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Landscraper1
02-24-2012, 09:56 AM
Lately, I have been contacted by a sales broker(about 3 times in the last month), to go over the possibility of selling my business. He is looking into it for a large multi-million dollar LC that is interrested in buying my company. :)

This got me thinking, should I even consider an offer? I know I can get about $1mil for it but, what then. I am in good financial condition, the company is doing great, and I am only 45. I have always thought of selling when I retire in the future. Now is too soon, but who's to say I would have someone to buy later.:confused:

What would you do?

White Gardens
02-24-2012, 10:04 AM
If you could get one million for it, then I'd go for it.

Invest the money, live off the interest and get a part-time job until you retire.


.....

ox6603
02-24-2012, 10:17 AM
Bah, don't sell. Heck maybe not ever. If you can find a competent person to run it when you're ready to retire you can just sit back and collect. Or really I should say, if you can find that person NOW, and groom them until you retire.

32vld
02-24-2012, 10:27 AM
Lately, I have been contacted by a sales broker(about 3 times in the last month), to go over the possibility of selling my business. He is looking into it for a large multi-million dollar LC that is interrested in buying my company. :)

This got me thinking, should I even consider an offer? I know I can get about $1mil for it but, what then. I am in good financial condition, the company is doing great, and I am only 45. I have always thought of selling when I retire in the future. Now is too soon, but who's to say I would have someone to buy later.:confused:

What would you do?

Just another poster that leaves out the important facts but wants good advice.

Is your home paid off?
If you want to move after you retire or buy a second retirement home can you afford to?
Is your business debt free?
Are you debt free?
How much is your personal wealth?
How much is your business assets worth?
Is your business growing, or has it leveled off, do you want to grow it more, is there room for growth?
How much more income/profit will your business bring in when you hit 55, 62,67?

If you can make another $1 mil profit then you can still sell your business for that big offer in ten more years.

Do you have children that will want to take the business over?

What you think is being in good financial health and the answers to the above questions may not match.

What money has this broker offered?

Remember the first offer is not their best offer.

Not knowing where you are financially getting $1,000,000 will net you less after paying taxes on the profit of the sale.

Even if you cleared 1 mil at 5% interest that will yield $50,000 a year before taxes will net $38,000.

You tell us can you live on $38,000?

Heck anyone can live on $38,000 a year.

Will $38,000 give you the life style you want if you live for the another 45 years?

Then being 45 what do you do to keep mentally and physically active to stay healthy?

Or did you not really post to get answers or just brag that you can sell your business for $1,000,000?

Which is just equally annoying.

No matter what your motivation for posting this I have to congradulate you on your success. I'm sure 9 out of 10 posters here (I am one of the nine) hope to get a business worth that much.

Landrus2
02-24-2012, 10:28 AM
Lately, I have been contacted by a sales broker(about 3 times in the last month), to go over the possibility of selling my business. He is looking into it for a large multi-million dollar LC that is interrested in buying my company. :)

This got me thinking, should I even consider an offer? I know I can get about $1mil for it but, what then. I am in good financial condition, the company is doing great, and I am only 45. I have always thought of selling when I retire in the future. Now is too soon, but who's to say I would have someone to buy later.:confused:

What would you do?

if he pays cash don't look back :weightlifter:
how many employee's you have :confused:

prizeprop
02-24-2012, 10:28 AM
the first thing i would do is find out what your tax liability is on that million, i assume 35% +/-.

MOturkey
02-24-2012, 10:39 AM
That's about $999,000 more than my business is worth, but here is my advice, for what it is worth. First of all, after brokerage fees and Uncle Sam, you probably are going to end up with substantially less than one million. Investing is great, but unless you put it into something really safe, there is a huge risk in today's economic climate. Something really safe normally translates to a very low return. I'm guessing if your business is this successful you and your family are accustomed to a pretty good lifestyle, which means in all likelihood, you would be tapping into the principal on a pretty regular basis to maintain your lifestyle. In reality, what type of income could you expect from a part time job, and could you be satisfied with that after running what I assume is a fairly large company?

You are only 45, which means there is a very good chance you will live another 40 years or more, and, in all likelihood, inflation is going to keep on marching along just like it has for the last 40. I'm not trying to tell you not to go for it, but you really need to run a lot of numbers to see if it is prudent to do so. Early retirement is great, but the one thing I've observed through the years is the number of people who retired early and now complain that inflation has eaten up what they, at that time, thought was a very good income. I likely will be faced with the same situation if I live another 20 years, but I retired at age 58, so, statistically, I have far fewer years than you to plan for. Good luck to you.

fastlane
02-24-2012, 12:00 PM
Will your non compete agreement stop you from starting a new company or only contacting current customers ?

snomaha
02-24-2012, 02:04 PM
Lately, I have been contacted by a sales broker(about 3 times in the last month), to go over the possibility of selling my business. He is looking into it for a large multi-million dollar LC that is interrested in buying my company. :)

This got me thinking, should I even consider an offer? I know I can get about $1mil for it but, what then. I am in good financial condition, the company is doing great, and I am only 45. I have always thought of selling when I retire in the future. Now is too soon, but who's to say I would have someone to buy later.:confused:

What would you do?

Just curious - how do you know it is worth 1m? have you had a valuation done?

Landscraper1
02-24-2012, 04:11 PM
Just another poster that leaves out the important facts but wants good advice.

Wow, alot of questions, some I don't think really matters but, I will try to answer.

Is your home paid off? No

If you want to move after you retire or buy a second retirement home can you afford to? Yes

Is your business debt free? No, very little debt.

Are you debt free? No, and never expect to be until 65.

How much is your personal wealth? Outside the business, close to $2mil.

How much is your business assets worth? about $250K

Is your business growing, or has it leveled off, do you want to grow it more, is there room for growth? I don't want it to grow much more

How much more income/profit will your business bring in when you hit 55, 62,67? Profit approx $100k a yr.(not including salary)

If you can make another $1 mil profit then you can still sell your business for that big offer in ten more years. True

Do you have children that will want to take the business over? All girls, no interest

What you think is being in good financial health and the answers to the above questions may not match. You decide

What money has this broker offered? None, he wants to meet, look over my financials, go over the assets, and the contracts I current have. This is not something I am willing to do, unless I am seriously ready to sell.

Remember the first offer is not their best offer. Obviously

Not knowing where you are financially getting $1,000,000 will net you less after paying taxes on the profit of the sale. Another obvious fact

Even if you cleared 1 mil at 5% interest that will yield $50,000 a year before taxes will net $38,000. Any money made from this sale, would be invested to get more than 5%.

You tell us can you live on $38,000? No

Heck anyone can live on $38,000 a year. Not me, now.

Will $38,000 give you the life style you want if you live for the another 45 years? After my girls are raised and done with college, yes.

Then being 45 what do you do to keep mentally and physically active to stay healthy? Have other investments to keep me going.

Or did you not really post to get answers or just brag that you can sell your business for $1,000,000? Not bragging, just second guessing myself every time I shoot this guy down.

Which is just equally annoying.

No matter what your motivation for posting this I have to congradulate you on your success. I'm sure 9 out of 10 posters here (I am one of the nine) hope to get a business worth that much.



I know that after answering these questions, many might be thinking, if the business is doing so well, than why think of selling? Well, the is one question that was not asked " How's your health ".

I have a rare condition that is currently under control. I feel fine and continue to work with no problems except for many doctor's visits and tests. Right now the business is running smoothly and is profitable, which makes it very easy to sell. The problem with the business is that I control everything. If something happens to me, this business will suffer greatly. Making it worth much less. I could be fine for many years to come or I can develop Cancer tomorrow.

So, now that you have all this info, what do you think?

JB1
02-24-2012, 04:16 PM
i wouldn't hesitate, i would sell.

Landscraper1
02-24-2012, 04:20 PM
if he pays cash don't look back :weightlifter:
how many employee's you have :confused:

19 employees currently

aaron79mowing
02-24-2012, 04:24 PM
If you don't feel confident in you ability to keep it long term, then as long as its a good offer you should sell. I agree, it would be a terrible thing if you had problems down the road and the business tanked. Also if you didn't have to work anymore, perhaps it would be better for your health and well being especially by eliminating all the stress that comes with ownership.

Landscraper1
02-24-2012, 04:25 PM
Will your non compete agreement stop you from starting a new company or only contacting current customers ?

Stop me from starting a new company or working for another.

Landscraper1
02-24-2012, 04:39 PM
Just curious - how do you know it is worth 1m? have you had a valuation done?

Through the past few years I have spoken to a few Lc's that have either sold or have had offers. I knew that some day I would have to sell so, I gathered as much info on what these larger companies are looking for and modeled my business to match that. I also have a very good idea what they go by to figure out the value of the business.

$1 mil would be an offer on the low end. The business is profitable. Grossed $1.4 mil last year, has quite a bit in assets, and a great customer base.

nepatsfan
02-24-2012, 04:44 PM
Through the past few years I have spoken to a few Lc's that have either sold or have had offers. I knew that some day I would have to sell so, I gathered as much info on what these larger companies are looking for and modeled my business to match that. I also have a very good idea what they go by to figure out the value of the business.

$1 mil would be an offer on the low end. The business is profitable. Grossed $1.4 mil last year, has quite a bit in assets, and a great customer base.

Impossible...you don't have enough posts on lawnsite to gross that much:drinkup:

Mahoney3223
02-24-2012, 04:58 PM
Impossible...you don't have enough posts on lawnsite to gross that much:drinkup:

:laugh: that's funny. I agree, because according to almost all the guys on here, most everyone on this site does well over 1 million in sales with 20 employees :dizzy:

Landrus2
02-24-2012, 05:03 PM
19 employees currently
Y
That's like 600 k in payroll .:confused:
What do you pay in Workman's insurance :waving:

snomaha
02-24-2012, 05:22 PM
Through the past few years I have spoken to a few Lc's that have either sold or have had offers. I knew that some day I would have to sell so, I gathered as much info on what these larger companies are looking for and modeled my business to match that. I also have a very good idea what they go by to figure out the value of the business.

$1 mil would be an offer on the low end. The business is profitable. Grossed $1.4 mil last year, has quite a bit in assets, and a great customer base.

Have you ever looked at doing a succession plan? Maybe a key employee or group of them? Did one a few years back that maps out exactly what would happen if i were ready to sell, disabled or die. Included potential buyers both internally and externally, stay bonuses for key people, tax minimization and personal financial needs after stepping away from the business.
Similar to your comment - it gave me clarity on what brought value to my business (reoccurring revenue stream, documented processes, profitable).

Landscraper1
02-24-2012, 05:44 PM
Y
That's like 600 k in payroll .:confused:
What do you pay in Workman's insurance :waving:

approx $500k for payroll

approx $30k worker's comp

Efficiency
02-24-2012, 07:17 PM
Since its tax season this should be an easy answer - whats your EBITDA? That will drive ALOT of your valuation. I walked from an offer a few weeks back. It included a 150% premium on my salary too.

32vld
02-25-2012, 10:12 PM
I know that after answering these questions, many might be thinking, if the business is doing so well, than why think of selling? Well, the is one question that was not asked " How's your health ".

I have a rare condition that is currently under control. I feel fine and continue to work with no problems except for many doctor's visits and tests. Right now the business is running smoothly and is profitable, which makes it very easy to sell. The problem with the business is that I control everything. If something happens to me, this business will suffer greatly. Making it worth much less. I could be fine for many years to come or I can develop Cancer tomorrow.

So, now that you have all this info, what do you think?

Any one can appear healthy and wind up taking a dirt nap the next day.

So you saying your sick does not mean anything unless your doc says how much time you can do the work, how long you have left to live.

Then if the doc sees you living long term but not able to do the work but you can still do the sales and management and let field managers to the stressful work.

The possibilities of what if's is endless so I will not even try to do any more.

Again you leave the original questions unanswered.

You make another announcement that does nothing to clear the situation but only adds a 10 cubic yard load of new questions to the original list of questions your first announcement created.

In the end you as any one else has to take in the hold story to come up with the best answer. Everything is not black and white and sometimes it needs to be.

NC Greenscaper
02-26-2012, 08:49 AM
Lately, I have been contacted by a sales broker(about 3 times in the last month), to go over the possibility of selling my business. He is looking into it for a large multi-million dollar LC that is interrested in buying my company. :)

This got me thinking, should I even consider an offer? I know I can get about $1mil for it but, what then. I am in good financial condition, the company is doing great, and I am only 45. I have always thought of selling when I retire in the future. Now is too soon, but who's to say I would have someone to buy later.:confused:

What would you do?

Really only you can answer that question. Do you enjoy coming to work? Do you look forward to the challenges that your business brings every day? If you don't enjoy it, then it is simply what makes more money sense question and you should be going over those numbers with your accountant. However, I look down the road and think, 'Now what?'. What will you fill the space with?

A-Land
02-26-2012, 11:49 PM
Before going any further, you should check out what the broker has been up to. Be very wary of anybody that is asking to come in and look at the books. They should have no problem disclosing the deals they have been working on if they are a legit broker. This economy has forced a lot of people to get into things they are not qualified to do in order to try to make ends meet. It doesn't make them bad people - folks are just desperate.

The answer to "should I sell" is obviously one that goes beyond numbers. But if you just look at the scenario - best case - you have one million in cash. Is there something else you can do with it that you have experience in? Would you know how to handle rental property? Putting that money into a CD to earn 5% is not going to happen now or anytime soon so the theoretical $50,000/year that asset might generate is a little easier said than done.

The best answer is probably to look into hiring a consultant to come in and look at your business and see their independent opinion and weigh it against your health. Maybe it would be easier to hire someone to come in and take over more of your current responsibilities. But are you still making money after hiring that person? Who knows. A good consultant who has experience in this kind of thing would be well worth the price.

Landscraper1
02-27-2012, 09:20 AM
Any one can appear healthy and wind up taking a dirt nap the next day.

So you saying your sick does not mean anything unless your doc says how much time you can do the work, how long you have left to live.

Then if the doc sees you living long term but not able to do the work but you can still do the sales and management and let field managers to the stressful work.

The possibilities of what if's is endless so I will not even try to do any more.

Again you leave the original questions unanswered.

You make another announcement that does nothing to clear the situation but only adds a 10 cubic yard load of new questions to the original list of questions your first announcement created.

In the end you as any one else has to take in the hold story to come up with the best answer. Everything is not black and white and sometimes it needs to be.

I think I have answered enough of questions here for you to get an idea of my situation. You pretty much want a documentary of my life to answer a simple question. The original question is "what would you do?". Look at your life and THINK. If I had a company like that, would I sell or continue making a living with it? Simple question, one posted for curiosity, not because I am going to make a life change on your opinion.

Landscraper1
02-27-2012, 09:28 AM
Really only you can answer that question. Do you enjoy coming to work? Do you look forward to the challenges that your business brings every day? If you don't enjoy it, then it is simply what makes more money sense question and you should be going over those numbers with your accountant. However, I look down the road and think, 'Now what?'. What will you fill the space with?

Great comments!!! That's exactly the thought process I am going through.

Landscraper1
02-27-2012, 09:49 AM
Before going any further, you should check out what the broker has been up to. Be very wary of anybody that is asking to come in and look at the books. They should have no problem disclosing the deals they have been working on if they are a legit broker. This economy has forced a lot of people to get into things they are not qualified to do in order to try to make ends meet. It doesn't make them bad people - folks are just desperate.

The answer to "should I sell" is obviously one that goes beyond numbers. But if you just look at the scenario - best case - you have one million in cash. Is there something else you can do with it that you have experience in? Would you know how to handle rental property? Putting that money into a CD to earn 5% is not going to happen now or anytime soon so the theoretical $50,000/year that asset might generate is a little easier said than done.

The best answer is probably to look into hiring a consultant to come in and look at your business and see their independent opinion and weigh it against your health. Maybe it would be easier to hire someone to come in and take over more of your current responsibilities. But are you still making money after hiring that person? Who knows. A good consultant who has experience in this kind of thing would be well worth the price.

I agree with you on the CD. Last thing I would do is invest in Cd's or stocks. I actually don't keep much in any bank or other accounts. I have always invested in real estate or reinvested into the business.

As for hiring someone to take on more responsibilities, I have a problem with. I had a manager I trusted, steal thousands from me and a partner in the LC business that kept us in the red for many years. It's now that I have been on my own for the past 7 yrs that I have built a profitable business. So, other than my wife, who runs the office full time, I have trust issues.

I do like your idea of a consultant. I may look into that. Thanks.

wbw
02-27-2012, 10:28 AM
My question would be "Is the buyer alreadyin your market?"

If not what effect will they have on your future business as a competitor?

Will they lower your margins due to increased competition?

AintNoFun
02-27-2012, 10:48 AM
i would sell in a minute and not look back..

what do you think the future of this industry is? only going to get harder and harder to turn a profit...

snomaha
02-27-2012, 10:51 AM
Lately, I have been contacted by a sales broker(about 3 times in the last month), to go over the possibility of selling my business. He is looking into it for a large multi-million dollar LC that is interrested in buying my company. :)

This got me thinking, should I even consider an offer? I know I can get about $1mil for it but, what then. I am in good financial condition, the company is doing great, and I am only 45. I have always thought of selling when I retire in the future. Now is too soon, but who's to say I would have someone to buy later.:confused:

What would you do?

Still trying to get my head around 1 million + selling price. Your grossing 1.4m and for arguments sake netting 10%?? or 140k. If the big LCO who is buying you out is using approx 90k in after tax profit to pay off the debt it would take him over 10 years...Maybe you have a crazy amounts of assets? Typically a big LCO doesnt want the hard assets but just the book of buiness. sign me up for selling if you can get that kind of money!

A-Land
02-27-2012, 04:19 PM
I agree with you on the CD. Last thing I would do is invest in Cd's or stocks. I actually don't keep much in any bank or other accounts. I have always invested in real estate or reinvested into the business.

As for hiring someone to take on more responsibilities, I have a problem with. I had a manager I trusted, steal thousands from me and a partner in the LC business that kept us in the red for many years. It's now that I have been on my own for the past 7 yrs that I have built a profitable business. So, other than my wife, who runs the office full time, I have trust issues.

I do like your idea of a consultant. I may look into that. Thanks.

My sense is that both you and your partner probably learned a lot from that experience and wouldn't let yourselves get into a situation like that again.

I can't stress enough how important it is for you to hire a small business consultant who has experience with legacy issues and selling. You're hardly the first person to have built a company over many years and want to minimize their involvement or sell out to retire and move on. The right person may cost $5,000-$10,000, so be ready for that. But their understanding of the issues you're facing will make that money well spent and will let you sleep at night knowing you're doing the right thing for you.
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