purchased those accounts @ 17% of gross sales.
Feel I made out pretty good then too :)

So I suggest buying at 17% and selling at 29% :)

meets1
04-20-2011, 10:10 PM
I have bought accounts - or should I say others out and one this spring who was re-organizing and going exclusive landscape. I have purchased equipment from those deals as well. retention rate of 80% roughly. I look at it this way - i can advertise all I want, beat doors, try to undercut only to try to raise prices in a year or so or I keep in good contact with some low key LCO and when there ready to move on I am there.

I also paid a % of gross but also figured in trade in value of equipment. I am still here after X years and were doing it so I am thinking for you, go with 20-30% and see what happens. Buyer can always negioate down. you just need a starting point.