Its this WAY too much to buy this business for?

Discussion in 'Lawn Mowing' started by syzer, Oct 19, 2004.

  1. syzer

    syzer LawnSite Bronze Member
    Posts: 1,266

    I have a guy selling and getting out of the business. I expressed interested and was under the idea that most of his customers were commercial. It took a few weeks to get me a #. He told me he wanted to get roughly 2 years wages from the business and that seemed to be how ppl sold their business.

    Long story short I get a call this morning and we discuss things. He wants 90k for the business with 5 commercial accounts and 18 residentials.

    5k for his equipment, a 8x16' trailer with cage ont he front, a 48" belt wb, and a 4 year old bobcat ztr. I am not interested in the equipment.

    I think 90k seems WAY high to pay for this. His commecial customers have been with him for at least 6 years each. His residentials most of them have been with him for 10 years. Still seems very high. I need some input fellahs. I think I will give this a go starting fresh again.
     
    Liberty Lawncare likes this.
  2. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    Yeah it's it too much! The going rate for the accts end is normally in the 5-10% of one years revenues and then only if they are under contract and willing to keep that contract in place with you. Equipment of course is different and is market value. Nobody in their right mind would pay 2 years total revenues.
     
  3. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    ...<b>5 commercial accounts and 18 residentials....</b>


    Also unless these are huge comerical properties this is only 2 days work. Unless there is something major here $90K is a pure joke
     
  4. AL Inc

    AL Inc LawnSite Bronze Member
    Posts: 1,218

    If I could get two years gross I would sell tomorrow. Not going to happpen.
     
  5. bushtrimmer

    bushtrimmer LawnSite Senior Member
    Posts: 351

    I'd sell today for 1/2 years gross with equipment.
     
  6. chimmygew

    chimmygew LawnSite Senior Member
    Posts: 576

    Sounds to me like he is trying to take advantage of the first sucker to come along. I doubt the bank would even go for that. Always remember, the accounts aren't guaranteed unless he has multi-year contracts with them.
     
  7. syzer

    syzer LawnSite Bronze Member
    Posts: 1,266

    Hahah, thanks guys. Kind of what I thought too. What do you think would be a fair offer to make?
     
  8. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569


    As I said 5-10% of 1 years revenues
     
  9. bushtrimmer

    bushtrimmer LawnSite Senior Member
    Posts: 351

    If he wanted 90 k for the jobs (2 years income) 90/2 years = $45k/yr
    Assuming 30 cuts per year $1500/wk approx.
    Maybe 5 or 6k for the jobs
    If the equipment is in decent shape, maybe anothe 5 or 6k for that.
    If he wanted 90k, don't think he's very serious about selling though.
     
  10. syzer

    syzer LawnSite Bronze Member
    Posts: 1,266

    So the top of the line offer would be say 10k? I would love that =)! Bad thing is he wont go for it.

    I can get that many accounts ina summer though, maybe not 5 commecials, but easily residentials.
     

Share This Page