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Selling my mow route. What's it worth?

Discussion in 'Lawn Mowing' started by Mile High, Aug 25, 2005.

  1. Mile High

    Mile High LawnSite Member
    Posts: 20

    I am considering selling my mow route. What is a mow route worth that brings in 90K? The route is tight, all in 10 sq. miles. Making $60 to $100 per man hour. Each day 22-25 lawns, one guy can do alone, mostly small lawns under 3000 s.f., all residential. On each mow day, all lawns in a 3 sq. mile radius (not a lot of driving around time). Thinking of selling with or without equipment.
  2. dixiedemon

    dixiedemon LawnSite Member
    from ky
    Posts: 24

    i have a question for your question, another lco came to me with a list of his clients, he wants me to buy them he is going out of the business after this year why should i pay him for them when he will no longer have them and i know what he gets for each of them and by the way he wants 15k for just the yards all residental 35k for everything mowers yards, etc.
  3. HighGrass

    HighGrass LawnSite Bronze Member
    from Z5 MA
    Posts: 1,237

    I did some quick math, let's see if I'm in the ball park.
    You're average per lawn is $80/hr. A single person can accomplish the 22-25 lawns per day. That's roughly $1840.00/day times (assuming here) 5 day work week equals $9200.00. Now if in CO you can (?) work a 20(+/-) week season, that works out to $184K. So where are you getting 90K?
  4. CuttingCrew

    CuttingCrew LawnSite Member
    Posts: 193

    He stated $60 to $100 per man hour. Not per yard. I figured he was doing several yards an hour at 22-25 a day.

    10 hours a day, five days a week X 20 week is $80,000 a season.

  5. stevo22

    stevo22 LawnSite Senior Member
    Posts: 344

    now this is just me personally...if i were going to entertain the idea of paying someone for their accounts i would do it one of two ways...1. draw up an agreement that would pay the seller x amount of money per yard over the span of say three months...say it is a $35 yd with say 25 cuts ($875)...not sure if your cuts are higher or lower...come to an agreement to pay say 15% (130) over three months...this is of course after he and i have visited each property to speak to each homeowner and looked at each property...

    2. i would pay someone what i thought it was going to be worth to me, not to the selelr...you might think that your 90k route is worth say 20-35k...a buyer might be only willing to buy them for 8k, and probably not all up front...

    instead of selling, why not hire and have someone else do the work...pay them well and not lift a finger and still prob make more than you would by getting someone to buy them...
  6. HighGrass

    HighGrass LawnSite Bronze Member
    from Z5 MA
    Posts: 1,237

    OOps...you're right. For some reason I missed that. So he's doing 2-2.5 yards per hour.

    I've never had to "buy" accounts before, but If I could guess, I would have to say I would treat it like a finders fee. Maybe say...10% of the gross annual income per yard? So maybe $8000.00?
  7. Vassk1

    Vassk1 LawnSite Member
    Posts: 49

    50% of sales. Will probably sell for 50% of asking price..so around 25% of sales plus equipment would be the rule of thumb. I actually just looked this up in a business broker book.
  8. HighGrass

    HighGrass LawnSite Bronze Member
    from Z5 MA
    Posts: 1,237

    So when a buyer purchases these yards at a given price, is there usually any stipulation as to accounts dropping?
  9. firstclasslawncareandplow

    firstclasslawncareandplow LawnSite Member
    Posts: 162

    Now i'm kinda new at this also, but i heard from a very large local company that the contracts are only worth what they will make you in ONE MONTH!!! The guy i talked to said that with a switch of ownership many people will go looking again and you will loose many of them!
  10. Vassk1

    Vassk1 LawnSite Member
    Posts: 49

    BS as far as I am concerned. Listen. If you are professional with your work and the seller properly introduces you to the customers then they have no reason to drop you. Of course, you should work with the seller for a couple of weeks before he/she even mentions it to the customer, this way they will see the work you are doing.

    You may lose 10% of your customers. For arguments sake you do lose 10%. Are you telling me you wouldn't spend 25-30k for a "job" that easily nets that? I think it's a fair trade off. This is an investment. There are risks. If you can't handle risks then you should be working for a LCO, not owning one.

    Let's say company A operates in Florida using a 40 week year. They have 200 accounts charging 30$ per cut. That is a $240,000 gross per year easily netting over 100k for the owner. You're saying that business is worth around 20-25k?! That's laughable. I'd love to buy a job that nets 100k for 25 thousand dollars. So would everybody else. Not gonna happen. At least not in this industry.

    I don't even own a company. But I would if they were this cheap.

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