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Mulch Blower Business Valuation

Discussion in 'Business Operations' started by beezwax, Sep 24, 2005.

  1. beezwax

    beezwax LawnSite Member
    Messages: 6

    Hi - I was wondering if anyone on the site has any information regarding how to evaluate the worth of a service business, such as a mulch blower business. There is a company that I am looking at buying close by that has a good reputation in the business and the equipment they use (one truck and loader) is still in good condition - the owner believes the company can add another truck w/o any problem, but this is not the only business he runs, and signifigant management changes would need to occur in order for this mulch business to grow. From the information I have from him (plus other people that know him) is the business has grown dramatically over the last several years and their has been no signifigant competitors (except cheap labor) to enter the market. From my understanding, he wants to focus on opportunities with the other (unrelated) business so that the mulch business can still have the opportunity to grow. From talking to other truck owners, the biggest hurdle when starting from scratch is getting your name out and getting business year-round. From looking at his income per month, he has acheived this by adapting what he blows thoughout the year to keep the business steady from month-to-month.

    Is their a multiplier for the net income that is generally used to evaluate the business, or would this be too general? Has anybody else looked at buying a similiar business and, if so, what information could you provide?
  2. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    The only thing I can tell you is from an outsider's perspective as an Lco who spreads mulch by hand while purchasing said mulch from a supplier WITH a blower truck:

    First off, yes the first two years are the hardest, that much is true, thou it wasn't until my 4th year until things got MUCH better. My first year was BEE ESS, the second was far better (but a bit of a ways from optimal) while my third was worse than my second, go figure...

    Far as mulch, the guys with the blower truck have a MINIMUM of 12 yards (or maybe it's 10, whatever), and charge $45/yard. As for me, my trailer holds 4 yards per trip and I like doing mulch distributions requiring UNDER 12 yards and I also charge $45/yard.
    End result is about the same, both an experienced Lco AND a guy who knows what they're doing with the blower can lay out one FINE looking bed of mulch as thick OR as THIN as the customer wants it (and nowadays, THIN is IN because it's far more cost-effective for the customer).

    Now MOST residential yards take anywhere from 2 to 8 yards or thereabouts, only a few of the larger lots take more and the mulch truck is most commonly seen in our town doing entire subdivisions like Brandermill (they do the entire median strip all along the roads). That, and parking lots or any other place with HUGE areas to be mulched. I'd say it is safe to say Lco's like myself are mostly residential, the blower guys are mostly commercial and we refer a bit of work to each other here and there but for the most part, this is understood by the customers beforehand anyhow (they call the right guys in the first place).

    I do NOT know if this information is helpful to you, but here's the site of the guys I get my mulch from:
    Oh hey, check it out:

    Guess it doesn't answer everything, but it's a start.
    Peace out.
  3. AintNoFun

    AintNoFun LawnSite Bronze Member
    Messages: 1,807

    i would have to say now is a bad time to get into the mulch blowing business... i think people are going to be cutting back on a lot of services such as mulching in the next upcoming season. but thats just my 2 cents. this year a lot of our customers cut back on stuff such as mulching, only one trimming instead of 2, no lime, etc..
  4. Evan528

    Evan528 LawnSite Silver Member
    Messages: 2,144

    I had more people requesting add on services then ever this year.

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