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Buying a lawn care business

Discussion in 'Lawn Mowing' started by redoakguy, Jun 28, 2008.

  1. redoakguy

    redoakguy LawnSite Member
    Posts: 1

    I wanted to know if anyone has bought or sold a lawncare business. I have an established lawncare business and have been working with a smaller guy doing jobs he can not handle. He is frustrated with the business and wants out of the ownership hassles but wants to come work for me and wants me to buy his business. I have no idea how to value lawn accounts. Many years ago I bought some smaller guys out. They had 20 - 30 accounts, no equipment changed hands and I paid one months cutting prices for those accounts. This was 10 plus years ago.

    This guy has $8k a month in lawn care. He gets occasional landscape work and has a few snow accounts that we do for him already. Can anyone tell me what a fair price range is for these accounts. My biggest dilema is I do not want to pay too much because getting new lawn accounts is really quite easy in our market if you are looking for them. We recently added 70 small property management accounts with one phone call and a days work bidding the jobs, this alone added 10k a month to our revenue with hardly any effort. I appreciate your input.
  2. Lawnbiz Jeff

    Lawnbiz Jeff LawnSite Member
    Posts: 26

    Five years ago I paid 20% of annual revenues for 41 customers of an LCO getting out of the biz. I paid half that up front and the balance halfway through the season once I was sure the customers were solid and weren't going to bolt on me. I am not sure if that was a good deal or not, but that base provided me a springboard into what became a very solid business.
  3. CLPS

    CLPS LawnSite Member
    from Midwest
    Posts: 28

    I was recently looking into doing the same and found that 10% of the net annual income is a pretty fair starting place when it comes to buying / selling accounts.

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