What's a Company Worth?

[limaint]

As part of expanding, we are looking to acquire a smaller landscaping company. It seems as though most people looking to sell are shooting for the moon and I don't blame anyone for trying to get as much money as possible for their hard work, but what is realistic? Although one would do $200,000 in business or about a little more than $16,000 monthly they would also have about $9,000/ month in expenses. So $7,000/month in "profit".... $84,000/ yr profit on signed 4yr contracts (3yrs left). I cant see asking $250,000 when it would take 3yrs to make back the money (with no money in pocket) with substantial risk of not renewing the contracts.

[castlerockmo]

I am looking at buying a guy out in my area. Guys on here say that the accounts with no contracts are worth one month income, some say they are not worth a dime. As far as contracted aCcounts guys say the are worth 1-3 months of income. I would be interested to hear any one else`s take on this too.
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[bohiaa]

one of the funnyest things,,,

a guy in my area wanted to sell out, had everything priced pretty high,
none of us LCO'S would bite, " I kno most of them "
wound up he did move all of his customers were back in to the never never land of custoemrs seeking lco's and his equipment was sold at a G-sale he had.

so the long and short of it, we would up getting 5 of his customers, as so, many other lco's did.

so what's the worst thing that could happen if NOONE bought this co?

[hackitdown]

I bought a guys business this spring. He was asking a reasonable price, but was more than I wanted to spend. So I offered to buy his mower for a fair price, and he agreed. Then I offered him two weeks mowing revenue for each customer that signed up with me, which also worked out. I ended up with 11 new customers.

[FiveOJoe]

Originally Posted by hackitdown

I bought a guys business this spring. He was asking a reasonable price, but was more than I wanted to spend. So I offered to buy his mower for a fair price, and he agreed. Then I offered him two weeks mowing revenue for each customer that signed up with me, which also worked out. I ended up with 11 new customers.

I bought out a guy once, same deal. I negotiated all his equipment and gave him 2 weeks for his accounts that stayed with me for at least a month. Didn't lose any.

[mdlwn1]

Originally Posted by limaint

As part of expanding, we are looking to acquire a smaller landscaping company. It seems as though most people looking to sell are shooting for the moon and I don't blame anyone for trying to get as much money as possible for their hard work, but what is realistic? Although one would do $200,000 in business or about a little more than $16,000 monthly they would also have about $9,000/ month in expenses. So $7,000/month in "profit".... $84,000/ yr profit on signed 4yr contracts (3yrs left). I cant see asking $250,000 when it would take 3yrs to make back the money (with no money in pocket) with substantial risk of not renewing the contracts.

I feel the only way 200k in revenue would really be worth anything is if it were a group of banks or some other contracted large scale revenue stream. 200k in houses is generally too easy to come by. It wouldnt be the worst thing if you did an agreement where you pay as you go over the life of the contract...only problem is that both parties would have to solid business pro's....and it's safe to say that one of you isnt.