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Commercial Company, Exit Multiple

tjb243

LawnSite Member
Location
Philadelphia, PA
My intentions are to start a landscaping company focused on commercial accounts. I had a couple of questions that I was hoping people could help me with.

What is the typical profit margin that a commercially focused landscaping company would operate at. Please keep in mind that a majority of the business would be maintenance business?

What type of exit multiples do landscaping companies sell for? Whether based upon net income or gross sales is there a range in multiples that companies typically sell for.

Is it an industry practice to get short to medium term contracts from clients. For example will clients give a company a three year contract?

Thanks for your help on this>
 

MMLawn

LawnSite Gold Member
WT, he can't PM yet he's new, so it will be 30 days before he can.


We are 80% commercial and all of my contracts are 3 or 5 year deals.

Also with no experience in the green industry you may find it hard to go "all commercial" right from jump street.
 

walker-talker

LawnSite Platinum Member
Location
Midwest
MMLawn said:
WT, he can't PM yet he's new, so it will be 30 days before he can.
Oh, my bad....didn't know about that one. Well....send me your email and I will let you in on something.
 

Bunton Guy

LawnSite Silver Member
Location
charlotte nc
My largest contracts are 2 years. Getting to that point is either like pulling teeth or its what they have done for 20 years.

Generally from our area companies like to sign as short of an agreement or nothing at all. In this way they can get out of anything and never be locked down.
 
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