Sale of company

Discussion in 'Lawn Mowing' started by benjenson, Jul 28, 2003.

  1. benjenson

    benjenson LawnSite Member
    Posts: 3

    Can anybody in the northwest area (Seattle, Portland, Puget Sound area) give me some tips on selling a commercial landscape management company. I have done a little research but I am getting conflicting info from several parties.
    Some say that I should accept no less than 100-150% of GROSS sales for one year of business. Others tell me that I will be extremely lucky to get 35% of a years sales. The latter seems to be more realistic for the industry. I should hit about $400,000 in gross sales this year and I just want to know what to expect in the next couple of years when I decide to get out. I know that there are alot of factors that measure in, but anybody that has sold and/or purchased a company , please give me some tips.
     
  2. CMerLand

    CMerLand LawnSite Senior Member
    Posts: 393

    Ben,

    Not that I have the total answer for you since Im on the east coast however, the first thing you need to know is that gross sales MEANS NOTHING. Unless you can find the dumbest buyer in the world (theyre out there) NET Profit is what most intelligent business people will be most interested.

    SO you grossed 400,000, what was your NET profit after all expenses and youve paid yourself a reasonable salary? How much would you yourself pay for a company that does 400,000 in sales and has 450 K in expenses?

    ME?? I wouldnt pay anything since they are heading for bankruptcy and youll be able to get everything at the fire sale.

    Do a search. There have been many other threads posted regarding the sale of businesses and a wealth of knowledge to pick up on.

    Good luck.
     
  3. benjenson

    benjenson LawnSite Member
    Posts: 3

    Thanks!! Anything helps.
     
  4. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Find a business broker in your area .... as well as check the advo's in back of the turf mag's

    As to the "worth" .... that is going to depend on bottom line profit yes ..... but also the type & length of contracts .... amount of assets vs liabilities ..... growth ability in the market .... present good will of your company ..... soooo many more things than just profit .... but yes CMerLand .... did hit the #1 factor ....profitability would be top in ALL concerns

    A company presently set up may wish to expand (or even one outside of the area may wish to make a presence) ..... these company’s may be able to create greater profit due to having lower overhead cost .... as you more than likely already know ....as you create greater income certain cost actually become a lower percentage against gross income ….. but of coarse other cost rise …. Such as direct or indirect cost …. They may have better systems in place to create better profit than you were able to ….with 400K of income you must have more than just basic business sense …so I'm sure you have a good idea of what kind of $$ you want out of it

    Good Luck
     

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