How much this company worth?

Discussion in 'Starting a Lawn Care Business' started by I_am_a_beginner, Jan 12, 2014.

  1. I_am_a_beginner

    I_am_a_beginner LawnSite Member
    Posts: 194

    Hi,

    I have a lawncare business and one of my competitor came to me offering me to buy his lawncare business.
    The company gross 125k and net 78k. He wants to sale all the contract for the price of his annual net income which is 78k. The total evaluation of his current equipment is 12k and that would be include in the purchase. No employee would follow in the transfer. We will be able to keep his company name but we arent buying the company structure and the corporation we only keep the name, the contracts and the equipment. If a contract is cancelles, the price will drop (ratio).

    How much would you pay for that?
    I am at 50k approx since we dont get the corporation and no employess are include in the transfer.
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  2. johnnybow

    johnnybow LawnSite Member
    Posts: 157

    Seems way to high.. try 30k...
     
  3. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Posts: 10,742

    $0.00. Take that $50k you want to spend. Use $10k for marketing and prolly add more than $78k in work. Put the other $40k in the bank.
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  4. I_am_a_beginner

    I_am_a_beginner LawnSite Member
    Posts: 194

    Even if every clients are under contract for the next year which is potentially gonna bring me back 80k?
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  5. I_am_a_beginner

    I_am_a_beginner LawnSite Member
    Posts: 194

    Don't forger ita not 78k of gross its 78k of net income.
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  6. CowboysLawnCareDelaware

    CowboysLawnCareDelaware LawnSite Senior Member
    from DE
    Posts: 555

    I'd say to start around around $25,000.
     
  7. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,446

    If I had 78k in cash lying around I would put it towards a Tim Hortons instead of buying a lawn company. Krazy is right, you can build a company for less than that.:usflag:
     
  8. I_am_a_beginner

    I_am_a_beginner LawnSite Member
    Posts: 194

    I forgotto say the business is 100% commercial customers. They have no residential. They have 30 accounts.
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  9. allaroundguys

    allaroundguys LawnSite Member
    from kcmo
    Posts: 56

    it wouldn't bring you in 80k though. if you bought at 50k you would only gain 30k plus appox 12k in equipment. (Which after another season less) id have to examine all the propertys to see how well they where bid. The only real benefit is if you keep most of the accounts for seasons after that.
    I'm not big on the idea of buying other company's. if he is keeping the corporation how do you get the name? If you have that kind of $ laying around why not just put 20k into advertising? (As said before) id be dumb founded if i spent 20k on advertising and didn't gross 125k. just my 2cents I'm still newish.
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  10. I_am_a_beginner

    I_am_a_beginner LawnSite Member
    Posts: 194

    If I buy the company 50k, i cash-in 30k in the 1st year and a potential of 80k net for the next year to go.

    Why would he sells me his company for 30k with 12k of equipments if you can make 80k of net income...?
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