Well Established Tree Business

This 10-year-old Pinellas Park, FL tree service business pairs strong equipment backing with flexible operating seasonal hours, but carries a high asking price relative to its stated top-line revenue. Financial Performance & Asset Breakdown Asking Price: $1,650,000 Annual Revenue (Current Base): $630,700 (Historical peak: $890,000 in 2024) Included Equipment (FF&E): $900,000 (Fixtures, furniture, specialized tree care gear, and machinery) Facility Overhead: $800/month (Storage yard lease) Implied Revenue Multiple: 2.62x Revenue (Based on $630,700 base revenue; standard industry revenue multiples range between 0.5x and 1.0x) Adjusted Enterprise Value (Operations Only): $750,000 (Asking price minus physical equipment asset backing) Operational Structure & Staffing Analysis Workforce: 3 Full-Time Employees + Retiring Owner Labor Capacity Warning: A 3-person crew plus an owner-operator represents a tight crew setup. If the owner takes 3 months off annually, the remaining 3 employees must act as self-sufficient field operators. Capital Asset Heavy ($900,000 FF&E): Tree service operations require costly capital equipment (e.g., bucket trucks, chip dump trucks, grapple trucks, large wood chippers, and stump grinders). Acquiring $900,000 in late-model gear provides asset security, but requires thorough mechanical inspection to assess upcoming maintenance costs. Critical Valuation & Due Diligence Factors Unstated Net Cash Flow (SDE / EBITDA): The listing omits net cash flow figures. Tree service businesses typically transact at 2.5x to 3.5x SDE. At an asking price of $1.65M, the business would need to generate roughly $470,000 to $550,000 in annual net SDE to justify standard market multiples—which is improbable on $630,700 in gross revenue unless revenue is brought back up to $890,000+. Owner Dependency & Key-Person Risk: The listing notes that revenue varies based on "how much the owner is willing to work." This confirms the owner is the primary driver of sales, bidding, and crew supervision. A two-week transition period is too short to transfer local client goodwill, contractor relationships, and commercial bidding channels. Storm Revenue Normalization: Florida tree care businesses often experience temporary spikes in revenue following major weather events (e.g., 2024 hurricanes). You must audit 3–5 years of tax returns to separate recurring residential trim/removal baseline earnings from non-recurring storm response revenue