Help Bidding Worth of Other Lawn Business

Discussion in 'General Industry Discussions' started by authoritylawn1990, May 5, 2011.

  1. authoritylawn1990

    authoritylawn1990 LawnSite Member
    Posts: 1

    I am currently working hourly to help a friend's lawn business who has other obligations. He wants me to buy the business from him(apprx. 20 weekly accounts at average of $30 per cut) as well as his equipment(2010 48" Toro Grandstand, echo blower/trimmer). I have heard many ways people price other lawn businesses when placing bids and want to know what has worked best for some of you. thanks
     
  2. mdlwn1

    mdlwn1 LawnSite Silver Member
    Posts: 2,443

    That business is worth the equipment and a six pack of beer......not kidding.
     
  3. knox gsl

    knox gsl LawnSite Platinum Member
    Posts: 4,736

    I wouldn't give more than the value of equipment and a months worth of gross income.
     
  4. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    In a case like that its worth 1 to 2 months gross plus the equipment.

    A much larger operation would be worth more.
     
  5. Will P.C.

    Will P.C. LawnSite Senior Member
    Posts: 966

    He isn't kidding.

    The clients could all decide to dump you and find someone else once they find out the original owner sold. They may not like you or your work. Obviously, you will lose a few to moving, financial reasons, etc. What we are trying to say is that those 20 clients are not set in stone.

    Do not let the guy tell you that you are guaranteed 20 clients.
     
  6. Grott

    Grott LawnSite Member
    from MI
    Posts: 55

    I'd make an offer of the value of the equipment plus a percentage of the sales to his client list.

    If he has the time to write a letter or personally make introductions it would go a long way in holding onto customers.

    I think the 1-2 months gross would work in a year round market but would be high in my area. You can also sweeten the pot by buying the equipment with business income based on a payment plan kind of like a lease to own. If the business works you buy the equipment at x per month with a total of xx. Or you return the equipment and any payments to date are "rental" fees.

    You can do all manner of things...but if you want the friendship to survive get it all in writing and be clear. Make it a win - win, he gets to move on and recoups some of his investment and you get a good start on a new business.

    Garett
     
  7. mdlwn1

    mdlwn1 LawnSite Silver Member
    Posts: 2,443

    The reason 20 small accounts are worthless is because you could go handing out flyers and have 20 customers by the end of the month. I highly doubt it, but if said 20 customers were 10k and up in revenue per year...there would be something to talk about......possibly.
     
  8. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 12,963

    And that is way too much money he invested in the mower.
     
  9. hackitdown

    hackitdown LawnSite Silver Member
    Posts: 2,487

    Buy the mower at a fair price, and have him throw in the accounts. Otherwise, I'd pay $100 per account for those accounts who agreed to stay on.
     
  10. Darryl G

    Darryl G LawnSite Fanatic
    Posts: 8,033

    I've looked at buying accounts before and after doing so it was readily apparent why the guys were getting out of the business....they were grossly under priced...all of them. Accounts are worth less than nothing if they're under priced!
     

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