Help selling my business

Discussion in 'Business Operations' started by Outdoor Images, Oct 8, 2013.

  1. Outdoor Images

    Outdoor Images LawnSite Member
    Posts: 12

    I also have an opportunity for another 5 commercial accounts next spring but I dont even know if I want to increase my payroll and expenses any more. I already am up there in these categories. If I keep the business I will be forced to pickup more commercial to create more funds but taxes suck too. I would rather sell and walk away. Im 29 years old. I can do many other things right now besides stressing me out every day.
     
  2. Gmgbo

    Gmgbo LawnSite Senior Member
    Posts: 382

    In my personal experience....I have purchased accounts for 25% of their gross. When purchasing equipment the more I bought, the less I paid.

    I believe you will need to find a large company with the $$ to buy you out. In the past I have gone to the bank looking for money to buy companies. (I have my loans and line of credit with this bank) They didn't even want me to reply. I have had good luck with owner financing believe it or not.

    On average, when the clients found out about the change in ownership 1 in 10 canceled.

    $230,000 + 50,000 equipment x20% discount: $184,000
    $500,000 gross x25% :$125,000

    Sale Price: $309,000

    What do you net, people would want to know how long it would take to make their money back?
     
  3. Outdoor Images

    Outdoor Images LawnSite Member
    Posts: 12

    i purchase equipment every year and am always buying something for taxes so the last few years I only netted 40k a year in actual profit.
     
  4. Outdoor Images

    Outdoor Images LawnSite Member
    Posts: 12

    Everyone keeps telling me I should ask about 400k-500k. Not sure if thats right?
     
  5. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,536

    buying for tax breaks is a sign of poor management IMHDAO

    or if you want to get really technical, you can start you asking based on EBITDA since you dug yourself into a NET hole.
     
  6. Outdoor Images

    Outdoor Images LawnSite Member
    Posts: 12

    Great! thanks for the amazing technical help efficiency!
     
  7. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,536

    what else are you wanting? I can broker the deal for a fee if you want.
     
  8. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,536

  9. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,536

    or when the purchaser assesses their investment, they would look at something like this: http://en.wikipedia.org/wiki/Roic (helpful for you to consider when arriving at a valuation)
     
  10. dirtyoldman1

    dirtyoldman1 LawnSite Member
    Posts: 8

    I would think it would be hard to find someone with the money and/or credit. What about splitting up the business... Selling commercial accounts separate from residential separate from equipment?
     

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