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What financial aspects tell you if buying a lawn and landscape company is a solid investment?

The company has approximately $75K discretionary cash flow against $500K sales.
What do I consider to determine if this a viable investment?

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Answers (2)
Rhett Kniep, CBB
Centurion 7 Development, Inc.
Placer County, CA
Premium Broker

Profit as a percentage of revenue can be important, but not always.

One of the main considerations for an investment is simply this: does this cash flow figure incorporate a full time manager who can operate the business with little to no active involvement from the owner?
A business's cash flow is only as good as what it includes. Will the business make 75K with me as the owner working, managing, and regulating or will it make 75K with me on a road trip or at the beach?
If you as the owner have to be regularly involved, it better be making enough to pay you a salary AND a substantial profit. Otherwise, it might not be a worthy investment.

Aug 26, 2015
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The BAF Group LLC

Does it have contracts with any customers, and in particular, commercial accounts or HOAs? How long has it been in business? The longer and more successful (profitable), the better. In particular, what about the last three (3) years? Has the Revenue and Profitability gone up, gone down or stayed the same. If it has gone down, this is a radical alarm bell!

Aug 26, 2015

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