Appraising a bussiness

Discussion in 'Lawn Mowing' started by TJ1, May 15, 2002.

  1. TJ1

    TJ1 LawnSite Member
    Posts: 5

    What would a lawn care business be worth that has two complete set ups wich include two 95 model dodge diesel 1 tons, two 61 inch grass hoppers 2 years old, walk behinds, push mowers, back pack blowers, ect .

    This business has 130 accounts w/ three fulltime employees and a couple partime, the average monthly gross income is $15000-$16000 dollars. With a net in pocket income of $6000- $7000 dollars.

    Thanks for any help
     
  2. Chop busting time!!!!


    So you have a 40% profit margin?

    First off without seeing the accounts it seems your prices are to low.

    That would be $1,875 a week per a mowing crew.

    AVG. price per a cut would be $28.85.

    Anyways 3 mowings and 50% of what "you" think your equipment is worth.

    You can't sell employees' they abolished that in the 1800's.

    Trucks around $8-9000

    Mowers and others ??????????????

    Maybe this will give you something to work on, and in your search you will finds some other info to go on.
     
  3. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    If your buying a "going concern" or "turn key" that's great .... if your buying "accounts" ..... keep your ears n eyes OPEN ....ask questions ....see the "numbers or books"

    The general "rule of thumb" in FL .....for year round 12 month 42 cuts per year accounts ....is "2 months" (if the account is $ 80 per month it's "worth" $160) .....the longer the been doing the accounts the better

    Commercial are iffy .... MUST be under Contract and contact with the property manager is a must .... open communication with ANY Client is a MUST

    This is Broad n GENERAL NOT in stone ..... I would not pay for ANY accounts with Under 1 Year Service .... I would "work" the accounts at least 2 weeks ....meet the people .... see the workers perform .... learn the accounts (make sure they are worth YOUR TIME) etc.

    A letter from seller n you should be sent .... your own personal confidence should be strong …non compete clause is a MUST …..check for ANY personal Liabilities from the seller against them or company

    The ‘Numbers” seem too good to me … I'd love to be able to have 5 guys and still put in my pocket $6-7 k on $15-16 k gross …they must be under table or they are paying something funny or have zero overhead cost ….2 guys full time should be able to cut $ 10 k of monthly accounts ….net profit of 40% is a pipe dream

    More than 3 employees MUST have WC in FL ….will average at least $ 250 monthly …..fuel must be around $1500-1750 monthly …payroll full times if at 40 hours n say $ 8- 10 per hour is $4-5 k monthly payroll n you haven’t even made your pay roll taxes yet ..vehicle, trailers n equip repairs n maintenance ….storage area ….phone ….advo ….uniforms …all the things with direct, indirect n overhead cost ...gonna eat up that "net in pocket"
     
  4. TJ1

    TJ1 LawnSite Member
    Posts: 5

    The business that is for sale has been going srong for 15 years. Due to the owner getting a divorce it is for sale. He says he wants to stay strictly into landscaping a will sign a no compete clause. Ihave not got a price from him yet. I'm just trying to get an idea. His employees make 8.50per hour with one employee making salary of 430 per week. This is about the going hourly rate in this area. This company has the best name in the business around this area. But I do plan on looking at the books. I can bring about 2000 grand a month in accounts from my business. Unless he wants a fortune I think it could be a good deal.
    Thanks for the replies I will let you know the asking price when I find out, to see what you guys think.
     
  5. TJ1

    TJ1 LawnSite Member
    Posts: 5

    The net profit I gave was a estimate I came up with am I way off?
     
  6. The original owner going to do landscaping only. NO WAY..

    NON Compete for the enitire biz, not just part of it.


    Look at the books closely, $15k a month should net you about $3k on the high end.

    Payrole seems low, they may wonder elsewhere once sale has comenced.

    I would not pay more than 3 cutting total!!!!

    You will loose many due to the sale, so I would pay after you have received funds from those customers. Don't pay for them out of your own pocket. Let the customers pay for them selves.

    Equipment, you are on your own on this one.
     

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