Buying out a lawn care business.. How much do you think its worth??

Discussion in 'Starting a Lawn Care Business' started by The Cutting Edge, Aug 14, 2007.

  1. The Cutting Edge

    The Cutting Edge LawnSite Member
    Messages: 141

    I have been thinking of buying out a business that has been in the biz for three years. With this business I would be getting 40 accounts that are all within a 15 mile radius alot are in the same subdivision which brings in ruffly 6000.00 a month in mowing and also includes 60 inch exmark lazer z with 240 hours, 52 exmark turf tracer with 400 hours an older 48 inch exmark belt drive but runs great, 16ft trailer 1992 ford f250 120,000 miles on it, 2 stihl weedeaters bought this year, 1 stihl br340 blower, 1 redmax hedge trimmer, 1 stihl edger bought this year, pull behind aerater, honda push mower, a bunch of misc hand tools, and 3 wheel barrels. All of the equipment is in very good shape and the two newer exmarks are stihl under warranty!! The owner of the company is willing to work with myself and one guy on my crew for 1 month to show us how they run the routes and as well as introduce myself to a the clients and explain that I will be taking over the business. The owner has shown what the gross was for each month as well as gross for the months they did mulching which was around 22,000.00 this year. I know that my company can handle the work and it would be great for my business. I would also be getting the company number which I think is a big plus because they have done alot of advertising this year and are a pretty reputable company.. What would something like this be worth?? I have not bought out any companies before so I don't know what kind of price I should be paying... My company has been in business for a couple of years and all of my equipment is paid for and I have very little overhead.. So if you guys could give me some help I would greatly appreciate it. Thanks The Cutting Edge Landscaping and Lawncare.....
  2. pbdlandscaping

    pbdlandscaping LawnSite Member
    Messages: 50

    wow, tough to put a number on a business like this...i'd take the worth of the equipment and then see what kind of guarantee you can get on the accounts staying with your company, and then pick the seller's brain for about how much he thinks the accounts are worth...and then go from there...
  3. The Cutting Edge

    The Cutting Edge LawnSite Member
    Messages: 141

    I did the math on the equipment and I came up with ruffly 18,000 give me a ballpark figure...
  4. TSG

    TSG LawnSite Senior Member
    Messages: 444

    Market value of equipment
    30% of gross revenue
    35- 40% if all accounts have 1 yr contracts.
    Make sure it is an installment buy for the contracts based on how many
    stay a yr.
    Do it in 1/3's,,,,,,,,,,,,
  5. KTO Enterprises

    KTO Enterprises LawnSite Bronze Member
    Messages: 1,286

    I vote on around 20 percent of gross in a year

    I definitely agree that it should be set up on how many accounts stay.
  6. mdvaden

    mdvaden LawnSite Bronze Member
    Messages: 1,946

    The results may be better from buying a multi-worker company, than gettng a small company built on the work and skill of one or two knowledgeable professionals.

    One man I knew, sold his lawn business, and the next guy lost most of the accounts, because the customers really liked the first "guy". It was more personally built.

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