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How much to pay for buying out other companies?

Discussion in 'Lawn Mowing' started by SummitLawns, Apr 29, 2012.

  1. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,715

    If each account was $30 and the business grossed 63k. (not great with math so correct me if I'm wrong) he would have to mow each account around 161 time a season, I know my season is less than 1/4 of that. The Op needs to look into the books, but lets be honest as a solo guy how much would you try to write off? Net is kind of useless for a solo operation because people are looking for purchases to add as write offs. Maybe he had a good year and "needed" to buy a UTV to help with tax burden? Just look at what he has, how he does it, and how you can improve it to make it more profitable.
     
  2. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    Still misleading because out of 3 million did your wife as the business owner make 50,000 or 500,000 salary?

    See with the info you have provided one can not place an accurate value of the business that your wife owns.
     
  3. ClassicLawnCareInc

    ClassicLawnCareInc LawnSite Senior Member
    Posts: 736

    On the 3million dollar company he was talking about, the fact that they only showed a 18k profit is good on their part. Who wants to show a huge profit? If you show a larger profit you have to pay more taxes. That 18k profit is probably more than they wanted to show.
     
  4. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    True but it does not change that his wife's business can not be valued based on the info he provided. So his numbers are meaningless.
     
  5. MowingMowingMowing

    MowingMowingMowing LawnSite Senior Member
    from Midwest
    Posts: 526

    I actually just sold my business this year and have been transitioning the buyer as I prepare to graduate from college.

    If anyone wants actual specifics feel free to PM me. FWIW, I sold for a multiple of gross revenue + inventory + intangibles (primarily the website, MKT pieces, etc.).
    Posted via Mobile Device
     
  6. MowingMowingMowing

    MowingMowingMowing LawnSite Senior Member
    from Midwest
    Posts: 526

    A multiple of gross monthly revenue*
    Posted via Mobile Device
    Posted via Mobile Device
     
  7. dahammer

    dahammer LawnSite Member
    Posts: 227


    For the last time, my numbers aren't meaningless. My wife does NOT own the business, she manages it. The 18k is what was left after everything else was paid. The OWNER took that home with her and that's what she made off of it. My wife made more off of the business than did the owner last year, a lot more. But the owner is disconnected, comes in and looks at the books from time to time, but beyond that she is not involved in the operation of the business. So the owner made 18k off the business last year without lifting a finger. She pays my wife well to manage the business for her and has other businesses that take up her time.

    At the end of the day, all I'm saying is that you need to look at the books and determine what the TRUE NET income for a business is before purchasing it. That is the only way you can determine what you could reasonably plan to make from it, based on your business model. Perhaps your business model doesn't involve paying someone to run it for it you, so you'd lump their pay into the net profit and might be willing to pay a little more than someone else that doesn't plan to run it themselves. But you still need to determine what that is.
     
  8. Keev12

    Keev12 LawnSite Member
    Posts: 1

    Customer databases are an asset.... as they say online Its all in your list!

    Hell I bought several online businesses just FOR their customer databases.... screw the rest.


     

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