How would you value this lawn company

Discussion in 'Lawn Mowing' started by RegalLawnCare.Com, Jun 7, 2008.

  1. RegalLawnCare.Com

    RegalLawnCare.Com LawnSite Member
    Posts: 106

    - Company is 3 years old

    - Works in 2 counties, which are in the top 10 richest counties per/capita in the country (in Northern Virginia/Dulles area)

    - Approximately 150 regular lawn mowing customers - 100 of which are on monthly prepayment plans - average revenue per/year per/customer about $1000

    - Approximate 40 lawn care customers on payment plans - average revenue about $500 per/year each

    - Approximately 30 Grounds Maintenance Agreements - Average revenue approximate $1250 per/year.

    Total revenue for the company for 10 months (March - December) between 180K and 225K

    Equipment:

    - 3 Ford trucks, 87 Pickup, 89-Pickup and '90 F350 Dump Truck, 1 utility pickup truck

    - 5 trailers - 7x14 landscape, 6 x 12 landscape, 6 x 12 Lark enclosed trailer, 5 x 10 mesh-on-all-sides trailer, 1 crappy "craftsman" trailer

    - 7 Walk behind mowers (all with baggers) - none hydros, 3 48" mowers (2 ex-marks, 1 old scag); 4 36" mowers (1 Ex-Mark Viking mower, 2 Toros, 1 Snapper)

    - Misc other mowers - 30" John Deere rider, 22" Husqy push mowers, etc.

    - 5-6 Husqy blowers, 5 line trimmers in front line condition

    - 1 older model pull-behind Leaf Vaccume

    - all the requisite basic landscaping tools - 6 wheel barrows, etc.

    - typically 6 workers (2 full time lawn crews, 1 landscaping crew March - May) - compensation typically is about 50% of revenue.

    - I have a custom developed system of record in MS-Access database which I've developed to do almost all company functions - scheduling, payroll, invoicing, estimate scheduling, etc. It works great!

    I'd be happy to supply more information if it would help in giving a ballpark assessment of the company value

    Thanks, Andy
     
  2. ALarsh

    ALarsh LawnSite Silver Member
    from Midwest
    Posts: 2,412

    I wouldn't purchase any that equipment. I would want to buy all my own

    Accounts worth $50,000-60,000 ball park?
     
  3. RegalLawnCare.Com

    RegalLawnCare.Com LawnSite Member
    Posts: 106

    Thanks for the reply. Maybe an easier question is this. Has an earnings multiplier been established in the lawn mowing business? For example, if the business nets 60K per/year, is there a rule of thumb multiplier of this amount that can be used to value the business?
     
  4. cpel2004

    cpel2004 LawnSite Bronze Member
    Posts: 1,415

    Do a google search, most business evaluations start at 1 and goes up from there, depending on the business and assets.
     
  5. dutchhook

    dutchhook LawnSite Member
    Posts: 93

    Andy, yes there are multiples to buying a landscape/lawn business.
    I like the general mix, and the fact that a good portion are prepaying. This should help cash flow the situation.
    There are multiples based on EBITDA that we use to value business. They don't start at one. I think that gentleman was thinking of one times gross revenue, which IS a price range for chemical lawn care accounts, but NOT mowing accounts.
    Usually we go 2-5.5 times EBITDA which is basically cash flow. I've writting numerous articles about this. If you'd like to get me your email address, I'll send something to you. Also, if you'd like me to look at the business a little more closely, I'll be happy to spend a little time on it.
    Until you contact me, you can go off of 3 times earnings of 60K, so price would be 180,000. Although I can't advise you to pay that until we look a little closer at the business. But here's the thinking. If an investor, say someone outside of the industry wanted to get into mowing, and he could invest in a business by spending 180K, and getting 60K back each year, that would obviously be a 33% return. That's a good return for some risk. But that's just a guideline. Just give me a buzz or email me.
    Steve Hoogenakker
    Steve@Landscape.Pro
    763-213-2410
     
  6. Bull

    Bull LawnSite Senior Member
    from NC
    Posts: 308

    There seems to be alot of similarities between the equipment you listed and the equipment you list as owning yourself. Could it be that you are looking for a way to value your own business?
     
  7. F.S Lawn Care

    F.S Lawn Care LawnSite Member
    Posts: 52

    The location is excellent........ Loudon county and Fairfax county are two of the richest and fastest growing counties in America, especially Loudon.....there is almost a limitless amount of work in this area which really makes it prime for this business.
     
  8. RegalLawnCare.Com

    RegalLawnCare.Com LawnSite Member
    Posts: 106

    Yes. I'm trying to get an estimated value my business. Thanks for all the responses, very helpful!
     
  9. lawnjox

    lawnjox LawnSite Member
    Male, from Olive Branch, MS
    Posts: 94

    Steve,
    what is your definition of cash flow? If you cash flowed $20000 in a month and had $19000 in expenses would it be worth $60000 or $3000?
    thx mel
     
  10. RegalLawnCare.Com

    RegalLawnCare.Com LawnSite Member
    Posts: 106

    Not to answer for him, but I'm pretty sure he means that, in your scenario, the value would be $3000.

    Andy
     

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