THE SHORT ANSWER
Reconcile actual jobs to supported annual earnings, including necessary skilled replacement and equipment costs. Define what assets and obligations are included in the proposed price and seek relevant comparisons on the same basis. A specified-job remainder, generalized landscaping multiple or chipper replacement cost does not establish certified tree-service value.
Use a specified-cost job bridge carefully
Review service mix, estimating, crew hours, hired equipment, transport/disposal, outside work, rework and credits. Reconcile job records to annual reporting and identify costs already included elsewhere before deducting them again.
| Invented specified tree-job bridge | Amount |
|---|---|
| Specified revenue | $2,500 |
| Specified labor cost | −$900 |
| Specified equipment-hire cost | −$350 |
| Specified transport/disposal cost | −$200 |
| Specified outside-work cost | −$150 |
| Remainder after only these costs | $900 |
The specified costs total $1,600. The $900 remainder covers only these assumptions; annual financial results require all relevant work and expenses rather than multiplication by a hoped-for full schedule.
Establish consistent annual earnings and skilled replacement
SEC adjusted-measure guidance is an issuer-reporting presentation reference.
(SEC: non-GAAP financial measure interpretations)Have the accountant define the starting measure, period and each supported adjustment. Trace actual deductions and ongoing purpose. Draws, debt principal, capital purchases, every vehicle expense and one-time renovation are not automatic add-backs. Model necessary estimating, sales, field, supervisory and equipment-care replacement consistently.
Use the earnings-basis guide to distinguish owner SDE, managed earnings and cash after financing, taxes and investment. No generic earnings threshold, operating history or recurring label decides the correct metric or multiple.
Compare the actual work and unresolved risks
OSHA’s tree-work card identifies fall, electrical and struck-by hazards.
(OSHA: Tree Care Work hazard-awareness card)Arrange qualified review of actual work, training, incidents, claims, insurance and remaining operating conditions. This 2014 awareness card is not a current full standards review or company inspection. Review actual skilled coverage, customer terms and equipment capability rather than assigning a fixed safety or retention premium.
Seek relevant actual sold comparisons on consistent financial and asset definitions. The landscaping historical table is broad category context, not a tree-service-specific sample or EBITDA benchmark. Future storm volume, geographic growth and new services remain explicit forecasts.
Define included equipment and delivery conditions
SBA sale guidance addresses assets, liabilities and agreement scope.
(SBA: closing or selling a business)Verify title, liens, leases, condition, maintenance and necessary investment for actual equipment and vehicles. Separate hired, personal and customer-owned items. Determine what an earnings-based price already includes before adding every truck and chipper at replacement cost.
Define stock, receivables, payables, deposits, incomplete work and complaint obligations using the delivery guide. Keep annual expense, required investment and agreed cash delivery distinct. Use the seller evidence guide before discussing a supported price. The scenario tool computes stated assumptions; it does not certify a valuation or establish a market bid.
Owner questions
Is the invented $900 job remainder tree-service SDE?
It deducts only specified job costs; full annual reconciliation and owner replacement are still needed.
Can a landscaping multiple price every tree company?
Compare actual services, financial definitions, owner roles, assets and relevant sold evidence.
Does equipment replacement cost equal business value?
Review condition and agreed price scope before adding assets already included in an earnings-based value.
Sources and review scope
Source review completed . The sources below support the identified concepts or rules; they do not validate hypothetical amounts or a valuation of your business.
- SEC: non-GAAP financial measure interpretations
Staff interpretations last updated December 2022: recurring operating costs and distinguishing EBITDA from adjusted measures. SEC reporting context, not a universal private-sale rule or automatic acceptance of add-backs.
- OSHA: Tree Care Work hazard-awareness card
Two-page English/Spanish worker-awareness card dated December 2014: falls, electrocution and struck-by hazards, training, worksite assessment and usable equipment. Used for qualified transaction-review questions, not technical climbing/rigging/line-clearance instructions, a full current standard or an inspection of a company.
- SBA: closing or selling a business
Valuation approaches, sale agreements, assets and ownership transfer.
Confirm tax, legal, accounting and lending applications with the relevant professionals. Historical market observations describe the stated period and reported sample.
This is educational material. Industry figures and program rules can change; check the original sources and your advisors before applying them to a transaction. Calculator scenarios are not appraisals, lending decisions, or offers.
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