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missouri tom
10-10-2011, 02:37 PM
I have been interested in buying a lawn care business. I have found someone who is interested in selling. The value of his equipment is not to tough to figure but how do you value the worth of his accounts?

32vld
10-10-2011, 10:00 PM
Are these accounts signed to long term contracts?

When a business is bought it should bring in enough money to pay off/back what the business cost in two to three years.

Usually a LCO's customers can't be guaranteed to stick around after the sale. Then many seller's inflate the number of actual customers.
This is why most people when buying only are willing to pay for equipment.

You need to have an account go over the owners books, sales tax and income taxes to verify sellers claims.

Also need to get the seller to sign a no compete clause.

missouri tom
10-11-2011, 12:19 PM
Thank you for the advise. I intend to have my financial advisor go over the books. I have not seen the equipment but based on preliminary asking price he wants money for the accounts.