Originally Posted by greenstatelc
Where does 25% come from? We have income tax and sales tax and a number of overhead costs but the net profit far exceeds 25% with the limited drive time of this business ( it costs us $125 a week in gas and we are billing out $2700) It is more like 50-60% profit. I would even mow with the new owner for a month to get them off to the right track with the new owners.
You aren't making 50-60% profit if you aren't figuring your own fair market wage. My experience has been that green industry companies netting 15% are rock stars.
Excluding the equipment I would start with net income after taxes. I want to pay back the acquisition in 5 years or less with profit after taxes.