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Value of lawn business

Discussion in 'Lawn Mowing' started by Stephen, Jan 11, 2000.

  1. Stephen

    Stephen LawnSite Member
    Posts: 81

    how would u value a lawn/snowplowing biz if your could buy out someone? guy i know has approx`16 lawn accounts and 40 snowplowing. he keeps a guy busy 40 hrs a wk doing all lawn work and extrawork in the summer, he has a seperate job and does all snow removal himself and sands by hand. has 5 by 8 trailer, bobcat walkbehind and chevy 1-ton pickup with plow along with misc. tools and supplies. he wanted 20k for equip and 25k for accounts and i told him he was nuts. i would pay 20-25k for everything but this guy thinks he's got a goldmine. On the books he bills 700/week and his laborer doing all the work runs him approx. 300/week how would u value a lawn business. in another scenario i am thinking about selling my biz here in NY and going back to school to finish my bachelors, but that's another discussion.<p>----------<br>Stephen<br>
     
  2. Eric ELM

    Eric ELM Husband, Father, Friend, Angel
    Posts: 4,831

    Stephen, The accounts is way to high. If you kept the guy to do the extra accounts, you would take in about $1000 a month after paying the help and that's not deduction for gas, depreciation or anything. Figuring 7 months of mowing a year, it would take over 4 years just to pay the 25K off. I would not pay more than a 10th of that. I have heard of guys that buy accounts and I think they gave the previous owner 1 months mowing for it. <br>About the equipment, you didn't mention the age of the truck or mower, so it's hard to give you any help on that. <p>----------<br>Eric@ELM<br>http://pages.prodigy.net/eric.erickson/index.html
     
  3. Lazer

    Lazer LawnSite Bronze Member
    Posts: 1,446

    700.00/week <br>40 hours labor<br>17.50/hour<p>Gold Mine?
     
  4. Stephen

    Stephen LawnSite Member
    Posts: 81

    sorry forgot to add pickup was 94 and mower was about 4 years old.<p>----------<br>Stephen<br>
     
  5. KUTTERS

    KUTTERS LawnSite Member
    Posts: 23

    the going rate is some time hard to determine. Let the seller put his money where his pride is, consider paying him a percentage per month for a set period of time or as long as the clients remain yours whatever comes first.
     
  6. HOMER

    HOMER LawnSite Gold Member
    Posts: 3,183

    Hi, I will answer a question with a question, andd maybe somebody can help me as well. How do you buy a lawn mowing account from another when most of the time (around here anyway) it is such a personal thing with the homeowners. If another guy showed up at my customers and started mowing their yard they would have a problem with it. If it ain't on paper, and you ain't buying an iron clad contract, then you ain't buying nuttin brother. Those people could bail on you in a minute and then you would be stuck with a big debt and no way to pay for it. I don't see this as a business you could sell like a restaurant or gas station! If I sell mine I will ask for my eqipment and thats all. I know some around here that sold a business for $100,000.00. He bought accounts, trucks, 10 year old mowers and started losing customers, I picked up some of them and others picked up more. Looking at figures may be deceiving, looking at your new customers may be reality when they say see ya!
     
  7. sunrise

    sunrise Banned
    Posts: 247

    i have payed only 1 to 2 time the cut for accounts, the mower up to you on the price for it . truck is a 94 with plow so it may have seen so hard time plowing <br>just my 2 cents
     
  8. accuratelawn

    accuratelawn LawnSite Senior Member
    Posts: 922

    I bought a business from another person. Before any money changed hands I worked with the guy for a week, met about 80% of the customers face to face and explained what was happening. He carried 70% of the asking prices and our contract had stipuations built in for customers changing to another lawn service. In other words if the customer list dried up, I did not have to pay. How can 16 lawn accounts keep a guy busy 40 hours per week? I worked alone and could do 60 residential per 5 day week. Not bragging.. Hope this helps <br>PS without the seller having something to lose, he could sell you a list of names...
     
  9. accuratelawn

    accuratelawn LawnSite Senior Member
    Posts: 922

    Sorry..rambled<br>I paid 3 weeks income for the accounts and fair market value for the equipment.
     
  10. CGS

    CGS LawnSite Member
    Posts: 44

    I have paid luckly about 1.5 times per cut, when most companies...well actually the going rate in Northern California sell/buy at 3 times per cut (account).<p>I think here in Northern California 3 times per cut (account)is just right and fair for both parties. Equipment...don't know really.
     

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