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How do I determine the value of my lawncare business?

Discussion in 'Business Operations' started by ajreeves, Aug 18, 2014.

  1. ajreeves

    ajreeves LawnSite Member
    Posts: 31

    Hey guys
    I could use a little help with this.... Here's the situation.
    A friend and long time subcontractor has made me an offer to buy into my company.

    My numbers:
    In biz 7yrs
    Last yr Revenue 200k, net operating profit of 95k
    This year projected revenue 390k projected net operating profit- 187k.
    Equipment value - 180k
    Loans- 56k

    His numbers:
    In biz 4 yrs
    Last yr rev 100k, net operating 50k
    This yr proj rev 150k, net operating 75k
    Equipment value 120k
    Loans 63k

    Any advice on how I would determine what his buy in cost should be? We both offer similar services but he does not plow and I do.
    Posted via Mobile Device
     
  2. ajreeves

    ajreeves LawnSite Member
    Posts: 31

    We offer everything from mowing to hardscapes, no pesticides and no irrigation.
    Posted via Mobile Device
     
  3. whiffyspark

    whiffyspark LawnSite Fanatic
    Posts: 6,087

    Too small to have a partner.
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  4. ajreeves

    ajreeves LawnSite Member
    Posts: 31

    Care to elaborate?
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  5. Snyder's Lawn Inc

    Snyder's Lawn Inc LawnSite Platinum Member
    Posts: 4,541

    If you making those number why would you want a partner to deal with
     
  6. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,519

    heck, id buy in if your profit numbers were legit
     
  7. ajreeves

    ajreeves LawnSite Member
    Posts: 31

    To increase my time with family, the ability to go out of town and have someone who has a vested interest in keeping the business running smooth. But most of all I think that it raises the ceiling on how big my business can be. I was hoping to open other parts of the business like a fert/ pesticide division. Which I would need a few specialized courses.
    Posted via Mobile Device
     
  8. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 858

    Do you need capital, experience or locking in key people? If not, no reason to have a partner.

    Help me understand "net operating profit" - your numbers are 4 to 5 times industry average for very well run outfits. Ill guess - no fair market wage for you included?
     
  9. ajreeves

    ajreeves LawnSite Member
    Posts: 31

    That's right, that is before I collect a salary. Maybe I have the wrong definition of net operating profit-
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  10. Snyder's Lawn Inc

    Snyder's Lawn Inc LawnSite Platinum Member
    Posts: 4,541

    How many employees you have now

    Family time is nice
     

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