What's the business worth. 500k revenue

Discussion in 'Business Operations' started by Riverstonelc, Jan 4, 2013.

  1. Riverstonelc

    Riverstonelc LawnSite Member
    Posts: 11

    I have a lawn care and landscape business in tn . We do a little over 500k in revenue per year. Have 4 dodge diesels , one is a mow bed and one a flat bed. Have a 2011 Kubota tractor and back hoe have a 743 bob cat . Have a couple of mowing trailers and a big tex dump trailer, and big tex goose neck. Have aerators, 5 exmark walk behinds 2010 ,1 grandstand 2011. 1 Kubota 326. And an exmark metro 26 and a couple other bagged mowers. 15 or 20 weed eaters ,2 pole saws , 8 various Stihl chain saws, a nice portable office, 30 by 31 metal building 2 very effective websites . A staff of 7-9 people that are well trained. A well located lot with rent of 500 ., 1 acre comm property ,retail sales if wanted . We run 2 mow crews and 1 landscape crew and have 1 rig for back up. Owner just needs to manage , estimates,billing , production control , quality control. Take home 100-140 k per year .. Just looking for help with a value or thoughts. Thanks
     
  2. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 858

    Lots of variables so this is general.

    I would want to see the equipment and the customer base separated - if not I'm offering .25 cents on the dollar for the equipment. I would value the customer base on what I thought my net income could be. I want to pay back the money with after tax income in 3 years or less.

    Is the 100k profit or profit and your salary?
     
  3. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Posts: 4,166

    A cpa would give you the best advise. I would take any price from ls with a grain of salt.
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  4. ToddH

    ToddH LawnSite Silver Member
    Posts: 2,197

    (assets - liability) X 2 is the basic formula.
     
  5. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,520

    EBITDA times 2-3 plus a lowball on the assets and you retain liabilities
     
  6. klogan011

    klogan011 LawnSite Member
    Posts: 101

    Something doesnt seem to add up. How do you have 7-9 well traing wmployees. Either you have 7 or you have 9. Lets say you have 9. At 40 hour a week 52 weeks a year and a rate of 10 per hour. Which I imagine landscape crew makes more. Thats 187, 200 not including taxes or insurance. Rent is another 6000. Lets say 300 a week in gas. Prob low for that many trucks. Thats 15600 per year. That puts u at 208200 total. Add 140k in profit that 350k. That only leaves 150k for other expenses and material for jobs. With equipment you have listed sounds like your doing hardscape which. That would be tough to have that high a profit margin on 500k. None of that even includes power bills, vehicle insurance, dot tax, blades, maintenance on equipment, payroll tax, ect. Just me figuring quick numbers in my head. Sorry for rypos. This was postwd on phone.
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  7. Riverstonelc

    Riverstonelc LawnSite Member
    Posts: 11

    1 small paver job. Mostly lawn care and landscape maintenance . Mow guys are 9-11 per hour and landscape guys are 10-11 per hour. 7-9 guys means I have seven guys working in January and nine in season
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  8. txirrigation

    txirrigation LawnSite Senior Member
    from Texas
    Posts: 977

    There are a lot of basic formulas. I hear that you should sell it for what someone could realistically pay off in 7 years.
     
  9. wbw

    wbw LawnSite Fanatic
    Posts: 5,404

    2-2.5 times benefit to owner.
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  10. ToddH

    ToddH LawnSite Silver Member
    Posts: 2,197

    That is you buying right?
     

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