Business Valuation

Discussion in 'Lawn Mowing' started by Bob's Lawn Care, May 4, 2001.

  1. Bob's Lawn Care

    Bob's Lawn Care LawnSite Member
    Messages: 35

    I have been looking for a way to figure out how much my lawn business is worth. I thought lawn& had a calculator to help me but I cant find it. When I did a search here it can up with lawn&landscapes calculator. Anyone know where I can find one?? I know the value of my equiptment, I just dont know how to figure in the accounts.


    [Edited by 1MajorTom on 05-04-2001 at 11:08 PM]
  2. Getmow

    Getmow LawnSite Senior Member
    from VA
    Messages: 445

  3. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488


    However, that site doesn't take into consideration "recasting EBIT" as it figures into the entire sales process. Recasting earnings takes into consideration those special items that small business people often take advantage of when figuring profit.

    Example: you have your alcoholic brother in law on the payroll. He works for you but isn't really that productive, but if you let him go he'll starve. New company will definitely cut him loose so you would lose his wage in your 'recasting'. Another example: you, as owner, drive a mercedes to and from the office. You as the 'manager' of the operation under new ownership might drive a work truck to and fro, so the difference between the benz payments and the work truck would become profit to the new owner. In 'recasting' you would figure this into the EBIT number.

    Maybe you put in a new kitchen in your house, and wrote off all the materials as "landscape construction supplies". After 'recasting EBIT', these dollars would be profit to the new owner.

    It is acceptable to 'recast' earnings when selling your business, and it it often overlooked during the sales process. If you document this 'recasting' it can be a helpful tool in getting more for your business.

    And, not to worry, the tax man isn't going to nail you. Recasting has been tested in court and found legal and ethical.

    I learned this in a seminar I attended a couple years ago when we were contemplating selling the business (we didn't but the information was useful for the future).

    [Edited by John Allin on 05-05-2001 at 07:32 PM]

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