what can one expect to pay

Discussion in 'Pesticide & Herbicide Application' started by turfmanagementspecialty, Oct 27, 2007.

  1. turfmanagementspecialty

    turfmanagementspecialty LawnSite Member
    Posts: 95

    Just wondering what a person can expect to pay for an existing fert and squirt company w/ equipment. His equipment is older, and in my opinion, not worth a whole heck of a lot. (older trucks, tanks, and old permagreen) He has over 300 accounts and grosses over 120,000 $$ a year. What can one expect to pay and any ideas on buying it for a percentage of whats retained at the end of the year.
  2. VP Landscape LLC

    VP Landscape LLC LawnSite Member
    Posts: 7

    does any real estate come with the business, and how much acerage of price of property and office ?
  3. turfmanagementspecialty

    turfmanagementspecialty LawnSite Member
    Posts: 95

    no real estate, just accounts and equipment
  4. RigglePLC

    RigglePLC LawnSite Fanatic
    Posts: 12,230

    As a rough estimate--I would estimate 75 percent of his annual sales. Or to put it another way--about 4 times his profit, (funds left over after he paid a reasonable manager's salary to himself.) To this figure add the value of extra assets like equipment and land. Add a few dollars for a good name and reputation.
    Worth more if the customers are long term customers. More if under paper signed contracts. More if a lot of customers pay up front.

    How are you going to finance the purchase? Banks may not want to finance anything except hardware.

    To help reduce cancels and retain the maximum customers you may want to buy his company and use his name, trucks and employees for a year or two--then merge your two entities.
  5. Tscape

    Tscape LawnSite Bronze Member
    Posts: 1,370

    Dollar for dollar to his annual gross, the equipment should be negotiated based on what you and the seller can arrive at for a value. I have seen sales as high as $1.50 on the dollar to as low as .75 on the dollar. I think the variables Riggle points out are real and negotiable as to value.
  6. garydale

    garydale LawnSite Senior Member
    Posts: 813

    RigglePLC has it right. (75% of sales)

    Use a lawyer and build in a clause to cover cancelations.

    Hold retention (10% ???) to cover cancelations and old closed accounts etc.
  7. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Heres the part I cant figure out....Squirt companies are worth a years gross...Yet everyone on here claims that mowing companies are worth a months gross.

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