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Interiorscape Forum / Scaper Talk Discussion Forum / General Scaper Talk / Interiorscape business valuation
Posted:  04 Mar 2016 05:28  
looking to purchase an interiorscape business.  Trying to put an agreeable value on the accounts and purchase price.

21K monthly gross income
no assets .

Owner wants 10 times monthly revenue.

so $210,000 for he whole business.
Accounts are all mature and on a 30 day notice.  Plants are all leased, but containers were purchased by clients.

What is the industry going rate for accounts value??
Is the $210,000 figure in the ball park or way off
Posted:  04 Mar 2016 16:14  
This has been discussed numerous times here and elsewhere recently, but to sum up, the old-school rule of thumb was 3 to 6 months' recurring income if you're strictly purchasing just the accounts and no other assets of the business.  Structure your purchase so that you withhold money to be deducted in the event of cancellations within the first year, so that the sale isn't finalized until the end of the 12th month.  This is to protect the buyer from the possibility of cancellations based on personal relationships with the former owner (we had just such an occurrence when we bought accounts from someone who had social connections through her husband's job with many of the residential and some of the business clients) or other circumstances beyond the buyer's control. 

Nowadays, we've heard of buyers paying significantly more than that, depending on the nature of the accounts (potential for additional locations of the same company, add-ons and up-sells, etc.) and the particular market (some very competitive markets may see purchase prices that are along the lines of 6-12 months' recurring income because of heavy competition for quality accounts).  Be sure you visit every account and see every plant before you make an offer.  And good luck!
Posted:  06 Mar 2016 15:40  
Thanks CLem.

So I take it that 60-120K is more inline for a purchase price.
Thanks for your wise advise.
Posted:  07 Mar 2016 02:23  
Something in that neighborhood.  Otherwise, I think you're shopping in a neighborhood that's a bit too pricey.

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