How much this company worth?

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

  1. 205mx

    205mx LawnSite Silver Member
    Posts: 2,346

    Asked again as you obviously don't understand.
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  2. I_am_a_beginner

    I_am_a_beginner LawnSite Member
    Posts: 194

    Most answer are not correct, useless or obviously stupid
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  3. TMlawncare

    TMlawncare LawnSite Bronze Member
    Posts: 1,197

    I agree his numbers seem way off. 62% profit margin is not realistic.
     
  4. I_am_a_beginner

    I_am_a_beginner LawnSite Member
    Posts: 194

    I will look further i to the numbers
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  5. 205mx

    205mx LawnSite Silver Member
    Posts: 2,346

    The problem Is both you and the other guy claiming 50% + profits. WTF!!!! I may pizz off my fair share of people on here. But many wil agree I know what I'm talking about. So do guys like 32 and whiffy. The only thing with us is some guys like solo and some crew.

    But where we all come together is general good busii was sense. And you ask a question, receive answers from guys with experience, and you call them stupid.


    accept that your numbers are unreal. You are obviously guessing (at your own numbers)

    My suggestion is hire a damn book keeper.
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  6. TMlawncare

    TMlawncare LawnSite Bronze Member
    Posts: 1,197

    You said that you also run a profit margin of over 60%. What I learned when I was just starting out was there was a lot of expenses I did not keep track of. I lost some receipts. There was a lot of stuff I did not know I could deduct. My profit margin looked great. My tax bill was horrible and my bank account was nearly empty. Over the years I paid a lot of attention to my tax man and not my profit margin truly reflects my earnings.

    Btw, he said he paid 7k in gas on 120+k of revenue. Most on here if you look it up average between 10-12% of gross. That would be closer to $12k on fuel. What about liability insurance ($1200), workmans comp ($3000), commercial vehicle insurance ($1000/vehicle min), unemployment insurance ($2000), shop/equipment insurance ($500), payroll taxes ($2000), personal property tax on equipment ($xxx?). What about tax fees, licensing, supplies, dot bs, etc. Did he purchase any new equipment, trucks or trailers? I could go on and on. Crap I spent $600 this past year alone on postage. Like I mentioned, there is a lot that can be overlooked.

    If he really did 60+%, I want those 30 accounts.
     
  7. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,670

    If you don't like the answers here then hire a professional broker. Let them do a real world forensic analysis of the business. That cuts through all the possible bs. If the owner refuses then he is hiding something.
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  8. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Posts: 4,535

    Before you even discuss numbers I would find out if his contracts are binding should he sell his company to you. Will the current customers be willing to honor the contract for you? Will they finish out the year and re bid them?

    I've tried to buy multiple companies but sellers want their money upfront and I'm not willing to take all the risk

    If you want to make a deal pay him fair market value on equipment. Then maybe 30% of one year gross? I always tried to structure a deal based on who was willing to let us service their property. I would then pay him quarterly payments of a certain percentage of the gross brought in from his clients until our negotiated price was paid.
     
  9. soulman

    soulman LawnSite Member
    Posts: 26

    pay him 3 months of base gross sales (do not include extras such as pinestraw, enhancements, landscaping projects, etc. in the $125K)...if his 125K is actually is only base maintenance sales, that = $31,200.00 sales price approx...thats the MOST I'd pay based on others comments....equipment = negoiate separately at a reduced amt = .25 on the dollar....definitely have a ratio for reducing sales price if customer retention falters
     

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