How much is my lawn care business worth?

Discussion in 'Business Operations' started by greenstatelc, Sep 14, 2011.

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  1. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    He has hit that tweener point. Can not afford to hire someone to do his work and stilll make a living. Yet that is likely what he needs to do. Time to try and take this to the next level. He needs to get his Score, work on a business plan and grow this thing so he can move out of the field.

    Maybe he just wants out
     
    Last edited: Jul 7, 2012
  2. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    Sadly, that happens to many people, it is called a mid-life crisis. It will happen no matter what.

    You have basically a strong foundation at a very young age. You have a lot of freedom you Will not get in the " I have a job" world.

    My $0.02 cents is to build a business plan and work it, You could spend 2 years making this thing grow and sell it for twice as much if need be.

    I seriously doubt you will regret growing a landscape company into a million dollar business or even bigger. This is your best chance to use your education and natural gifts.

    There are other services you can leverage this thing into as well. You just need to get out of your rut and stop thinking the grass on the other side of the fence is greener.
     
  3. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 859

    You aren't making 50-60% profit if you aren't figuring your own fair market wage. My experience has been that green industry companies netting 15% are rock stars.

    Excluding the equipment I would start with net income after taxes. I want to pay back the acquisition in 5 years or less with profit after taxes.
     
  4. caseysmowing

    caseysmowing LawnSite Bronze Member
    Posts: 1,849

    You can't go work for GM for 40 years once you turn 18 and retire 2 Florida with a million in retirement saving anymore. Those times are long gone.

    Sad but very true.
     
  5. Utah Lawn Care

    Utah Lawn Care LawnSite Bronze Member
    Posts: 1,304

    I have seen 3 different companies that were selling their companies for very close to their gross for the year including their equipment.
     
  6. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Posts: 7,525

    This thread is YEARS old.
     
  7. jsf343

    jsf343 LawnSite Bronze Member
    Posts: 1,767

    I agree with Procut on this, accounts have a lot of value ESPECIALLY if they are under contract. We have bought out a few other businesses and generally 3-6 months gross is a good price, although there are many things to consider with that as well (location, services, contract renewal date, etc).
     
  8. jonnyz37

    jonnyz37 LawnSite Senior Member
    Posts: 316

    What the accounts are worth is debatable.... However we have to start with one basic understanding.... While he is selling 93 accounts, the buyer won't be gaining all 93. Ask anyone who has bought a big customer list if they kept all or most accounts just 6 months after the purchase. Most would say to figure on keeping half... That's 50%, of the customers. And before the purchase, the buyer needs to talk face to face with every account and see if they plan on sticking around and what their expectations are from the new buyer. Buyer beware boys
    Posted via Mobile Device
     
  9. Utah Lawn Care

    Utah Lawn Care LawnSite Bronze Member
    Posts: 1,304

    You are right. The topic will never stop being relevant though. I enjoy the discussion.
     
  10. jonnyz37

    jonnyz37 LawnSite Senior Member
    Posts: 316

    I can't imagine paying one year gross.... You lose close to hall the accounts, pay your labor costs and other expenses and it takes like 3 years to break even.... Really? As far as being under contract, that ends when company is sold. So those contacts are little more than nothing at all. You just gotta hope the customers don't know that. One year gross.... Crazy, gambling, did I mention crazy yet?
    Posted via Mobile Device
     

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