Value this Fert/squirt business for me

Discussion in 'Pesticide & Herbicide Application' started by grassmasterswilson, Jul 23, 2013.

  1. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,945

    So I have tried over the past few years to buy this business. He keeps posting ads but we can't come to terms. As with any seller he want what I think is too much and I don't want to pay for everything upfront.

    So here is some ports of the ad. ....

    - Business is well positioned with a base of approximately 30 application accounts plus other landscape maintenance customers.... He charges a premium over what I do. Lawns may be average 15k and he does on average 5-6 apps of Fert, weed, insect, pre
    - aeration and seeding.. Might be half his list of 30 but I'm not sure
    - landscape maintenance (pruning, mulching, etc.)
    - irrigation installation and repair... I don't do irrigation at all but could sub contract it out
    - lawn cutting...very few but could be an upsale.
    -design/build/install landscape projects... I don't do which would be little value to me.
    -water features (garden ponds, and water fountains)...don't do
    - topsoil that is blended on office isn't close and I'm sure land not included in sale.

    EQUIPMENT THAT IS INCLUDED WITH THE BUSINESS:-----gonna assume fair-good value.

    1- BED SHAPER...
    1- 6' BOX BLADE...
    1- 6' PULVERIZER TOOL...

    I made an offer last year but want per to do a down payment and them 6 quarterly payments to come from revenue generated from his client list.

    So anyone care to help with a very vague ballpark price?
  2. RigglePLC

    RigglePLC LawnSite Fanatic
    Messages: 13,670

    Perhaps about $12,000. Say $6000 plus 6 payments of $1000. No winter payments. Mainly for the fert and squirt customers. Or maybe 4 times yearly profit.
    Aeration, seeding and pruning are too irregular and yearly profit is too low; not worth much.

    Buy only the equipment you want--Like the Permagreen spreader--at fair market value.

    Summer is good for transition--because your competition is not handing out thousands of brochures and flyers.
  3. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,783

    How much does it cost you to obtain a client? Multiply that by 30. Multiples of earnings, etc fall apart witn small cos like this
  4. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,945

    Had to look back in my past notes. In 2011 I figured he did around 25k in apps/seed/aerations. Another 10k or so in about 5 mowing customers and various pruning and mulch apps. So maybe $35k in the area of business that I'm interested in. He stuck with apps and landscaping and didn't advertise mowings. M
    Most of sales came from those 30 customers.

    I'm trying to look at it from a value stand point but also the potential(even if bad). Say we work outa deal, by introduction and offering my services what I might pick up not counting my presence in a nearby city. I offer mowing, Fert/squirt, aeration, seeding, Mosquitos, etc.

    So of the 30 customers that would get apps I wonder how many I could sell mowing or mosquito treatments to? Could I pick up 7 more mowing customer? That could be an additional $10k?

    Plus it's the end of the season.
  5. eggy

    eggy LawnSite Bronze Member
    Messages: 1,085

    I think I would pass all together
  6. Forever Green Lawn

    Forever Green Lawn LawnSite Senior Member
    Messages: 282

    Figure out how much you would spend on advertising to get 30 more fert/mowing accounts. How much of the equipment are you interested in/need? Figure a price on that. If he's asking much more than those combined figures, you may want to take a pass.

    GOATMAN GEORGE LawnSite Member
    Messages: 88

    Do not wonder if you can up sale any of these potential clients. You can only count on their already agreed & laid out services. You figure out his monthly gross revenue based only on the scheduled services.

    Then, you have to determine what your net can be at his premium price. For example; he could be paying 20% more or less on fertilizer, have a gas guzzler, a $22.00 per hour employee, etc. so your operating costs will likely be different. Determine what you can really afford to offer based on that net per month, which you would be using as a payment. Possibly even share this information with the seller combined with a reasonable offer to explain to him your costs on paper and that you are not being greedy.

    I did this and gave up ALL the net which ended up being bout 27% of gross. of the add-on for 1 season. I did obtain a lot of additional services from these clients that I profited from that season. I only owed net for the scheduled maintenance services in the deal. It worked out great for me.
  8. ted putnam

    ted putnam LawnSite Platinum Member
    Messages: 4,698

    I have to agree.

    If this is all he had, he was doing it for extra cash/part time income.

    They do sound like high end clients but with no guarantee of keeping them next season and this season being half over along with the fact that there's only 15 of them, I would pass. JMO
  9. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,945

    So I'm curious what you would value the equipment list at? Assume everything is fair to good condition. $10k?
  10. DA Quality Lawn & YS

    DA Quality Lawn & YS LawnSite Fanatic
    Messages: 9,266

    Equipment and accounts are only of any value to you if you are in that particular segment of business. His landscaping and water feature business is of no value to you, yet is to him. Therefore he is going to want a premium for the whole ball of wax, one that you should not pay. See if he can segment off just what you want.
    If not, take a pass.

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