Business for Sale, How Much $?

Discussion in 'Pesticide & Herbicide Application' started by Enviro Green, Jul 27, 2004.

  1. Enviro Green

    Enviro Green LawnSite Senior Member
    Posts: 324

    After reading Tennissippi's thread about getting out, the thought occurred to me about pricing a business for sale.

    There are two small guys here who are going out and one is giving me his accounts and the other I don't know yet.

    What kind of numbers have some of your guys seen for the sale of turf management businesses? I am thinking about only fertilization and weed control, aeration, seeding, and that type of work, no lawn mowing or landscaping, and without signed contracts, but a prov en track record 1-2 years+ of working with a client and good name recognition.

    I also know the sale price has to be slightly based on the market, but are the main numbers on the number of clients, the square footage, the gross/net, or what? What about equipment and trucks?

    I did a couple of searches and found a little bit, but not much info. I would love to hear some input on this topic.

    Thanks!

    EG
     
  2. kickin sum grass

    kickin sum grass LawnSite Senior Member
    Posts: 628

    I was recently offered 2 month worth of cutting for each account. That was the accounts only. I would bet it would be next to nothing for fert customers. Maybe the price of equipment and a little spare to boot. This is just talking buying a small company. Now if it was 1000 customers that would be different.
     
  3. James Cormier

    James Cormier LawnSite Bronze Member
    from Ma
    Posts: 1,218

    Fert companies usually get about 20x's what mowing companies get.

    I sold my mowing business and was lucky to get 20cents on the dollar, ive been offered $1.10 on the dollar for my fert business.
     
  4. Enviro Green

    Enviro Green LawnSite Senior Member
    Posts: 324

    James,

    You mean $1.10 on the dollar for gross or net or where?

    The last fert company I talked to had 4,000,000 sq ft being treated, grossed 140,000 and netted 40,000 after expenses and labor. Sold for 125,000. Or so the story went....

    Sound close?

    EG
     
  5. James Cormier

    James Cormier LawnSite Bronze Member
    from Ma
    Posts: 1,218

    EG, those numbers are based on gross, thats really the only number thats constent, everyones net will be different on the same gross

    So a company grossing 140k should be able to sell for 140x1.10=$154,000
     
  6. turf hokie

    turf hokie LawnSite Silver Member
    Posts: 2,744

    I'm actually in the midst of purchasing a company that only does fert and chems. 225 customers for 1 years gross. all equipment except the vehicle included. seems to be the going rate.
     
  7. specialtylc

    specialtylc LawnSite Bronze Member
    Posts: 1,656

    A well established company, with good accounts should be worth 1.5 to 3 times gross revenues. Check with a local broker to help you find the real value of the company you are looking at.
     
  8. hoyboy

    hoyboy LawnSite Senior Member
    from Chicago
    Posts: 346

    specialtylc --

    I'd like to see any company that went for 3X gross, or anywhere close to it. Usually 1-3 X discretionary cash flow is used. I've never seen a co. go 3x gross.
     
  9. Enviro Green

    Enviro Green LawnSite Senior Member
    Posts: 324

    James,

    That's close to the numbers I have been given from a consultant, anywhere from 75-110% of gross, based on client numbers, and the equipemnt isn't so importnat as the client list itself.

    Thanks for the input, that's what I was looking for, and thanks to the other folks too!

    EG
     

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