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  #11  
Old 01-12-2014, 09:24 PM
allaroundguys allaroundguys is offline
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Quote:
Originally Posted by I_am_a_beginner View Post
If I buy the company 50k, i cash-in 30k in the 1st year and a potential of 80k net for the next year to go.

Why would he sells me his company for 30k with 12k of equipments if you can make 80k of net income...?
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Why is he selling in the first place?
Personally if i where to buy a existing company id would want to be at 33% of the net & 60% of equipment value.
which would be about 34k. so i guess if you don't mind 50k that's you. personally id lose interest on anything above 40k.
also since he approached you id say you have the upper hand.
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Last edited by allaroundguys; 01-12-2014 at 09:30 PM.
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  #12  
Old 01-12-2014, 09:27 PM
TTS TTS is online now
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Unless things are very very different up north I'm thinking his numbers are off. Operating with employees at a 62% profit margin is hard to believe. I would pass on it on principle but definitely look into those numbers. If he's actually operating at that profit margin forget the accounts and equipment and find a way to buy the structure and operating systems of the business. Then you have something worth buying. 12k worth of equipment and 30 accounts is worth 12k and a cup of coffee
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  #13  
Old 01-12-2014, 09:31 PM
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I_am_a_beginner I_am_a_beginner is offline
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My business is running at a 66% profit margin and we have 7 employes, i presume his numbers are true but i will take a look at his numbers this week.
All his accounts are close and are commercial and business warehouses.

If his numbers are true and i keep te name, the contracts are signed for one year and i can net 78k, how much this comapny worth?
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  #14  
Old 01-12-2014, 09:33 PM
TTS TTS is online now
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I would look at your numbers first and get those right before you look at his. Its still worth 12k
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  #15  
Old 01-12-2014, 09:37 PM
allaroundguys allaroundguys is offline
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Quote:
Originally Posted by I_am_a_beginner View Post
My business is running at a 66% profit margin and we have 7 employes, i presume his numbers are true but i will take a look at his numbers this week.
All his accounts are close and are commercial and business warehouses.

If his numbers are true and i keep te name, the contracts are signed for one year and i can net 78k, how much this comapny worth?
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I learned along time ago when selling stuff. it's only worth what someone else would pay. so far seems 12k-40k (and a cup of coffee)
also you won't net 78k.
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  #16  
Old 01-12-2014, 09:56 PM
apexland.kenny apexland.kenny is offline
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The numbers don't really seem like they are adding up. If he is grossing $125k and his net is $78k, it seems his overhead and labor cost are only $47k. It doesn't seem realistic that he has multiple employees for that amount. Lets say he has three employees at $10 per hour. Working 40 hours per week and only 40 weeks out of the year that is $16,000 per employee just in wages. That is $48k by itself. Not to mention the employee taxes and workers comp insurance. The other thing is that if they have 30 contracts and are only grossing $125k. That is an average of less than $4200 per contract. I don't know how long your growing season is there but just mulching most properties can get close to that amount.

I would hate to make assumptions but it seems like they are trying to pass off some poorly bid contacts. Especially with them keeping the employees and the name. Like one of the previous posters mentioned you can start a nice company for that amount. Looks like he his trying to start over.

There may also be no guarantee that the contracts stay with you if you purchased them. Depending on how the contracts are written, there may be clauses that allow them to give a 30 day notice and move on to another contractor.

Invest your money in your company. Bulk up your website. That is your most valuable marketing tool. The first place people go to find companies today is the web. Find a great web developer in your area and let them take your business to the next level. It doesn't sound like the other guy will be your competitor for very long and those contracts will be up for grab and you won't have to spend anywhere near $78k. Buy more and better equipment. Network with the property management companies of these commercial properties and that way when comes time to re-bid these properties you are on there list. There are lots of better ways to increase your business.
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  #17  
Old 01-12-2014, 10:02 PM
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I_am_a_beginner I_am_a_beginner is offline
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Here in north, we have 25 weeks of mowing. He said he had 7k of gas and the rest as labor cost and equipment maintenance which seems realistic if i compare ratio to mine. I didnt't compare all the numbers yet and i cant confirme those but they seems true.

All the contracts are lawn cleaning and mowing. He had those clients for 6 years. He would tell his current client he is selling to us. We could keep his business name. He is selling because he has a construction business and he wants to put 100% of his time in that ($$$).
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  #18  
Old 01-12-2014, 10:09 PM
205mx 205mx is offline
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Don't ask for help then dick
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  #19  
Old 01-12-2014, 10:18 PM
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I_am_a_beginner I_am_a_beginner is offline
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?
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  #20  
Old 01-13-2014, 12:40 AM
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tonygreek tonygreek is offline
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Quote:
Originally Posted by I_am_a_beginner View Post
?
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You're asking for help with something that you already seem to have predetermined your answer for. You want the answer to be A.) however everyone here has told you it's B.)

It's like if you asked "The sky is blue, right?" and every answer said "Yes, it's blue.", but you keep responding saying it's red.
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