Originally Posted by 32vld
A business usually should earn enough profit to equal what was paid for the business in 2 to 3 years.
The point is that you don't want to spend 20 years to earn back what you spent to buy a business. You want to spend the last 18 of those years making enough money to be able to retire.
Assets are worth what someone is only willing to pay for them. A book may say your truck, mowers, etc are worth $20,000. Many people looking to start doing landscaping usually have some of the needed equipment. Or already have a LCO business and do not need half of what you have. They just want your customers. At best they may only be willing to pay $10,000 for the equipment.
Then are your accounts tied to long term contracts for at least 3 years left on them and without 30 day termination clauses. Because if theses customers leave then the buyer has bought nothing of value.
Not to sound condescending but I don't do work that way in my neck of the woods. I only contract on very rare occasion. Never had to because a handshake, smile and hard work keeps most of my customers returning year after year. And new jobs come in some too. That is why I wanted to address this to see what I'm worth here.
Thanks on the equipment answer, it helps.