How much would you pay for this company.

Discussion in 'Lawn Mowing' started by willretire@40, Dec 19, 2009.

  1. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Go ahead and offer him $300,000 or 1 cut or a months cuts or any of the other silly responses and get a laugh.

    A company like that will sell to another company of similar caliber. In other words a business man who knows how business operates.

    A company that size will involve professionals when its sold. Both sides will do an audit and a valuation.

    You are talking MULTIPLES of GROSS......Not fractions.
     
  2. PTP

    PTP LawnSite Bronze Member
    from Tulsa
    Posts: 1,370

    I agree. One cut plus equipment is way underpriced. If I could buy that business for that amount, I would be begging him to take my money.

    I don't know for sure, because I have never done a transaction that large, but I would guess that one years gross would be appropriate assuming that the business market, net profit, and other such things checked out okay.
     
  3. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    I agree with pro cuts. Asking that question here is like asking a bunch of 8th graders how to please a woman.

    I'm curious how long did it take to build this business. Not how long have you been in business, but once you settled on this model how long did it take to get to that size and have the basics down.
     
  4. AI Inc

    AI Inc LawnSite Fanatic
    Posts: 25,235

    Anyone who would pay a multiple of gross for a buss in this industry is a moron. The profits are just not there to justify it.
     
  5. TXNSLighting

    TXNSLighting LawnSite Fanatic
    from DFW, TX
    Posts: 6,462

    Yeh i forget you cant see sarcasm on comps...whoops! To be serious, that biz is worth at least multiple years gross i would think, and 90% of lawnsite people couldnt handle that purchase. Good fun. So is this real or a pipe dream?
     
  6. TXNSLighting

    TXNSLighting LawnSite Fanatic
    from DFW, TX
    Posts: 6,462

    Not true, not all businesses are hurt in this economy.
     
  7. AI Inc

    AI Inc LawnSite Fanatic
    Posts: 25,235

    Ive bought 2 irrigation companies in my time. Ive also tried selling some customers that were in areas that I realy didnt want to service anymore. One company the next town over from me was for sale, I talked to the guy , he wanted too much money ( $75,000 ) .
    One of my competitors bought it. I spoke with him after and he said " worse buss decision we ever made , paid way too much for it"

    And it dosnt matter if the buss is hurt in this economy or not, the profit margin is just not there.
     
  8. mdlwn1

    mdlwn1 LawnSite Silver Member
    Posts: 2,443

    Best analogy I've seen on this forum...hands down.
     
  9. Daily Lawn/Landscape

    Daily Lawn/Landscape LawnSite Senior Member
    Posts: 694

    A lot of variables that will go into an offer. The numbers that you give as far as production are possible in my book. If the co was debt free, has great accounting records for the years in business and all the customers were set up on auto pay w/ credit card and there was a profit of $300,000 yr that would look great in my book. I would require seller to stay on board for 2 yrs as consultant ,sign non-compete and offer % for retention in 1st year. Starting offer would be $343,750.00.

    JMO
    James
     
  10. JFGauvreau

    JFGauvreau LawnSite Bronze Member
    Posts: 1,297

    I agree, but like others have said it all depends on equipment, customers, accountant etc. But for sure the business is worth a couple of years of gross + % of gross each year.
     

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