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Old 08-29-2014, 09:08 PM
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snomaha snomaha is offline
LawnSite Senior Member
 
Join Date: Jan 2004
Location: midwest
Posts: 526
Quote:
Originally Posted by ajreeves View Post
I really appreciate your insight. And I do understand your point. For some reason I am still tempted but leaning towards passing on the offer. Thanks to all who took the time to respond.
However, my original question remains unanswered, how do you value a lawn care biz? Is there a certain formula or method to determining that figure?
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How do you value any service business? My experience - some multiple X normalized earnings. Higher multiple means you have people and processes in place not solely dependent on you - lower means you own a job, not a business.

Hard assets will always be valued at auction prices. Goodwill, dependent on the above, will go at 3 to 6 times multiple.

In my region, a 5m business doing 10% net, would bring 3-4 normalized net profit + hard assets at auction price.
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