Mike Andes breaks down a $900,000 landscape business doing $1.2M in revenue. Equipment accounts for $550,000 of the price, leaving $350,000 for goodwill. After a $125,000 annual loan payment and $100,000 manager salary, the owner nets $20–30k unless they run it themselves.
$900,000
About $1.2 million
12 to 15 (seasonal variation)
$550,000
About $350,000 (asking price minus equipment)
This landscape business is for sale for $900,000. They do about $1.2 million in annual revenue and have 12 to 15 employees based upon the time of year. Now they're asking $900,000, but $550,000 of that is equipment. So really you're paying about $350,000 for Goodwill, the brand contracts, employees, the leads and their database, etc. Now they say they're pulling in about $270,000 in profit, and that's between the 220 in owner's compensation and the $50,000 in company profit. Now, if you took an SBA loan, 9% interest rate, you're looking at $125,000 in payments per year, which doesn't sound too shabby. But the thing is, if you hire a general manager to actually run this location for you probably have to pay him six figures like 100 grand. And by the time you take $125,000 out for the loan, $100,000 out for the GM, you'd probably only make about 20 to $30,000 unless you were going to be an owner operator.
