Looking to Buy Lawn Maintenance Company

Discussion in 'Business Operations' started by goodfellow, Nov 5, 2010.

  1. goodfellow

    goodfellow LawnSite Member
    Posts: 19

    Whats this company worth? The company has website, phone book listings, many testimonials, 50 Lawn maintenance clients approx 25 Snow removal clients, grossing $70,000.00 per year and growing. $30,000.00 in equipment includes everything to get started. Just wondering what other experienced business owners think.
     
  2. punt66

    punt66 LawnSite Fanatic
    Posts: 8,538

    Its worth market value of equipment and 1 month of revenue. I wouldnt do any more then that.
     
  3. studebaker48

    studebaker48 LawnSite Member
    Posts: 43

    i second that
     
  4. zturncutter

    zturncutter LawnSite Bronze Member
    Posts: 1,308

    Sounds about right to me.
     
  5. JD2320

    JD2320 LawnSite Member
    Posts: 132

    Except you'd all be wrong. Service businesses with ongoing accounts are generally worth 1X to 1.5X earnings. Now there may be a basic calculation for how long the business has maintained 70,000 a year in revenues that supports the value too. For example if it is a new company, or have they been doing 60-80 K a year for 5-7 years and has there been turnover or not....that sort of thing.

    But in my opinion to suggest the business is only worth 6-8000 dollars or 10 cents on the dollar is a bit ridiculous. Would any of you sell your accounts for 10 cents on the dollar?
    You can do a google search on the subject if you don't believe that.


    The equipment is always a separate negotiation, obviously.
     
  6. punt66

    punt66 LawnSite Fanatic
    Posts: 8,538

    Clients can walk at anytime. There are no contracts. You can get a lot of clients with 6-8k of advertising. Sorry, its not worth that much.
     
  7. zturncutter

    zturncutter LawnSite Bronze Member
    Posts: 1,308

    In answer to your question, Yes. On three different occasions with two different companies I have sold all or part of my company at these basic rates. On two separate occasions I have purchased other smaller companies for two weeks revenue, accounts only.
     
  8. JD2320

    JD2320 LawnSite Member
    Posts: 132

    Well maybe it's different in the mowing industry. That's a shame. Your accounts and hard work is worth more.
     
  9. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    The higher rates do apply when your buying a business, not when your buying someone else's job. To have value a company must generate income for the owner without the owner working.

    That is the difference between a company and a job. And that ladies and gentlemen is the difference between 1.5 times earnings and equipment value and 1 months revenue's.
     
  10. PLS-Tx

    PLS-Tx LawnSite Silver Member
    from Texas
    Posts: 2,385

    I agree, they can and often do walk.
     

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