Business Valuation Estimate

Discussion in 'Lawn Mowing' started by mikeeee, Jan 18, 2005.

  1. mikeeee

    mikeeee LawnSite Member
    Posts: 22

    I'm thinking of buying a friends small lawn bus. He cuts only 1 day a week for about 8 or 9 months out of the year. Gross about 16000. Equipment 99 Dixie chopper 25hp about 650hrs works perfect, Encore all hyd. 48in walk behind
    15 hp works perfect about 4 yrs old both have 3 extra sets of blades 2 weedeaters about 4 yrs old eachorks great a couple of extra heads
    1 red max back pack blower about 6yrs old works perfect 1 12ft dual axle trailer w/gate great cond. What is your estimated value of this business?
    He is wanting to sell and I am interested but just wanted a couple of opinions.
    He is asking 12k. Is this a fair market price?

    Thanks in Advance
     
  2. plateau lawn care

    plateau lawn care LawnSite Member
    from georgia
    Posts: 195

    If he has contracts on the lawns for 2005 you have just made 4 grand for cutting grass plus your getting paid for cutting it. Plus you got all his equipment
     
  3. packerbacker

    packerbacker LawnSite Bronze Member
    Posts: 1,433

    If i was you call around and get a price on all the equipment NEW and the go from there.

    If he is selling the equipment for 12,000 then HE'S getting a hell of a deal.

    Just from what you said I added up about $5000 worth of equipment

    Dixie Chopper (650 hours) $2500
    48 Encore Hydro $1200
    2 Trimmers (4 years old) $100
    BP Blower (6 years old) $100
    12 FT Trailer $800


    If you bought all those brand new you would probably pay somewhere around 18,000 ( just an estimate) and you would have warranties on all of it. Not equipment that is 4-6 years old. I buy new equipment (trimmers and blowers) every other season and new mowers every 2 years.
     
  4. plateau lawn care

    plateau lawn care LawnSite Member
    from georgia
    Posts: 195

    If all you get is the equipment i wouldnt buy it
     
  5. mikeeee

    mikeeee LawnSite Member
    Posts: 22

    Includes all accounts
     
  6. packerbacker

    packerbacker LawnSite Bronze Member
    Posts: 1,433

    I would offer him 5000 for the equipment and then tell him you will give him 1 months worth of profit for the customers AFTER you know they have signed a contract for 2005 and 2006
     
  7. plateau lawn care

    plateau lawn care LawnSite Member
    from georgia
    Posts: 195

    Do you currently have a service of your own. Do you have anymore accounts lined up. If not by the time you get some license and insurane and any more equipment you need you will not profit anything this year.
     
  8. mikeeee

    mikeeee LawnSite Member
    Posts: 22

    I have a few accounts lined up and will be happy to break even this year! Next year will be much more fun!
     
  9. plateau lawn care

    plateau lawn care LawnSite Member
    from georgia
    Posts: 195

    Go for it and if you break even thats good you have't lost nothing and you can decide by that if you like this bussiness
     
  10. jasonnau

    jasonnau LawnSite Senior Member
    Posts: 454

    Accounts aren't that hard to find. 100 dollars at kinkos, and some time putting out flyers can easily fill you up with a days work. I wouldn't do it. Do you really want his equipment, or would you have things your way if you could. I agree, the equipment isn't worth the money, and you can get your own accounts. Hell, he might just end up selling the equipment. You could follow up on his left behind customers.
     

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