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  #51  
Old 01-27-2014, 07:26 PM
205mx 205mx is offline
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Originally Posted by I_am_a_beginner View Post
Read all posts or dont reply, answered this question already...
Asked again as you obviously don't understand.
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  #52  
Old 01-27-2014, 07:45 PM
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I_am_a_beginner I_am_a_beginner is offline
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Most answer are not correct, useless or obviously stupid
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  #53  
Old 01-27-2014, 07:45 PM
TMlawncare TMlawncare is offline
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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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I agree his numbers seem way off. 62% profit margin is not realistic.
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  #54  
Old 01-27-2014, 07:47 PM
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I_am_a_beginner I_am_a_beginner is offline
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I will look further i to the numbers
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  #55  
Old 01-27-2014, 07:57 PM
205mx 205mx is offline
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The problem Is both you and the other guy claiming 50% + profits. WTF!!!! I may pizz off my fair share of people on here. But many wil agree I know what I'm talking about. So do guys like 32 and whiffy. The only thing with us is some guys like solo and some crew.

But where we all come together is general good busii was sense. And you ask a question, receive answers from guys with experience, and you call them stupid.


accept that your numbers are unreal. You are obviously guessing (at your own numbers)

My suggestion is hire a damn book keeper.
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  #56  
Old 01-27-2014, 08:23 PM
TMlawncare TMlawncare is offline
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Originally Posted by I_am_a_beginner View Post
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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You said that you also run a profit margin of over 60%. What I learned when I was just starting out was there was a lot of expenses I did not keep track of. I lost some receipts. There was a lot of stuff I did not know I could deduct. My profit margin looked great. My tax bill was horrible and my bank account was nearly empty. Over the years I paid a lot of attention to my tax man and not my profit margin truly reflects my earnings.

Btw, he said he paid 7k in gas on 120+k of revenue. Most on here if you look it up average between 10-12% of gross. That would be closer to $12k on fuel. What about liability insurance ($1200), workmans comp ($3000), commercial vehicle insurance ($1000/vehicle min), unemployment insurance ($2000), shop/equipment insurance ($500), payroll taxes ($2000), personal property tax on equipment ($xxx?). What about tax fees, licensing, supplies, dot bs, etc. Did he purchase any new equipment, trucks or trailers? I could go on and on. Crap I spent $600 this past year alone on postage. Like I mentioned, there is a lot that can be overlooked.

If he really did 60+%, I want those 30 accounts.
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  #57  
Old 01-27-2014, 08:53 PM
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Patriot Services Patriot Services is online now
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If you don't like the answers here then hire a professional broker. Let them do a real world forensic analysis of the business. That cuts through all the possible bs. If the owner refuses then he is hiding something.
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  #58  
Old 01-27-2014, 09:06 PM
grassmasterswilson grassmasterswilson is offline
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Before you even discuss numbers I would find out if his contracts are binding should he sell his company to you. Will the current customers be willing to honor the contract for you? Will they finish out the year and re bid them?

I've tried to buy multiple companies but sellers want their money upfront and I'm not willing to take all the risk

If you want to make a deal pay him fair market value on equipment. Then maybe 30% of one year gross? I always tried to structure a deal based on who was willing to let us service their property. I would then pay him quarterly payments of a certain percentage of the gross brought in from his clients until our negotiated price was paid.
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  #59  
Old 01-29-2014, 01:23 PM
soulman soulman is offline
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pay him 3 months of base gross sales (do not include extras such as pinestraw, enhancements, landscaping projects, etc. in the $125K)...if his 125K is actually is only base maintenance sales, that = $31,200.00 sales price approx...thats the MOST I'd pay based on others comments....equipment = negoiate separately at a reduced amt = .25 on the dollar....definitely have a ratio for reducing sales price if customer retention falters
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