Buying a competitor

Discussion in 'Business Operations' started by Ground Master, Mar 8, 2002.

  1. Ground Master

    Ground Master LawnSite Senior Member
    Messages: 505


    I did not buy this business. I really never was, just wanted to put out the information to get feedback. I felt from the beginning that the asking price was way too high. I had met with the owner in an effort to get a feel for what lawn services may be worth and selling for in my area. I've looked at a few over the years, and they were all way too high.

    It seems that the owners are just too "attached" and feel that there business is worth a fortune.........most likely because of the hard work that they put into it over the years.

    I've come to the conclusion that the value of any lawn service I may buy is worth the market value of the equipment plus a percentage of sales from the first year of "takeover". That percentage is the hard part to determine.......perhaps 10 percent on the low end to 40 percent on the high end. By paying a percentage of sales you protect yourself from those customers that will jump ship.

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