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Crazy3rdgen
05-12-2009, 07:48 PM
If you have bought someone elses lawn care business please speak up and the steps you have taken during this transformation from one owner to the other. Say their lawn care business had over 100 accounts and was profitable. Did you keep the business in their LLC name? Keep the same phone number? If not did you send every account a letter stating that the business name/number has changed? Any pointers?

thanks a lot!

majoe7
05-12-2009, 09:41 PM
Crazy,
Are you crazy to buy a Landscape Company? LOL :D

I have never had to buy any lawn contracts or services in my career yet, but you never know.

100 accounts and profitable. Have you seen his corporate tax returns to show this profit? Do you get equipment? Is it new, slightly used or just plain beat up?

A couple of solution to your endeavor-

1. Keep their name and number makes you established already, plus no need to start all the gov't documents. Already done for you. Just do a change of ownership and pay some fees.

2. Work with the company after you bought it, and about a month later tell all the clients that you have taken over the business. Everything stays the same, just a new owner. That way they will see your work and be comfortable with you taking over. Maybe just be straight up with the clients and be honest. That way never fails. You might lose some people due to the fact that they don't know who you are.

BTW, why are you thinking of buying this company? Have you been in the lawn care business before? Have you thought of a crew you would need to be able to handle this big account without missing a beat?

Lastly, make sure that if you buy this business make sure that you have an agreement to a no compete clause in there just in case the seller wants to get back into lawn care, he won’t be your competition for at least a year. I would do this due to the fact that he had 100 accounts and must be well known in that area.

One question, what is the asking price for this, what comes with the business?

I hope that this helped. :rolleyes:

John

Steve
05-13-2009, 04:18 AM
Do you know why the other business is selling the accounts?

Have you visited each one of them and asked yourself what would you price the job at compared to what they priced the job at?

Will they sign a non-compete agreement?

Crazy3rdgen
05-13-2009, 06:09 AM
k great suggestions guys. The reason he is selling is because its getting to be too much with the other businessnes he is involved in, which are begginning to grow and it seems to me that he wants to focus on 1 main business and run with it.

I've actually been working for this guy for a little bit, I get to see how its ran and I feel I could do a great job. There are some things I would change and i feel it would grow even more. Such as trying to gain a few high end customers with small lawns that need bagging because currently none of that goes on right now. Seems like the other business he has may bring this one down which Im a little worried about, only because time is an issue and i dont think he has the money coming in at the moment to higher people to run the show.

Comes with a 7.3 deisel 100k miles, a 60" hustler, a 66" hustler, both in pretty good shape, 2 small self propelled walk behind mowers, 2 weed wackers, blowers, big trailer, and all 100+ accounts. He's really close to my dad so I may be getting a deal. I'd say around the 75-80k range for it all.

Steve
05-13-2009, 06:15 AM
I'd say around the 75-80k range for it all.
Have you figured out how much these accounts bring in per month?

How much do you feel the equipment is worth?

How do you come up with if you feel this is a good financial deal for you or not? What are you basing it on?

Crazy3rdgen
05-13-2009, 05:10 PM
in a week.. 3000 is a little below average. Some of these yards are pretty big but not over 2 acre's.

So you figure 14-15k a month.

45,000.00 truck (not sure what its worth today)
12,000.00 for the 2 hustlers im guessing
3,200.00 for the trailer
500.00 for the 2 push mowers? guess
500.00 for the 2 weedwackers? guess
400.00 for the 2 blowers guess
____________________________
about 62,000


100 accounts

He said 80k and its a done deal. Seems pretty good to me. Steve I'm basing this on cash flow, 3k a week is plenty for me and a buddy to start out. I gathered it all quickly in my head, this is the first I took the time to write it out. Still looks good. what do you/ others think? He's still getting yards to this day.. and I know of some i could get. Should keep growing imo

Steve
05-13-2009, 05:25 PM
You said the truck was (Comes with a 7.3 deisel 100k miles)

45,000.00 truck (not sure what its worth today)

When I say all this, I am only looking out for you. To me that's an old truck. If you were looking for a truck just in general and you came across this truck with 100k miles. How much would you pay for it? $45,000? Or would you even bother with it?

Do you need that truck. Can he just keep it and you get another beater somewhere else for dirt cheap?


So you figure 14-15k a month.

What is the profit on that? Did you ask him?

Crazy3rdgen
05-14-2009, 06:00 AM
lol kbb says its worth about 20,000. Problem is financing, I dont own the business so I cant get a business loan. Its going to be tough getting money. I applied at two places so far so we shall see. Even if I get the loan for 80, i can always talk this guy down or try to, and use the remaining money as a cushion in case something was to go down

Steve
05-14-2009, 06:40 AM
So you figure 14-15k a month.
Has he told you out of that, how much is profit? This is very important for you to know.

turfmaster
05-14-2009, 10:01 AM
80k seems high to me especially for the equipment your getting.
Are these commercial 1 year contract accounts?
What would happen if in a year you lost some of these accounts?
Hopefully you retain most of these accounts your purchasing however nothing is guaranteed outside the 1 year contract signed.
That is why I am not a big believer in overpaying for another businesses accounts. They are worth something yes definitely.
What I am saying is don't just base the price of the biz on monthly cash flow alone.
Good Luck

Steve
05-14-2009, 12:49 PM
I agree. Cash flow alone means nothing. In fact it's worse than nothing because it can be a misnomer. It can be used to fool others.

Someone says oh my business makes $X a month. Ok, but are you spending $x+1 to operate? If so you are losing money. Many times people sell businesses because they are losing money or just barely eeking out a profit.

If we reflect on things we have learned in the past. Most people will not pay more than 1 months revenue for a lawn care business (http://lawnchat.com/?p=51).

If you had a choice and I said here is $80,000. You can either start your own lawn care business or go out and buy another existing one?

What would you rather do? I personally would rather start mine with minimal expenses and bank all the cash to use as needed. This would give me a great chance to learn and grow and have money to make some mistakes.

What's your view on this?

SuperiorPower
05-14-2009, 08:27 PM
Ok, first let me say, I am not trying to dampen your entrepreneurial spirit. But I think buying a business from someone else can be a bad idea. Unless of course you figure the business at the value of the tangible property that is associated with it. And even then, you don't know how it has been serviced and if it is worth owning.

Now, here are several threads where this topic and the topic of "the cost of doing business per hour" has been discussed. In the first thread first one (http://www.gopherforum.com/showthread.php?t=8686&highlight=expenses) I want to direct you specifically to my post.


And the second one (http://www.gopherforum.com/showthread.php?t=7132&highlight=expenses), has a lot of good info to read on.

Crazy3rdgen
05-15-2009, 05:02 PM
I'm glad to see all of you guys are looking out for me. It just seems so nice that the business is established and has had time to grow.. on the other hand that comes with a hefty price. I asked if he would work with me a little bit on the price and I quickly got a F no. Said he told a realtor it was for sale and the first person to bring the money its theirs. He counted 126 lawns, I asked for some paper work of all the accounts and what he is charging for each, to atleast crunch some numbers and see if this is worth it. I just sent some forms in to a lender so I'm waiting to see what a rate will be for what Im asking. I guess he thinks equipment appreciates instead of depreciating. talks about a 45k dollar truck, yeah youre right it was, 7 years ago.. same for the mowers, they arent worth but what 5k a piece today if that? I sware there are tons of people out there right now with a little truck and a mower in the back picking up the few lawns here and there with no insurance or anything. I try to start up my own business in lawn care it'll be tough as hell. There's no guarunteed income after I spend say 50k on equipment. And no lawns. I guess I could start out very small, but i like stepping into something that has grown with the potential to grow even more. Ehh we shall see..

turfmaster
05-18-2009, 08:44 AM
Many of us were faced with the same situation of either buying an existing LC biz or starting our own. Starting a lawn and landscape business is very inexpensive compared to other businesses such as retail or manufacturing unless you over pay someone for their equipment and accounts. Keep a full
time job to live on and start your business part time and build it from the ground up adding equipment as you grow. More than likely it will take you a few years till you can go full time in your business but if you do it right you will have minimal debt. This is the key to any successful business. :)