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General Business Discussions A place to talk about general business discussions.

Buying Lawn Care business


General Business Discussions

A place to talk about general business discussions.
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  #1  
Old 09-29-2004, 12:11 PM
sprinklerguy
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I did a search....nothing to find.

I know this gets asked a lot...so I will try and keep this brief. Never had a lawn care business before...been around lots of maintenance companies in 12 years...never owned one. Am considering it....here is what I have found:

company #1
solo operated...55k per year in season....8 months or so....no snow work....basic mow and trim....bush trimming when needed is extra.....aerifiying and dethatching..extra as well.

52 clients....aerifier and dethacher included....basically buying goodwill and phone#.

Price : $5500.00

Yay or nay? Never wanted to be a solo op..but I see it as a challenge....the extra income would be quite helpful...my business in Arizona is able to run without me for the most part...I can schedule and route from the field. no problem...do that now anyway. Perhaps the lawn care business is ready to be expanded w/ employees?


Business #2

102 clients....2 employees...owner is absentee for the most part...wife answers phone...does about 80k for the season....most of that eaten up by employees i would imagine....but still profitable.

All equipment needed to operate is included...truck/trailer...3 walkbehind xmarks 32"...1 21" toro pushmower....2 string trimmers...2 blowers....2 aerifiers...1 power rake....etc....probably not new equipment but usable....

Price $25,000.00 CASH ONLY.

Or would it be better to buy some equipment and do advertising?

My opinion:
I would think that the solo operated business is perfect for me...small enough to get my feet wet and work it myself for awhile...see if I really want to do this...downside is that I would need to buy equipment. Upside is I could probably keep 75% of these clients...he is really talking me up to them and they seem ok with it. Maybe grow this business enough to hire some guys.

Any thoughts?
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  #2  
Old 09-29-2004, 12:45 PM
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Lawn care business tipsLawn Care Business Book
Hi sprinklerguy,

Let us ask around for you and get some responses to your question.
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Old 10-01-2004, 11:05 AM
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Hi sprinklerguy,

Here is a response from "aquamtic" of P&G Systems-Underground Lawn Sprinklers
Serving Rhode Island and Southeast Mass
License# MI000193

In my opinion- I would say that the solo business is a more reputable seeing that it is operated and managed by the owner. With the other- who really know how many of those 100+ customers are happy customer.

Go with the solo and you'll build that 100+ customer base before you know it for 20 grand less
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Old 10-01-2004, 11:07 AM
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Here is a response from "parkwest" Boise, Idaho, USA

"second one sounds like a business. first one sounds like buying a job. Would need to see last 3 to 5 years of tax returns and financials to see how the numbers work out (ROI)before making an offer and starting my due diligence."
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Old 10-01-2004, 11:09 AM
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Here is a response from "tonygreek"

I would lean towards buying the 5.5k business or investing in starting his own. The range set is 5.5k - 25k and if starting your own, this range is a pretty nice budget to learn from the ground-up and invest in new equip and marketing.

With the 5.5k business, if you toss out 2k of it to cover the equip, that leaves 3.5k for what's essentially a customer list (no mention of contracts). 67 dollars for what amounts to a lead and not a sure thing. The term "Goodwill" can be ironically disappointing. If you spent that 67 dollars on prospecting your own customer, you'll be able to add another feather to your "I Understand What Makes a Business Tick" Hat.

To further expand upon the 5.5k business, the numbers provided, over an 8 month period, equates to approx 33 dollars a cut, or a shade over 2 cuts where you make zero dollars right off the bat. I'd offer him the equivalent of one cut and work from there.

Makes me wonder if there's a thread on here on "What are the true costs of gaining one customer"?

Tony,
Dayton, Ohio
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Old 10-01-2004, 11:17 AM
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Here is a response from "Bill Parrish of Fine Lines Lawn"

I get a better gut feeling about the offer of Business # 2. You would be getting some hardware in the deal and could become more profitable by sending one of the employees to one of your friends in the business who really needed him. Then shock the employee that you keep by working with him and improving customer relations by being a working owner.
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Old 10-01-2004, 11:18 AM
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Here is a response from "DanK"

I say haggle with the price more on #2.

Find out the best you can if the employees are top notch and dedicated. How long have they worked with THAT business? I figure if they have basically been running it by themselves they might be able to handle being team leaders. If so, maybe....maybe hire another employee to make a total of 4 with two crews with you being in one of them. Just throwing some ideas out there.
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Old 10-01-2004, 11:19 AM
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Here is a response from "Mike J"

The first one sounds a little better to me, but I would use the money on advertising if you already had equipment.
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Old 10-01-2004, 11:20 AM
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Here is a response from " Stephen M."

The purchase price per client in company #1 is $105.77 and the overall gross is $1057.69 per client.

In company #2, the purchase price per client is $245.10 and the overall gross is $784.31 per client.

This should be a no brainer after looking at the numbers. However, after you look at the equipment for longevity, and factor it into the purchase price, #2 might be more attractive.
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Old 10-01-2004, 11:21 AM
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Here is a response from "Phil Nilsson of Nilsson Associates - Profit Building Ideas for Lawn & Landscape Professionals"

IMHO ... don't purchase either ... sales dollars per customer account is too low to make it worthwhile given other options "out there". That's a lot of "chasing around" for low gross sales.
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