Purchasing a business/Business Valuation

Discussion in 'Lawn Mowing' started by ParksLandscaping, Jan 11, 2001.

  1. ParksLandscaping

    ParksLandscaping LawnSite Member
    Posts: 65

    I had a man call me about selling his landscaping business. He is retiring and has built up quite an operation. I am wondering if any of you guys know of whom I would contact to see about getting what I think what they call a business valuation. I just want to get an idea of what, the building (shop), property, equipment, etc. are valued at. I am sure that I could come up with a figure, but I am not sure how accurate it would be. Also, if any of you guys have purchased others accounts, or the complete business, was it a good/bad experience, and would you do it again? But if any of you could help me, it would be appreciated. Thanks!!!

    David Parks
    PARKS LANDSCAPING & SNOW SERVICE
     
  2. Getmow

    Getmow LawnSite Senior Member
    from VA
    Posts: 445

  3. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    can't speak for any-one but myself ...... purchased a going concern 3 years ago ...... to prime the pump..... get some quick accounts ...... paid 2 months of "up front billing" so monthly income was say $1,500 and paid $3,000

    Now this is iffy at best ...... you have to really be confident in your self ...... I worked the accounts with the man for 2 weeks (free labor) meet most the people etc ..... worked out ..... although just a few stated "oh we paid so & so for this months service alread)....had a "non compeat" contract drawn up ...... again not really a legal bind

    Later in the year ...... I bought a very nice business accounts & equip ..... as the owner was moving up north ... I even kept the employees & the crew leader still works for us ..... just a few bugs to work out but it really helped getting an extra truck on the road

    I'd do it all over if I had too ..... and on the other side of the coin I've sold accounts .....just treat your people how you would like to be treated

    Final note ..... one of my guys did leave us to start his own ..... I sold him some accounts & an old mower-trailer ..... after 1 season he did not like working for himself ....and he is back with us today
     
  4. Pauls Mowing

    Pauls Mowing LawnSite Member
    Posts: 207

    A commercial realtor could give you a fair market value on the property and building. See what the property taxes are, it should show the value they are placing on the property. Use the factors if needed to find real value. Usually property tax assesment values are lower than actual market values. If you are serious about his operation, his books and tax records will also indicate this, you need to see these.

    Paul
     
  5. Bought mine in 1985 and still runnin. I just had to make it work. Still a one man show and would do it all over again. I took over accounts that were in good shape and some were just mow n go types. Small scale though. Not what you might be looking at. Do all things legal, and get the seller to support your endeavor in any way possible esp. training and P.R. with clientele.

    "I love my boss, I love my job, I'm self employed".

    Aloha,
    P.Y.S.
     
  6. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Posts: 489

    David,

    Check out Pro Magazine a few months back, they had an article about that subject.

    You might want to consider paying for the accounts on a percentage basis. That is, as you get paid, you pay the previous owner. That way, you won't be paying for those clients that might drop you. If this guy has employees doing these accounts and they are turning a profit, then that's good. I would keep them.

    Someone said that you should go over the books (not just the tax returns). That is good advise and a "must". If he is unwilling, I would be weary!

    Think about this:

    If the accounts are making $1500 per month and he wants $3000 for them, then... Would it cost you more or less than $3000 to get another $1500 per month in business?
    If you could do some marketing and bring in another $1500 per month in business for less than what he wants for the accounts, then it isn't a good deal in my opinion.

    The equipment is subjective. The property might be had for less than market value which would be good.

    A "turn key" operation is better than a "owner-operator" situation.

    Good Luck!

    John
     

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