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What should it cost?

Discussion in 'Starting a Lawn Care Business' started by pushu2, May 26, 2004.

  1. pushu2

    pushu2 LawnSite Member
    Posts: 11

    I have an oppertunity to buy an established lawn mowing and plow service with 187 customers on the lawn side, mostly residential. What would be a good offer to make for the customer base as well as all equipment needed to service them?,
  2. EZTarget

    EZTarget LawnSite Senior Member
    Posts: 295

    a hole bunch
  3. EastProLawn

    EastProLawn LawnSite Bronze Member
    Posts: 1,110

    Too many variables !

    Sizes of yards ?

    Amount of $ per yard

    Any equipment coming with the sale ?

    and many more ??????????????

    We need more info.........................................

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Are the customers on contract or can they leave? Make sure that seller does not compete. Can you handle a business this size? Do you want to? Have seller open the books to you and check for profit. Why is he selling? 187 customers at $10 each when it costs $12 to do them is not worth anything. Dig deep into the numbers and if anything looks fishy---run.
  5. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

  6. boonhogganbeck

    boonhogganbeck LawnSite Member
    Posts: 45

    You should consult with your CPA and attorney when buying out a business. Some CPAs also carry the certified valuation analyst designation (I think that's the right terminology). Anyway, they're experts at valuing businesses and many specialize in small business transfers. The value of the business encompasses much more than net assets, gross revenues or net income. Also to be considered are intangibles such as future earning potential, reputation, value of the business trade name, etc. Also, how are they incorporated? Is it a sole proprietorship, single member LLC, or a corporation? Is this an asset sale or would you buy out his corporate stock or his LLC? Are there any judgements pending against the business entity? Also, you should probably have a non-compete provision in the contract as well. Consult your attorney on this.
  7. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    I was just going to say the same thing, talk to an accountant to determine the value of everything, and then talk to a lawyer to handle all the legal aspects
  8. pushu2

    pushu2 LawnSite Member
    Posts: 11

    Thanks to everyone for sound advise.

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