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Old 09-14-2011, 03:20 AM
greenstatelc greenstatelc is offline
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Join Date: May 2011
Location: spokane washington
Posts: 4
How much is my lawn care business worth?

I am considering selling my lawn care business because I am burnt out. I started the business 14 years ago when I was 12. I currently have 93 weekly accounts I live in spokane washington so we get about 26 mows on average a year. All the lawns are in a three mile radius so the lawns that are the farthest away from each other it takes no longer than fifteen minutes.

INCOME

My average lawn price which includes sales tax is $25.44. So every week the business gross is $2742. I estimate the business will net $45000 after taxes and everything. It takes two guys 25 hrs to mow the lawns each week. that doesnt include dump trips or maintenance time or paper work time.

I also have 30 snow throwing accounts. I bill out $700 every time it snows 2" or more and $850 if it snows 6" or more. last year I made around $5500. It takes two guys 6 hrs to complete the route.

I also offer pruining, aerating, power raking, and cleanup for our clients. This year that made $8000.

So this year $63000.

EQUIPMENT

36" Toro Proline HyDro Kawa (5years old but runs like a beast)
2 26" exmarks ( both 3 years old) good shape
1 26" exmark part mower.

2 shidawa commercial trimmers one is 3 months old the other a year old
1 echo commercial stick edger 2 yrs old

1shidawa back pack blower 4 yrs old
1 shidawa hand held comm. three months old
1 Echo hand held blower 2 yrs old

1 blue bird aerator ten yrs old runs good
1 blue bird pwr raker 5 yrs old

1 aerions 28" snow thrower 1 yr old
1 single stage toro commercial thrower

Nice 7 ft X 10 ft trailer. fully ready to go trimmer rack and signs. and front storage.

93 Ford ranger with nice fully enclosed bed with signs. 4X4 dual cab. Runs good 210,000 miles. well maintained.

MARKETING

full service website
well recognisable logo
phone.com account so the number on the signs can be used



ANY advice or suggestions on how to value this setup would be appreciated. THanks for reading!
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  #2  
Old 09-14-2011, 07:37 AM
LwnmwrMan22 LwnmwrMan22 is offline
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Join Date: Mar 2004
Location: Minnesota
Posts: 4,377
Your equipment is worth about $10,000... truck, trailer, EVERYTHING, top price.

That would mean your business is probably worth about... $10,000.

You say you have revenue of $2700 / week, for 26 weeks. That's roughly $70,000 per year. At a 25% profit, you'd be netting around $17,500 but you say you will make $45,000 after all is said and done.

At best, you MIGHT get $20,000.
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Old 09-14-2011, 05:53 PM
greenstatelc greenstatelc is offline
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Join Date: May 2011
Location: spokane washington
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Quote:
Originally Posted by LwnmwrMan22 View Post
Your equipment is worth about $10,000... truck, trailer, EVERYTHING, top price.

That would mean your business is probably worth about... $10,000.

You say you have revenue of $2700 / week, for 26 weeks. That's roughly $70,000 per year. At a 25% profit, you'd be netting around $17,500 but you say you will make $45,000 after all is said and done.

At best, you MIGHT get $20,000.
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.
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Old 09-14-2011, 08:34 PM
williams lcm williams lcm is offline
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Location: orlando fl
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What will you be doing when the business sells? It will be hard to make that money again. I know in your next job you will not want to make less. Let us know. I like to see ideas on what else is out their that makes good money besides cutting grass.
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Old 09-14-2011, 10:33 PM
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supercuts supercuts is offline
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Join Date: Jan 2007
Location: CT shoreline
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Quote:
Originally Posted by greenstatelc View Post
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.
figure right off the top 33% goes to income tax....at least here in CT so your 60% is already nearly out the window. repairs, supplies, equipment replacement, insurance, etc. you don't mention employees either. payroll, Workman's comp..... do you really know your true operating cost? I know about where mine are but even I dont know 100%. the 25% figure he gave is a ballpark figure that most businesses try to achieve. mine is lower. most are. health insurance companies are only around 4% but still generate ridiculous amounts of money. its worth what you can get for it. contact your accountant if you pay taxes and have one, see what he thinks or if he can point you in the right direction
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  #6  
Old 09-15-2011, 09:12 PM
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PROCUT1 PROCUT1 is offline
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Location: TN
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Quote:
Originally Posted by supercuts View Post
figure right off the top 33% goes to income tax....at least here in CT so your 60% is already nearly out the window. repairs, supplies, equipment replacement, insurance, etc. you don't mention employees either. payroll, Workman's comp..... do you really know your true operating cost? I know about where mine are but even I dont know 100%. the 25% figure he gave is a ballpark figure that most businesses try to achieve. mine is lower. most are. health insurance companies are only around 4% but still generate ridiculous amounts of money. its worth what you can get for it. contact your accountant if you pay taxes and have one, see what he thinks or if he can point you in the right direction
Income tax does not come "off the top" and its not a factor in the sale.
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  #7  
Old 07-07-2012, 01:04 AM
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wbw wbw is offline
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Join Date: Oct 2004
Location: houston tx
Posts: 4,409
Quote:
Originally Posted by PROCUT1 View Post
Income tax does not come "off the top" and its not a factor in the sale.
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Thank you. 33% of gross...holy cow.
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  #8  
Old 07-08-2012, 10:33 AM
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snomaha snomaha is online now
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Join Date: Jan 2004
Location: midwest
Posts: 557
Quote:
Originally Posted by greenstatelc View Post
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.
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  #9  
Old 07-09-2012, 11:48 AM
caseysmowing caseysmowing is online now
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Location: Staunton VA
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You can't go work for GM for 40 years once you turn 18 and retire 2 Florida with a million in retirement saving anymore. Those times are long gone.

Sad but very true.
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  #10  
Old 12-15-2014, 05:08 PM
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Cedar Lawn Care Cedar Lawn Care is offline
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Join Date: Jan 2013
Location: Utah
Posts: 659
I have seen 3 different companies that were selling their companies for very close to their gross for the year including their equipment.
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