Can this be correct

Discussion in 'Business Operations' started by jacobslarr, Jun 1, 2007.

  1. jacobslarr

    jacobslarr LawnSite Member
    Posts: 4

    I am looking to purchase a lawn irrigation business from a local guy who is retiring. He says they did 3.5 million, and he cleared about 10%.

    This seems really low, and I was wandering if he made some kind of mistake, or his prices are way low?

    Any advise appreciated.

    LArry
     
  2. T.E.

    T.E. LawnSite Senior Member
    Posts: 799

    He cleared 10% seems to me a little vague. Did the business clear 10% after his take or is that the total amount cleared? To have a gross revenue of 3.5 mil most of the time the profit margin is not going to be as large as smaller companys. This may be why the profit margin is only 10%.
    I know when speaking with my cpa, I asked what was the avg. profit margin. I was told on service bus. 10 to 15 % JMO Later, Tony
     
  3. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    dog dam do i got to explain everything. first ask to see the books. he prolly exagerated the gross a bit. plus it includes parts/materials in it too. take those out and you got 1.5 mil for actual adjusted gross revenue off labor. of that he cleared $350k. how much he want?
     

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