This is what a $30 run gives you back.
A Screen reads the one page a broker publishes, not three years of statements. So this is the whole thing, on exactly that: a short listing, with the gaps left in.
This listing is made up. It is written from what these teasers actually contain, and no real business or broker is named anywhere on this page. The arithmetic is the real thing: every figure below is produced by the same code that runs a listing you send us.
What the listing said
Established Commercial Landscaping Company
Southeast metro market. Owner retiring after 19 years.
Long-standing commercial landscaping and grounds maintenance business serving office parks, HOAs and light industrial clients throughout a growing Southeast metro.
Asking price: $685,000
Cash flow: $247,000
Gross revenue: $1,340,000
Established: 2006
Employees: 14
Reason for sale: retirement
Well-maintained fleet. Recurring contract base. Turnkey opportunity for an owner-operator or strategic buyer. Seller will consider training period. Real estate not included, current lease assumable.
Serious inquiries only. NDA required for full financials.
What came back
Worth a look
The numbers survive the correction that kills most listings at this size. That makes it worth the next step, which is asking for the things below.
What that does to the price
| Asking price | $685,000 |
|---|---|
| Times the seller’s figure | 2.77 |
| Times what it really earns | 3.66 |
| How many times over it covers the loan | 1.73 |
| Cash on closing day | $118,699 |
A lender wants that coverage figure at 1.25 or better. The multiple is arithmetic on the two figures above it, not an opinion about what this category is worth.
We could not work the multiple on this one, so there is nothing to hold against the category yet.
What we could not see
You have not told us what you have actually run, so this read assumes nothing about your background. Adding it takes about ten seconds and it changes which of these is worth your time, not whether the numbers work.
Somebody who had told us gets this instead. This one is probably short-handed, because that is what businesses in this category usually turn out to be, and the listing does not say enough about this one to tell us otherwise. That is the shape you are strongest in. It is where what you have run is worth the most money, and it is the reason to keep asking about this one.
A Screen run by somebody who has told us what they have run also gets this listing held up against their own background. Fourteen people and a retiring owner is a different listing to somebody who has run crews than it is to somebody who has not.
What to ask for
Send this list back. Coverage on this one is full, and the report says so rather than building a tidy number on the gaps.
- What is inside the cash flow figure. Every cost the seller added back to it, named, with the amount. That one line decides more of these deals than the negotiation does.
- Whether anybody is paid to do the owner's job today, and what that costs.
- Two to three years of tax returns, not a summary.
- How much of the $1.34m is under contract and how long those contracts run.
- How many customers make up the top quarter of revenue.
- What the owner does in a week, and who does it after close.
- The lease. How long is left, what it costs, and whether it transfers.
- The condition and age of the fleet, and what has been deferred.
Questions to send the broker
In this order. The first one can end the deal on its own.
- What exactly is inside the cash flow figure? Send the list of add-backs with an amount against each one.Every other number on the page is built on this one, and the listing does not say what is in it.
- What does the owner actually do in a week, and who does each of those things after close?If the answer is the owner, the cost of replacing them comes out of the earnings before you see a dollar.
- Two to three years of tax returns and profit and loss statements, not a summary.A summary is the seller's arithmetic. The returns are what was filed.
- How much of the revenue is under contract, and how much of it is with the largest three customers?A business where one customer is a third of the revenue is a different business.
- How long is left on the lease, what does it cost, and does it transfer on a sale?A lease that ends in eighteen months is a second negotiation you have not priced.
- Why is it really for sale, and how long has it been on the market?The listed reason is the seller's. How long it has sat is a fact.
What this cannot tell you
- Whether the numbers in the listing are true. We read what the seller published. Nobody has checked it against a tax return, and this is not an audit.
- What the business is really worth. The category multiple here is our estimate and the price is a negotiation, not a calculation.
- Whether the customers stay. That lives in the contracts, the concentration and the relationships, and no listing shows it.
- Whether you would be any good at running it. The fit check does that, on your answers rather than on this listing.
- Whether the lease, the licenses or the staff transfer. Those are documents, and they come after an offer.
What to take from it
It is a real business with a real problem in the listing
Nineteen years, fourteen people and $1.34m of revenue is not a hobby. But the $247,000 is the seller's number on the seller's basis, and nothing in the teaser says what is in it. That one unknown is worth more than every other question on the page.
The correction is the whole game
Fourteen people on the ground means somebody runs them. If that is the owner and he is retiring, his replacement costs real money and it comes out of the $247,000 before you ever see it. The report runs that correction and prices the deal on what is left.
A short listing is a finding, not a failure
This one is thin, and the report says so and hands you the list. A buyer holding that list is in a stronger position than one holding a tidy number built on gaps.
This is not the Deal Read
The other sample on this site is a whole Deal Read, and it is a different thing: two people reading the memorandum and two to three years of statements, naming costs that are missing from a profit and loss. You cannot get that out of the one page above, and a Screen does not pretend to.
Screen first, on everything. Buy the read once one of them survives.