Price for Buis

Discussion in 'Lawn Mowing' started by -, Feb 6, 2001.

  1. Guest
    Messages: 0

    I would like to get your input about what you guys think this buis is worth.A guy I know wants to sell his buis.I know him for a good 11 years he has been in it for at least 8 years.He has 70 accounts that the majority get full service.I haven't gone through his books, this is what he tells me. He says he netted $50,000 last year from March to end of Nov, with one worker.He wants $30,000 with equip,which consists of 14ft enclosed trailer, (1)32in Toro,(2)21in Toro, (2)Red max blowers, (10)Billygoat power blower,(1)Red max trimmer, (1) Red max Line trimmer, and some other miner stuff. However I have this equip and have no need for it!Whats it worth.
  2. kutnkru

    kutnkru LawnSite Silver Member
    Messages: 2,662

    Upstate many try to get 30% of the gross.

  3. Getmow

    Getmow LawnSite Senior Member
    from VA
    Messages: 445

    His net and yours might be two different things. Look at gross reciept, how long the accounts have been with him, the time left on contracts and if you really want the work.
    The used equipment is just that. If you know this person you should know if it was taken care of.
    Good Luck.
  4. Green Acres

    Green Acres LawnSite Senior Member
    Messages: 316

    I have never bought a business but might someday. Are you going to pay cash or take a loan out for it? If you take a loan out how long can you take one out for and what is the interest rate on something like that?
  5. Guest
    Messages: 0

    First of all thanks for quick responses. However could you guys give a number on what you guys think its worth. And to reply to Green Acres. This would be a cash transaction which I would like to make in 3 payments over a couple of months, with a legal contract that states You can no longer work at these accounts and or in the vicinity and if customers leave before I start to ajust the price and stuff like that.
  6. osc

    osc LawnSite Senior Member
    Messages: 502

    10-12% of the gross for one year. The equipment isn't worth 5k.
  7. VLM

    VLM LawnSite Member
    Messages: 189

    I agree with 15% of the gross. I would ask to see his tax return or a bank transaction composite, or at the very least a copy of his accounting records. You have to provide all of these when you apply for a loan. If you dont want the equip. just tell him to keep it. So a rough figure would be about $7,500. You may want to ask for his customer list and give some of them a call. It could be that alot of them have already found someone else or he may have slacked off knowing this was his last season and they may be so pissed that they won't want to have anything to do with you. Worth checking into.
  8. Nathan

    Nathan LawnSite Member
    Messages: 193

    We had a similar situation last year. Bought a company with approx 30000 gross and equip worth about 3000. We paid 4000. The equipment wasn't truly worth 3000 to us since we already had most of what we needed so it was considered to be almost worthless. It sounds like this is about where you are. Tell the owner that the equip. won't make the deal and he can decide whether or not to seperate the accounts and equip. Offer him 10% of gross and a true value to you for whatever equip. you need. He will go for it if he is really serious. If not leave an offer standing. Most likely no one else will jump on his initial offering.
  9. awm

    awm LawnSite Gold Member
    Messages: 3,354

    If this is 70 accts mosly contracts.I would go
    around with him to individual accts .
    You pickum at random.If the buisiness is solid
    should be worth 20,000 offer,and work from there.
    Some would disagree but thats what i would do.
    equipment but used is hard to put a value
    on.You dont needit let him sell it in paper
    separate OR YOU GET IT CHEAP
  10. GREG R

    GREG R LawnSite Member
    Messages: 105

    I'm in the same situation, I do some sub work and the guy came to me asked if i was interested in buying his customer
    list (retiring from hard labor)

    I think I will suggested a price and payments to be made off of a percent of the income generated from his customer list. I run a 57% net profit, which gives me a good idea
    on what can be profitted and satify him.

    I don't like the idea of a bank loan and the risk of someone
    else business because everyone treats their customers differtly.

    also take in consideration of the accounts you might drop because they are unfavorable to your present business
    I haven't gone through with this yet, but if this is a bad
    idea please let me know....soon
    "just some different views from different folks"


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