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milo
02-06-2006, 02:26 PM
I Am Gonna Be Selling Alot Of My Business To Go Into Another Line Of Work. I Am In Allentown Pa Anyway, The Funny Thing Is What Are The Accounts Worth... Well I Have Had 2 Guys That Are Also On This Site Come Over To My House And They Are Like Well They Are Worth 4 To 6 Cuts And That Was It. They Read On Here Thats All Accounts Are Worth. So My Question To People Here That Hate The Lowballers And Say We Get No Respect Is. Why And How Could They Only Be Worth 4 To 6 Cuts?? People If We Want To Make Ourselfs Worth Something Why Do People On Here Say That??? Just Likw Read On Here You Would Be Better Off Hiring Someone Who Will Work For You And Run It Into The Ground And You Would Come Out Making Way More. This Is A Business Where It Is Really Easy To Start Up With Not Alot Of Money And So Many People Do. But If We Want It To Ever Be Worth Anything They Should Sell For A Nice $$$$ If We Sell. Look At Oil People. Gas Should Only Be Like $1.25 A Gallon But They Are Lining There Pockets Cause That Is What They Say Gas It Worth

milo
02-06-2006, 02:33 PM
Ok People Here Is A Example::::: A Guy Is Selling A Business, He Is Selling A 6 1/2 By 12 Trailer A Exmark Lazer Z 25hp 60inch With 100 Hours On It, Craftsman Push Mower, Echo Trimmer Echo Blower, And 20 Accounts That Are $25.00 A Cut... Ok Poeple Please Tell Me What This Is Worth In Your Opinon... I Just Want To See How Close We Are All And Look At It To Ways A Price You Would Want For This If It Were Yours And A Price You Would Pay For It If You Were Buying It.. Please Post Opinon's

tjcezar
02-06-2006, 02:37 PM
Where are most of your accounts and are they comm or residential? Are you selling contracted customers? I would say it depends on the type, size, length of time of these customers were with you, etc.. I am in the Reading area so I could be interested in these accounts. What did you think they were worth?

tjcezar
02-06-2006, 02:41 PM
Many people think they can sell their accounts without contracts, which you can but anyone buying that business is taking a big chance so I would pay very little. Now if I was buying a business that had customers on 3 year contracts that would be worth some $$ cause it is gauranteed.

impactlandscaping
02-06-2006, 02:44 PM
Milo, Unfortunately , most people don't value lawn mowing only contracts at any value. It's the 3-4 year multi item, full service accounts that add $$ to a resale value of a business. Years ago, a local kid going to college called me, and wanted to sell me his business..30 nice accounts, and one old Snapper walk Behind..that's it. He said to make an offer, so I did. I offered him $4K for everything..He wanted $30K, so no deal. There's nothing saying that the residential clients will or won't stay after the sale, either. Unless you have signed multi year contracts, and do personal introductions with the existing clients with the new account owners, there really is no value other than the equpiment. In the above case, I would say it would be worth around $ 9-10K on the high side. That's about $8k for equipment and $ 2K for accounts.And somewhere around $7-9K on the low side. This is just my opinion, and not a professional evaluation of the sale of your business, just what I feel it would be worht to me in my area.

milo
02-06-2006, 02:46 PM
I Will Sell Like 30 Accounts I Have Plus Whatever Equipment Someone Needs. I Am Gonna Keep Like 30 Accounts For Myself To Do For Extra Money. I Was Trying To Sell A 6 1/2 By 14 Trailer 2005, And Like 15 Accounts And Would Only By Charging For The One Commercial Account And Giving The 14 With That And I Wanted To Sell That For $5000.00. You Could Recover That Just From The One Commercial Account One A Season. And None Have Contracts Buy Have Been Cutting Them For 4 To 8 Years Now

milo
02-06-2006, 02:52 PM
Also Yes If I Sell I Am Willing To Work With The New Owner A Week Or 2 To Help Him Meet All The People And Tell Them I Am Selling Out. All The Accounts I Sell Will Not Be Lost If The New Owner Is Doing A Good Job And There Once A Week Or When Needed.

grass_cuttin_fool
02-06-2006, 02:57 PM
I saw a thread today and they were saying 2 cuts on each property and thats it. Its hard to spend alot of money and not knowing what the customer will do. Personally I think they are worth more than 4-6 cuts, but I understand where CJ and Impact are coming from with no contract and no quarentee

wayne

tjcezar
02-06-2006, 03:04 PM
quick example. A friend of mine bought a runnng business for $50000. Had a great customer base, etc. Couple months later business died off and come to find out the guy he bought it from was just running the same business from his house and actually keeping his customers cause they were originally loyal to him and were his contacts. Honestly with out contracts and especially in this case it is very scary. I am not saying you would be dishonest but what keeps the customers after they are bought?

all ferris
02-06-2006, 03:05 PM
milo, what do you think the value of an account is?

milo
02-06-2006, 03:09 PM
yes i could see what people think about where the accounts stand when they come in. but in the deal i will make i will take the guy out to meet all the people, work for him a week or 2. tell all accounts whats going on and ensure them there will be no way they would loose this account unless it is there oun fault. meaning they dont come for a few weeks or do a real crappy job. i could guarntee that with my accounts. i would also sign a agreement that the accounts will not go anywhere on them for a year unless that are responsable cause of bad work. that is how sure i am all my accounts will hold up to new person doing them. if they were to loose one for other than doing a bad job a would give refund back for that account -$$ what they made if there. now how is that for buying accounts?????????????????????????

milo
02-06-2006, 03:12 PM
milo, what do you think the value of an account is?
well to what i posted the 20 accounts at $25.00 a cut and equipment. i would say if i were to buy it. $11000.00 selling it $13000.00

Cornwell
02-06-2006, 03:20 PM
I'm in FL and the biggest rule of thumb is to sell your business for what you can make in a year. My first part time business made 10k per year so that's what I sold it for. All equipment minus the truck. The equipment was only worth maybe $3500 and I didn't have a large business. You have to find the right buyer for your business. If you cannot sell a business for at least what you make per year than that industry or business is not even worth being in.

tjcezar
02-06-2006, 03:20 PM
That definately sounds like you are honest and truly want to sell the accounts. I would say generally from what I have seen and heard over the years is you would be looking at approx a years worth of income for a sales price. Now that would be for contracts so I would say considerably less without contracts. Just say $500 week @ 20 weeks (?) = $10000 w/contracts. maybe $5000 w/o. hard to say. if your a good sales you may get the $10000

Envy Lawn Service
02-06-2006, 03:28 PM
.... oh but all these other guys are going to sell their business and retire early....

YEAH RIGHT!


This is why I said in the other thread that it is much more lucrative to just hire to replace yourself inside your business and walk away from all responsibility except keeping tabs and collecting a paycheck.... IF YOUR BUSINESS CAN AFFORD TO REPLACE YOU.

A green industry business just has a low marketable value. So sometimes you can sell at a good profit. But the key to making any real money on a sale is to really be worth something and attract the right buyer who sees your business as worth a large amount to him. This is a true case in which the worth is only in the eye of the buyer.

I hope people wise up and make some other retirement plans... Like making enough now and putting enough away that little of this matters down the road.

Envy Lawn Service
02-06-2006, 04:06 PM
well to what i posted the 20 accounts at $25.00 a cut and equipment. i would say if i were to buy it. $11000.00 selling it $13000.00

OK Milo, no here I'm giving it to you straight (with some inside info) as if I were really interested. This is how I look to handle a buyout....

I want to schedule a meeting with you.
I expect to get aquainted with you and your equipment.
Then I expect you to taxi me along the route to all 20.
I want to make small talk, figure out what kind of business man you are between stops.
I want to look at every account physically.
Then I expect you to provide me a bunch of documentation of each one.
I want to know who the customer is, what they are like, how long they have been with you.
I want to see aged documentation of how long the job takes.
I want to know what services are involved.
On to the next, on to the next.

Then I want to come sit with you in your office and I want to see copies of the contracts, ect. Then I'm going to want to see some Schedule C's. Then I'm going back to my office to evaluate all 20 and the overall picture. I'm going to run your numbers and time through my business. This way I'm able to evaluate what the back end profit looks like for me verses what the profit is looking like for you.

At some point I would meet back with you and offer you a percentage of your 'contract net profit' on each of the accounts I want out of the 20. Add it all up and submit a total offer. Then in order to seal the deal, you, I and all 20 customers would meet to sign contract transfers.... and we would finish at my attorneys office with all the rest of the paperwork, including an enforcable non-compete contract.

But in any event, this whole process is how I would go about evaluating what your business is worth to me. Obviously, my offer would offend you because it sounds like you want somewhere around GROSS plus the equipment. Nothing wrong with you feeling that is what it is worth to you at all. But to me, I only base the worth on what the bottom line will be worth to me in the aquisition.

Marek
02-06-2006, 04:13 PM
Most little mow and blows arent really worth much to anyone except the owner/operator.Now if someone has a company name and esablished reputation and phone # that brings alot more to the table.To me , I dont care if your doing 85k or 600k , its how much profit you can pull out of the gross.The owners actual draw will give you a much better idea of what the company is worth. If you are doing 600k a year and only pulling 30k out of it then there is something wrong.There are alot of veriables to concider as a buyer or a seller.But both must be honest and realistic.

milo
02-06-2006, 07:23 PM
no this is a job or being a lco with no future. yes running your own lawn service is great working when you want to and having off when needed but in terms of everything else is just plain out sucks. i had a close friend ask me if it was worth it to start a business and 2 years ago i told him yes. well now i would tell anyone thinking about starting there own lawn service not to.
owning own business = no benefits, retirement, sick days, paid vacation and when you got to buy new equipment (and you will have to) and fix your stuff that is out of your pocket
i do love being outside and working for myself but if you ever want to make any real money dont come into this business.
this business is great for a college kid or a retired guy that needs to get out of the house.. after doing taxes this year and seeing what i am paying out in new equipment, parts, labor (i do it myself) and price to operate gas, advertize, it is just better to do 4 or 5 lawns a day at $25.00 to $30.00 a day. work 2 or 3 hours and thats it.
AND THE REASON FOR THIS IS SIMPLE.. EVERY NEW JOB YOU GO TO YOU GOT TO BID VERY LOW TO GET IT AND IF YOU DONT, YOU WONT GET THE JOB AND YOU PORBALLY WOULD NOT WANT IT FOR WHAT YOU BID EITHER. THIS IS A JOKE ANYMORE AND IT WILL BE LIKE THIS FOREVER.
IF ANY OF YOU KNOW YOU COULD GET GAS .10 CHEAPER DOWN THE STREET YOU GO THERE DONT YOU? WELL IT IS JUST AT THAT POINT NOW A NEW GUY COMES IN WITH NO EQUIPMENT BUT A TRUCK AND PUSH MOWER. BIDS $20.00 ON A $45.00 JOB (WHO WOULD YOU HIRE) AND THEN WHEN THAT GUY DONT SHOW UP AND HE DOES HIRE YOU HE TELLS YOU HE WILL NOT PAY YOU $45.00 CAUSE YOU WERE THERE 20 MINUTES WHEN THE OTHER GUY WAS THERE 2 HOURS AND DID IT FOR $20.00 THEN HE ASKS WHY, LOOK AT MY EQUIPMENT THERE. SEE THE NICE BIG MOWER, YEA THAT ONLY COSTS $7000.00 :mad:

Billz
02-06-2006, 07:55 PM
Well, if it is that crappy, why would you think someone would give you alot of money for them? Without contracts you will have to find someone outside the business to try to sell them to, because most in it realize the mow only customers are not that valuable. that being said, if it costs me $100 to gain a new bustomer through marketing, etc, I guess I wouldn't be against buying accounts for that amount from someone, but not for more than my costs.

Envy Lawn Service
02-06-2006, 07:58 PM
On a lighter note... forget I brought up the Schedule C :blush:

Well, atleast you pay taxes. If some of the others around you did they would know they are going broke also. But no doubt about it, what you are saying is true in many areas. It's a market pressure thing more than anything. I've always said that being in a place where it is easy to succeed and having good luck is the majority of the battle.

See, many people from here and many here locally around me think I am crazy. But I don't care. I look at a job and I quote a price where I know I am going to make good money. If they decline, that is fine. This is hot, hard, nasty work. If' I'm gonna go broke, I can do that sitting at home lounging in the AC. Saves wear and tear on me and my stuff. Plus I'm not out there spending, I'm at home saving, so it will take me longer to go broke.

These guys who are out there just trying to stay busy are going a little farther in the hole on every yard. Myself, I'll do only the ones that pay me a good profit after my expenses. I don't do lawn work because I have to. I do it because I want to. So you can bet your arse I'm not breaking a sweat for chump change.

If this practice leaves me short on work, then I'm just short on work. I'd rather work short hours and be profitable less hours that I would to be busy all the time and be less profitable or broke. Plus, whatever open time I have left is not sold for nothing. That time is still open to take on whatever opportunity might come my way. At least I still have a fighting chance.

For me now, it is a constant war to keep a good schedule of work, I mean a blood bath. But I turn a good profit on everything I do, otherwise the lowballer is wasting his time on it. For 2006 I hope to run a good full time mowing schedule, but I will not cut my margins to make it happen. So if it doesn't I'll use the gap in scheduling to look for other profitable opportunities.

milo
02-06-2006, 08:17 PM
envy you are right, i thought that is what this was about when i started. 20 minute job is like 25 to 30 bucks. i only want to do jobs that you get paid great in. i am juck sick or everybody i am gonna give prices to soon saying well i had a guy here that will do it for $20.00 and i said $45.00.. and yes i have alot of extra equipment as backups and 2 nice big ztr riders less than 1 year old and every year i replace trimmers and blowers but it is the bigger you get you make less money profit.. yes people profit there is a big difference when you say to yourseld after cutting 14 lawns and working 7 hours saying wow i did $400.00 today.. no not after gas, lunch, wear on equipment and some people will say well you still made like $300.00 for the day. well maybe sometimes. it all adds up and then if you do have a new ztr, what are the payments on that every month??? this business is not all that anymore. the bast way to do it is with 1 truck, a 36inch walk behind, trimmer, blower and 4 lawns a day.. that is the best way. till it all works out the guy with the 36 inch and truck is making more than the guy pulling a 14 foot trailer, 2 ztr 2 blowers and 2 trimmers and a worker.. and that is the truth

all ferris
02-06-2006, 08:20 PM
Milo, in another thread you mention that with the cost of your equipment and fuel you are not making and money. So why on earth would someone want to give you your asking price?
http://www.lawnsite.com/showthread.php?t=132146&page=2

milo
02-06-2006, 08:30 PM
so i can pay off my house and retire

all ferris
02-06-2006, 08:33 PM
so i can pay off my house and retire

And so do I.

6'7 330
02-06-2006, 08:34 PM
.... oh but all these other guys are going to sell their business and retire early....

YEAH RIGHT!


This is why I said in the other thread that it is much more lucrative to just hire to replace yourself inside your business and walk away from all responsibility except keeping tabs and collecting a paycheck.... IF YOUR BUSINESS CAN AFFORD TO REPLACE YOU.

.


You bet ya, I'm retireing from this business in 5 years, and if family does'nt come in to take over , I will sell the business at a good profit.

That said we have a lot of business assets,building's, land, capital asset's, account types that are assets, not a list of residentual accounts, that make a resale possible.If family does'nt come in, or in incapibale of taking over,it is easier for me to sell out.I have irons in many different fires, by the time i get out it will be thirty years.I have great employee's but I am the company, and it ain't just going to run itself, and I want out to pursue other endeavors.


I'm will be retireing from this business with my retirement fully funded, to pursue those endeavors, and enjoy life with my wife a whole lot more.

adamholz17
02-06-2006, 08:42 PM
I see a lot of people on here talking about how equipment makes the company. That may be true in a lot of instances, but for the emerging generation, it may not be. You do see a lot of people out there with a truck, trailor, and a mower. They are making some good money, but it is because they have probably bought things cheap. Look at it like this:

Instance 1:
a used 1990 chevy - 4000
a 36 inch walk behind - 1500
used ghetto trailor - 400
cheap weedwacker - 75
a used 21 inch push - 50 bucks

all in all they have around 6000 in expenses, and they go out and work in off in little time, and can begin to profit in a shorter amount of time. Might break down a little bit more, but can be fixed with minor repairs most times. This is assuming the person put some time and effort in finding good quality used equipment.

Instance 2 -

new truck - 20,000
new trailor - 150
2 new weedwackers - 400
2 new ztr's - 14,000
2 new 21 push's - 1100
misc blowers, stick edgers, tools - ?

Here you can have 40,000 wrapped in luxury items. Not to say some things arn't essential, but some things are just luxury items. You are riding your mower, when Joe Blow is walking behind his. You get done sooner, but her makes more.

It all comes down to working smart for the future, and keeping costs low, and knowin when to spend the extra money on luxury items to get you to the next job faster and when to work harder to make more.

Jpocket
02-06-2006, 09:19 PM
I'd give you $8,000. Personally I could get 30 accounts and put together a mower and buy a trailer for $2,000. But of cousre it wouldn't be a new trailer or a Lazer with 100hrs. either.

tjcezar
02-06-2006, 10:26 PM
If you have two mowers they both need to be running making $$$$$$. There is money to be made the trick is working efficiently. No doubt there are lowballers but it is up to you to figure out a strategy to avoid the jobs that attract the lowballers or to find the customers that are willing to pay. Don't forget this is business and needs to be treated that way. Sometimes guys forget that and think they just need to operate mowers and collect the money and they will always lose in the end. If you have your own LCO be a business man not just a mower operator and you probably won't get so frustrated.

Envy Lawn Service
02-06-2006, 10:34 PM
If you have two mowers they both need to be running making $$$$$$. There is money to be made the trick is working efficiently. No doubt there are lowballers but it is up to you to figure out a strategy to avoid the jobs that attract the lowballers or to find the customers that are willing to pay. Don't forget this is business and needs to be treated that way. Sometimes guys forget that and think they just need to operate mowers and collect the money and they will always lose in the end. If you have your own LCO be a business man not just a mower operator and you probably won't get so frustrated.

That is some sound advice and part of a strategy I have been working for years. The trouble is, the lowballers keep growing in numbers every year, and every year the infiltrate into another corner of my market. Basically the new influx each spring outnumbers those who went belly up.

So I find that is good advice, but not always a solution.
Small, large, residential, commercial, high end, low end... they are almost everywhere.

milo
02-06-2006, 11:24 PM
That is some sound advice and part of a strategy I have been working for years. The trouble is, the lowballers keep growing in numbers every year, and every year the infiltrate into another corner of my market. Basically the new influx each spring outnumbers those who went belly up.

So I find that is good advice, but not always a solution.
Small, large, residential, commercial, high end, low end... they are almost everywhere.
envy is right. every year where i am at new people with nothing out trying to make it. and what they do to get work is do it for the lowest amount just to be working... people did you hear ford is letting go of 30,000 employees?? the job market these days is not good. now how many ex ford employees will not find work soon? and spring is right around the corner. more part time guys with a 21 inch mower. and not only that but how bout people going out after there normal jobs cutting grass to make a few more bucks. people not in this business are looked down upon. also my point was how to figure what our business is worth and so far from almost all guys on here they are not willing to put out any money for a operating business and all that is saying is that we are all cutting our through.. people if you think you will be doing this till your 60 and maybe you will be wouldent you like to know that on something you worked at so long is worth something??? well most people on here think no. so remember that when you think of selling out. dont expect to see a penny for what you did all your life and i hope that makes you people feel good.

milo
02-06-2006, 11:50 PM
so to all people when you sell out and most will sometime unless they plan to go under sometime.. remember that if you have 50 accounts that you have been cutting for 5 to 20 years remember to only sell your trailer for $1500.00 your ztr with 800 hours for $4000.00 walk behind for $1000.00 blowers and trimmers for $500.00 and all your accounts for $5.00 each.. so for a total of 20 years of your work $7250.00 then pat yourself on the back when the people who come to talk about buying it well it says on lawnsite.com that, that is all accounts are worth. cause accounts are not worth much, only your equipment.
if there were people who did not lowball on here and wanted to make the lawn business more of a real business they would say accounts are worth more than 1 month cut. remember only way you make money is with accounts. you could have all new mowers sitting in your garage all clean but with no accounts you get no money.
people this is your business, you are saying that accounts are worth nothing, well that just goes to show you that this business has no future
i think a fair price in this game would be 1 season worth of cuts. and yes a defalut in there if a account does not keep the new owner unless it was there fault for bad work or not coming.
people put some thought into what you do. dont think cause you got a real business name and a few mowers you are the man cause it is worth nothing.. wow people. open your eyes, this is why this lawn business will get no better.

JD GROUND SERVICE LLC
02-07-2006, 12:15 AM
I would look at each account at a 6 cut min , so 150.oo each plus whatever you equiptment might be worth. Thats what I was told by a guy who owns a very big company here in Missouri. Good luck. Most of your bigger guys dont want your equiptment anyway, just contracted accounts.

Envy Lawn Service
02-07-2006, 12:21 AM
Believe me Milo, I understand what you are saying and it is sad.

However, like it or not, this business is a labor income business, not a passive income business. So the accounts generally have a very low equitable value and they are only worth something to the buyer who percieves the value.

Since it is that way, a guy like myself has to look at what you have for sale and determine both the profit margin on the contract and the labor intensity involved in generating that profit.

So with that in mind, an account without a good tight binding contract is basically worthless. All you are selling basically is a lead. Likewise, a 1 year contract on a $20-$30 residential lawn is not worth a lot more. The buyer is looking at it as a 20-30 minute job for $20-$30 and only part of that is profit. So to make it easy, lets say it's $10 profit a week, times what in your area? 24-28? Going big, that's what? $280 a YEAR profit?

The thing is, how much can you really expect a guy to spend on the account in order to make that $280/yr profit? If the contract is only one year, there is no comfort that it will be there to produce any more profit beyond the $280...

So how much of that $280 can the buyer afford to spend buying it from you and still have good numbers? This is just not an attractive opportunity to a buyer. A percentage of that $280 is about all he can go on it and still have any sort of lucrative guarantee.

To get any money for an account, it's gotta be a solid one. Well documented, high volume, high profit, long term contract... ect. What it comes down to is that for a lawn business to be worth any serious money, it needs to be a little bigger operation that someone is coming in to buy as a take-over. Lock stock and barrel. Employees and all.... long term accounts, long term contracts, equipment, impressive numbers, solid reputation, phone ringing off the hook... and preferably self suffcient in operation or close to it.

Either that or you have to have a sweet little niche company with most of the qualities above, that someone can buy and man very easily.

lawnman_scott
02-07-2006, 12:33 AM
I think what brings down the value is the small number of accounts. It isnt like you can start a business on 15-20 accounts. It may be ok for someone looking for a few accounts, but trying to sell it as a package deal with equipment like its a turn key business is absurd. Now if it was 80,100, or 130 accounts with the equipment, then you are talking about something that has some type of value. With a well worded newspaper advertisment at the right time of year you can pick up 15 accounts in a week. I get that many calls in a week in summer out of the yellow pages.

impactlandscaping
02-07-2006, 03:08 AM
The big misconception I see with this whole thread is relying on a certain number of accounts to sell to "retire" on.We have some really great full service accounts that generate a great bottom line. Would I hope they are still on board in ten years?..., yes. But, even with the best of equipment and solid 3 year plus full service accounts, you are still limited to a potential buyer's figures on his ROI in your company. As Envy said, you can only get what the buyer feels is an acceptable profit on the contracts. Property and real estate are what makes a business hold more value on the open market. You have more leverage as a seller with those types of accounts than with mow and go's. I invest my money and use it to leverage my future. I hope to turn my company over to my brother and employees in ten years, and draw a percentage with no active involvement. It will be a nice income, but not enough to live comfortably on.That is what the mutual funds, cds, and property investments are for. For you solo guys and newbs, I offer one pearl of wisdom: Open an individual retirement account and secure some money for your future. You don't have to be a market whiz to invest in the market either. A few minutes with a professional broker can put you on the right track.Live realistically, and keep your eye on the prize.

6'7 330
02-07-2006, 03:30 AM
. Property and real estate are what makes a business hold more value on the open market. You have more leverage as a seller with those types of accounts than with mow and go's. I invest my money and use it to leverage my future. I hope to turn my company over to my brother and employees in ten years, and draw a percentage with no active involvement. It will be a nice income, but not enough to live comfortably on.That is what the mutual funds, cds, and property investments are for. For you solo guys and newbs, I offer one pearl of wisdom: Open an individual retirement account and secure some money for your future. You don't have to be a market whiz to invest in the market either. A few minutes with a professional broker can put you on the right track.Live realistically, and keep your eye on the prize.

You got it right Bill,and just makeing profit off selling the business is not what has my retirement fully funded .All the investment's I made over the years, market, real estate, and other business endeavors outside landscaping.I would like for my company to go on being run by my nephew,and If he comes in the business and that becomes a reailty,the company will go on and be his, with me getting just a piece of the action.If not it won't just run itself,as I said I have some good employees, But I the company.

milo
02-10-2006, 01:30 PM
well just to let everybody know i did sell 15 accounts that have no contract and a 48 inch walk behind and gave the guy a blower and trimmer for $9500.00 equipment was worth the most $2000.00 rest for accounts. i took hime to meet everyone and they told him they will stay and i told him anytime this season a account leaves you i will give you some money back. he is just getting into the business and his biggest concern was customers so i got about 16 cuts per account.. so to all the lowballers give me a call if you are selling your accounts i will buy them for there 4 cut price like you said and resale them for 16 cut value.
also people do you know gas does not have to cost what they are charging for it. we buy it cause we need it and pay that for it cause that is what they say it is worth. if people on here would wise up and set a standard accounts would be worth something. here in PA you cut for like 7 months out of the year so charging for 3 1/2 months of cutting seems like a really fair price.
people set a standard. remember one day you might want to sell some of your business or the whole thing.

Envy Lawn Service
02-10-2006, 02:01 PM
Well looky there.... you found an idiot.
It's not hard though... a swarm of idiots enter this business every day.
You just happened to catch one on day one.

I hope you feel good about yourself screwing someone that way.
This guy get's to go in the hole on what you sold him.
You better hope he can't find some other way to survive.
Otherwise you'll have yourself a business enemy for life now.

I wouldn't be surprised if he starts to vandalize you in a few months when he realizes you to advantage of him just starting out. When it happens, I'm not sure I'll blame him.

K.Carothers
02-10-2006, 02:10 PM
Well looky there.... you found an idiot.
It's not hard though... a swarm of idiots enter this business every day.
You just happened to catch one on day one.

I hope you feel good about yourself screwing someone that way.
This guy get's to go in the hole on what you sold him.
You better hope he can't find some other way to survive.
Otherwise you'll have yourself a business enemy for life now.

I wouldn't be surprised if he starts to vandalize you in a few months when he realizes you to advantage of him just starting out. When it happens, I'm not sure I'll blame him.

I don't think that's fair to say. Not everyone can go out and get customers. Some people are willing to pay for a "business". $7500 is not a lot to some. And I'm sure that milo is a good salesman. It's all in the eye of the beholder. I actually think milo may have screwed himself by offering to give back money if the customers quit. Think about it, he sold to a new guy with no contracts on accounts. Do you think this new guy can deliver top quality service? Of course not, at least not right out of the gate. It takes time to cut grass right, giving a finished manicured look week after week. How long do you think those 15 customers will give a newbie that's destroying their lawns? 2 or 3 cuts? Just my opinion

kc

Envy Lawn Service
02-10-2006, 04:02 PM
How do you figure that's not fair to say?

He sold his block of business to the new guy for near what it GROSSES a year.
Being a new guy though, he doesn't realize this because there was equipment involved in the deal.

If all 15 customers paid the guy up front right now for the whole year, he would still be somewhere between in the hole and 1K in the black. Then the guys has to pay all the expenses involved with cutting these lawns to boot. It will take a couple of years of this to break even on this block of business. Poor him....

nobagger
02-10-2006, 05:35 PM
Also Yes If I Sell I Am Willing To Work With The New Owner A Week Or 2 To Help Him Meet All The People And Tell Them I Am Selling Out. All The Accounts I Sell Will Not Be Lost If The New Owner Is Doing A Good Job And There Once A Week Or When Needed.
Now how in the hell can you say that:confused: You have no idea if and what these customers are going to do period. Maybe they were thinking of getting out with you anyway and now is the perfect time to do so. So saying "yeah they all will stay with the new company" is just guessing.

milo
02-10-2006, 05:57 PM
envy i did not screw him. he got copies of schedule c's from 5 years he knew he was paying for 4 months of there grass cutting. so he will make 3 months profit this season. he also will get money back for any accounts he will loose over the season unless it is his fault. he did not get screwed. $9500.00 to start a business and get in the door is not bad at all.
envy i dont know what you are saying and it is people like you holding back the value of this business. mcdonalds near me are adding playgruonds to all of there buildings near me. indoor and BIG. now how much is that costing? and how many more burgers do they have to sell to make up for that playground?? i have learned a few things in my life from smart people and i will tell you all this (you dont work for your money, you make your money work for you).
and envy what did it cost you to start flat out in this business. i know when i started my used truck was $5000.00 36 inch walk behind was $2400.00 trailer was $1000.00 trimmer and blower $350.00 hedge trimmer $400.00 and that was with no accounts. $9150.00.. and that is for no add in the papers or phone book that was more yet. now this guy is in with good accounts and has a piece of mind knowing that he has work and not struggling and lowballing to get in the door. he has a truck and is buying a used trailer for $800.00 so in my book this guy is starting out very well.
to the person that asked how can i work with him for a week or 2. why cant i??? it is one days work 15 lawns..
people please get back to me on what you people paid to start in this business.. all said and done i started probally right around $10,000.00 with adds and all.. and when i started i had 1 account for sure, it was a neighbor and if someone would have started me out where i started this guy out i would have got alot more sleep at night knowing i had work and good accounts with proof..

Envy Lawn Service
02-10-2006, 05:59 PM
Now how in the hell can you say that:confused: You have no idea if and what these customers are going to do period. Maybe they were thinking of getting out with you anyway and now is the perfect time to do so. So saying "yeah they all will stay with the new company" is just guessing.

That's right because....

well just to let everybody know i did sell 15 accounts that have no contract and a 48 inch walk behind and gave the guy a blower and trimmer for $9500.00 equipment was worth the most $2000.00 rest for accounts.

There was no transferrable value in the accounts because there was no IN-FORCE CONTRACT to transfer. So basically, this guy paid him $9,500 for a few pieces of used starter equipment and 15 LEADS!!!

All 15 could change their mind before season starts or any time thereafter.

The point is that the buyer got SHAFTED.
Even if they all stay, he still got SHAFTED on the price.

milo
02-10-2006, 06:00 PM
nobagger it is wrote up that if he looses any and he is not at fault. i will pay back for that account he lost.. so if he looses a account he will receive another one of equal value in the same area.

milo
02-10-2006, 06:02 PM
envy please tell me what it cost you to start? i started $10.000.00 in the hole with 1 $25.00 account.. and that was over 10 years ago

Envy Lawn Service
02-10-2006, 06:09 PM
envy i did not screw him. he got copies of schedule c's from 5 years he knew he was paying for 4 months of there grass cutting. so he will make 3 months profit this season.

If you really believe that, I suggest you call the guy back and ask him if he wants the rest...

There is NO PROFIT to be made off that block of business for at least 2 years, even if everything goes perfectly. If you can't see that... well then that's just SAD. He paid you $9,500 for the stuff and the block of business. Plus he will fork out thousands in expenses to service these accounts. It will be a good 2 years before he has a chance to see any real profit.

If you know what a Schedule C is, you know he will be filing a LOSS unless he is able to somehow retain enough other PROFITABLE lawn work to offset the LOSS on what he bought from you.

Envy Lawn Service
02-10-2006, 06:26 PM
envy please tell me what it cost you to start? i started $10.000.00 in the hole with 1 $25.00 account.. and that was over 10 years ago

Look Milo, man I'll tell you the straight up truth, and give you some firepower against me.... just to prove to you personally that I am not trying to outright single you out and pick a fight with you. Not trying to do that at all. Even though we have had our differences, I've enjoyed having you as a fellow member and we have agreed on some stuff even. So here you go....

The first time... It effectively cost me absolutely ZERO $0 in actual startup costs.
I was a kid and yeah I was a dang scrubby little one too.
Of course to begin with there was no insurances, bonds, fees, licenses, ect.
What little I had to work with was borrowed to begin with and that wasn't much.
I eventually replaced what I borrowed and bought my own stuff.
I grew from there, grew beyond just a lawn boy, and eventually sold out.

The second time.... It cost me all my setup fees. Filing, registration, licensing, bonds, insurances, ect. I had to re-do everything in order to start up and be legal again. I don't remember exactly what all that cost me. But that was it. I already had a couple of mowers and some other little stuff. I started small and worked my way up.

mslawn
02-10-2006, 06:42 PM
If the guy who bought the accounts was happy with the terms of the sale, then I see no one getting the shaft. Contracts or no contracts. It is now the purchasers shot to make go with it. If he loses the accounts due to poor performance it is his fault! He made the decision to purchase the accounts, he better be prepared to do what he needs to do to keep them. If I were to sell some accounts for some reason I personally would not guarantee money back if they lost one. Like the old phrase -SOLD AS IS - NO WARRANTY.
Milo did what goes on everyday- He had product(not much) and information, asked a specific price and someone took it. Who knows this guy may do such a good job and just take the rest of Milos accounts(I wonder if he got a non-compete agree). Only time will tell.

Precision
02-10-2006, 06:49 PM
Envy,

You are right. That guy shafted himself.

Just because Milo found a moron to pay his price does not make his accounts worth that.

He can feel good or he can feel bad, but the truth is he parted a fool from his money.

I bought a business with 20 accts with all the equipment for $10000. I sold the equipment for $7800 and some of it I used for a small period of time and / or used as back up. So my 20 accounts cost $2200. or just over $100 per acct. STUPID of me. But live and learn.

Of those 20 accts I have maybe 3 remaining 2 years later. I have been able to get some neighbors and use word of mouth to make it worthwhile. But my total gross of those 20 accts is in the neighborhood of $23,000 over 2 years.

Now you may think that is great, but what would the $2200 have gotten me if I had just spent it on advertising.

I can answer that. My ad in a local magazine got me $52000 in gross over the same time period and cost just over $2400.

You tell me which was the better and SURER investment of money.

For me it was the ad budget and always will be in the future barring a real company wanting to be bought out. Contracts, employees, systems and the like in place.

rodfather
02-10-2006, 06:55 PM
That's right because....



There was no transferrable value in the accounts because there was no IN-FORCE CONTRACT to transfer. So basically, this guy paid him $9,500 for a few pieces of used starter equipment and 15 LEADS!!!

what difference does it make? the contract now is null and void since there are new parties. secondly, who in their right mind is going to sign a contract/agreement that states something to the fact "in the event we decide to sell our business, you will be required and held personally accountable to use the new owner/service provider".

Helllooo

GrassBustersLawn
02-10-2006, 07:39 PM
no this is a job or being a lco with no future. yes running your own lawn service is great working when you want to and having off when needed but in terms of everything else is just plain out sucks. i had a close friend ask me if it was worth it to start a business and 2 years ago i told him yes. well now i would tell anyone thinking about starting there own lawn service not to.
owning own business = no benefits, retirement, sick days, paid vacation and when you got to buy new equipment (and you will have to) and fix your stuff that is out of your pocket
i do love being outside and working for myself but if you ever want to make any real money dont come into this business.
this business is great for a college kid or a retired guy that needs to get out of the house.. after doing taxes this year and seeing what i am paying out in new equipment, parts, labor (i do it myself) and price to operate gas, advertize, it is just better to do 4 or 5 lawns a day at $25.00 to $30.00 a day. work 2 or 3 hours and thats it.
AND THE REASON FOR THIS IS SIMPLE.. EVERY NEW JOB YOU GO TO YOU GOT TO BID VERY LOW TO GET IT AND IF YOU DONT, YOU WONT GET THE JOB AND YOU PORBALLY WOULD NOT WANT IT FOR WHAT YOU BID EITHER. THIS IS A JOKE ANYMORE AND IT WILL BE LIKE THIS FOREVER.
IF ANY OF YOU KNOW YOU COULD GET GAS .10 CHEAPER DOWN THE STREET YOU GO THERE DONT YOU? WELL IT IS JUST AT THAT POINT NOW A NEW GUY COMES IN WITH NO EQUIPMENT BUT A TRUCK AND PUSH MOWER. BIDS $20.00 ON A $45.00 JOB (WHO WOULD YOU HIRE) AND THEN WHEN THAT GUY DONT SHOW UP AND HE DOES HIRE YOU HE TELLS YOU HE WILL NOT PAY YOU $45.00 CAUSE YOU WERE THERE 20 MINUTES WHEN THE OTHER GUY WAS THERE 2 HOURS AND DID IT FOR $20.00 THEN HE ASKS WHY, LOOK AT MY EQUIPMENT THERE. SEE THE NICE BIG MOWER, YEA THAT ONLY COSTS $7000.00 :mad:

This post of yours pretty much answers your question!

If I were buying your business, I'd want to see your P&L. I'd also want to see these marvelous $25 properties. If it is a $25 job and you are not making any profit from it, THEN IT IS WORTHLESS!

All the rest of it is YOUR FAULT! YOU RUN YOUR BUSINESS, NOT THE CLIENT! You offer your services at a rate you can afford to live with, NOT WHAT THE CLIENT WANTS TO PAY YOU. Keep searching until you can find a client that is reasonable & you can make a profit on. No use in taking on business and not making money!

Also from your statements, I wouldn't buy from you if you are staying in business. I'd figure you are keeping the "CHERRY" clients and dumping your deadbeats and jobs you know you are losing money on!

20 jobs at $25 per is $500 a week. Assuming a 25 week year, that is $12,500 GROSS. Not enough to really effect a bottom line. I can gross !2,500 off 1 decent SMALL commercial client. Unless those 20 are next door to another of my current clients, they are of little use to me. And if you are not NETTING much, why should I pay you MORE than your NET for the honor of doing those yards????

As far as your equipment, your ztr might be worth $5k on a GENEROUS offer. (I've paid $3.6k for a 6 hour old ztr before.) The trailer, maybe $750. The push mower is WORTHLESS to me, as well as the small stuff.

Mike

premierlawncare
02-10-2006, 10:43 PM
Precision
LawnSite Bronze Member Join Date: Feb 2004
Location: Cocoa Florida
Posts: 1,955

Envy,

You are right. That guy shafted himself.

Just because Milo found a moron to pay his price does not make his accounts worth that.

He can feel good or he can feel bad, but the truth is he parted a fool from his money.

I bought a business with 20 accts with all the equipment for $10000. I sold the equipment for $7800 and some of it I used for a small period of time and / or used as back up. So my 20 accounts cost $2200. or just over $100 per acct. STUPID of me. But live and learn.

Of those 20 accts I have maybe 3 remaining 2 years later. I have been able to get some neighbors and use word of mouth to make it worthwhile. But my total gross of those 20 accts is in the neighborhood of $23,000 over 2 years.


Over 1000% Gross return in 2 years. Yeah thats a bad return.

premierlawncare
02-10-2006, 10:57 PM
Accounts are worth about the price it would take to replace them. Accounts are being purchased for INCOME. Everyone needs income. Alot of lawnguys who say accounts aren't worth anything are uninformed. I think alot of them started their business living at home with mom and dad. But here's the example. Guy leaves/get fired from his job, let's say fedex. Then he wants to start a LCO. He STILL needs income each month. So he can go hand out flyers all day and hope he builds up enough accounts this month so he doesn't have to use his savings as income or he could buy a business as a head start.

I don't understand why no one understands this concept.

When you buy a business you are buying hard assets (equipment) and goodwill. Goodwill is kinda like saying the accounts are serviced by premier lawn care and are happy and now they are being transfer to a new owner who will take very good care of those customers too. As long as the quality and reliablity is there then they will probably stay with the new business owner.

And marketing to get customers. Not everyone is well spoken and educated like precision lawn care. So lawn guys are quiet and don't know how to sell. How do they start a lawn company? Well they could buy one!

Here are links to companies for sale in my area.

http://www.sun-sentinel.com/classified/genmerch/results.classified?start_date=%3C+today&end_date=&class=300&keyword=lawn&type=boolean&days=7&date=all

Pool service businesses for sale
http://www.sun-sentinel.com/classified/genmerch/results.classified?start_date=%3C+today&end_date=&class=300&keyword=pool&type=boolean&days=7&date=all


This is my last post on this subject because most of the people here already know everything. They must by and sell lots of businesses and have tons of liquid cash available. payup

milo
02-11-2006, 12:12 AM
If the guy who bought the accounts was happy with the terms of the sale, then I see no one getting the shaft. Contracts or no contracts. It is now the purchasers shot to make go with it. If he loses the accounts due to poor performance it is his fault! He made the decision to purchase the accounts, he better be prepared to do what he needs to do to keep them. If I were to sell some accounts for some reason I personally would not guarantee money back if they lost one. Like the old phrase -SOLD AS IS - NO WARRANTY.
Milo did what goes on everyday- He had product(not much) and information, asked a specific price and someone took it. Who knows this guy may do such a good job and just take the rest of Milos accounts(I wonder if he got a non-compete agree). Only time will tell.
above thank you....

envy i like chatting with you to. but trust me i in no way rip people off i will bend over backwards for the guy who bought out some of my accounts. also i am the guy still cutting the same lawns for 10 years without making the price go up and no fule charge for the price of gas. i work very colsley with 3 guys in this field and one guy is very big and sometimes i cut lawns for him and he does landscaping for me and the other guy covers for me or i cover for him if we go away or something he a good friend to well both are. anyway my point in this whole discussion was to point out that we all start out somewhere in this business, we all did take jobs at a lower cost to get them. the bottom line on the jobs the guy got from me he will make net (with proof of my last 5 years if tax papers to prove it) is $5,300. so his gross sohuld be close to $16,000.00 i gave up these accounts cause they were a little farther than i like to go. 4 commercial jobs and 11 res. which is 4 togather and 4 more togather and 3 others the guy is coming over monday and i am gonna tell him about lawnsite.com and show him what people say and see how he feels. monday i am taking him to my insurance guy to get that started for him and take him for his papers to file his name. oh and also this guy is gonna do snow removal and that is work i dont do. he has a plow and and a snow blower so i told him he could do all my accounts that want snow removal to. so he is gonna make out there to. people trust me, this guy got a great deal. i have about 30 people who would like snow does but no man can do that by himself in a timley manner so he will do what he can.. funny thing is now that i sold this part and talking to my account, the taxes i am gonna have to pay on selling it will just end up killing my anyway. so i really hope the new guy does make it or we will both be at a loss lol

barefootlawns
02-11-2006, 12:20 AM
i agree with impact on this one

milo
02-11-2006, 12:31 AM
Accounts are worth about the price it would take to replace them. Accounts are being purchased for INCOME. Everyone needs income. Alot of lawnguys who say accounts aren't worth anything are uninformed. I think alot of them started their business living at home with mom and dad. But here's the example. Guy leaves/get fired from his job, let's say fedex. Then he wants to start a LCO. He STILL needs income each month. So he can go hand out flyers all day and hope he builds up enough accounts this month so he doesn't have to use his savings as income or he could buy a business as a head start.

I don't understand why no one understands this concept.

When you buy a business you are buying hard assets (equipment) and goodwill. Goodwill is kinda like saying the accounts are serviced by premier lawn care and are happy and now they are being transfer to a new owner who will take very good care of those customers too. As long as the quality and reliablity is there then they will probably stay with the new business owner.

And marketing to get customers. Not everyone is well spoken and educated like precision lawn care. So lawn guys are quiet and don't know how to sell. How do they start a lawn company? Well they could buy one!

Here are links to companies for sale in my area.

http://www.sun-sentinel.com/classified/genmerch/results.classified?start_date=%3C+today&end_date=&class=300&keyword=lawn&type=boolean&days=7&date=all

Pool service businesses for sale
http://www.sun-sentinel.com/classified/genmerch/results.classified?start_date=%3C+today&end_date=&class=300&keyword=pool&type=boolean&days=7&date=all


This is my last post on this subject because most of the people here already know everything. They must by and sell lots of businesses and have tons of liquid cash available. payup
thank you primier you are right. this guy now has a piece of mind and knows he will have a income.. i think alot of people in this business dont like to put out a penny for anything and the first guy i worked with was a prime example. hell the guy made his own sit on sulkey and it was sooooo dangerious and after all the time and steel he put into it he could have bought a new good one for $350.00 so he saved 100.00 or 150.00 for a death trap. this same guy would go into buy parts, i remember this one time so good, he goes into the dealer and says i need a brake band for one of my brakes on a gravely walk behind, the guy gets the part and rings him up, it was like 26.00 he said do you have them for a exmark? the guy says yes he says how much is it. it was like 1.00 cheaper but it was a little tighter so he bought the one for the exmark. funny thing was he thought he could make it fit, well after a whole day of cutting and him on the trailer trying to make it work he had to go to home depot for a longer bolt well the bolt cost him like .80 and it still did not work right. well in the long run a week later (down a machine) he welded it somehow that it did work (not that great) hey but he .20 and it only took him a week to pop on the wrong brake band lol..

Envy Lawn Service
02-11-2006, 02:02 AM
Envy,

You are right. That guy shafted himself.

Just because Milo found a moron to pay his price does not make his accounts worth that.

He can feel good or he can feel bad, but the truth is he parted a fool from his money.


Thanks, that puts what I've been saying into a nutshell prospective.

what difference does it make? the contract now is null and void since there are new parties. secondly, who in their right mind is going to sign a contract/agreement that states something to the fact "in the event we decide to sell our business, you will be required and held personally accountable to use the new owner/service provider".

Helllooo

Rod, the idea is that "IF" there are contracts in place, when a buyout occurs, it can be handled one of two ways... The buyer purchases the business 'as a whole' and therefore the buyer now owns the actual company the costomers are contracted with... as in if I came to you and bought Rod's Mow Blow and Snow in it's entirity, I would then own the company your customers are contracted with, and therefore own the contracts by transfer of ownership.

The second way, like Milo is doing, selling the culls only... if a contract were in place, both Milo and the buyer would meet with every customer and transfer the contracts... void Milo's contract and put the buyers contract 'in-force' in leu of Milo's, whereas everyone signs off on the transfer.

envy i like chatting with you to. but trust me i in no way rip people off i will bend over backwards for the guy who bought out some of my accounts. also i am the guy still cutting the same lawns for 10 years without making the price go up and no fule charge for the price of gas. i work very colsley with 3 guys in this field and one guy is very big and sometimes i cut lawns for him and he does landscaping for me and the other guy covers for me or i cover for him if we go away or something he a good friend to well both are. anyway my point in this whole discussion was to point out that we all start out somewhere in this business, we all did take jobs at a lower cost to get them. the bottom line on the jobs the guy got from me he will make net (with proof of my last 5 years if tax papers to prove it) is $5,300. so his gross sohuld be close to $16,000.00 i gave up these accounts cause they were a little farther than i like to go. 4 commercial jobs and 11 res. which is 4 togather and 4 more togather and 3 others the guy is coming over monday and i am gonna tell him about lawnsite.com and show him what people say and see how he feels. monday i am taking him to my insurance guy to get that started for him and take him for his papers to file his name. oh and also this guy is gonna do snow removal and that is work i dont do. he has a plow and and a snow blower so i told him he could do all my accounts that want snow removal to. so he is gonna make out there to. people trust me, this guy got a great deal. i have about 30 people who would like snow does but no man can do that by himself in a timley manner so he will do what he can.. funny thing is now that i sold this part and talking to my account, the taxes i am gonna have to pay on selling it will just end up killing my anyway. so i really hope the new guy does make it or we will both be at a loss lol

Going from the BOLD I was actually not far off at all on my projections.
I say that having honestly figured it as follows based on the info provided...

$20-$25 lawns
Maybe 28 cuts in a good year
15 lawns sold

$25 x 15 = $375 weekly
$375 x 28 = $10,500 a year
$10,500 - $9,500 = $1,000 Gross difference

I was off by $5,500 on the Gross, but honestly hoped you might NET better.
So I was almost DEAD ON with the NET.

Now here is how it works out in reality if everyone stays the duration

-$9,500 (I)

+$16,000 (G) - $10,700 (E) = +$5,300 (P)

-$9,500 (I) + -$10,700 (E) = -$20,200 (I/E)

-$9,500 (I) + +$5,300 (p) = -$4,200 Year Ending Loss (REAL)

Basically he will invest and expend $20,200 to make $16,000 and fall -$4,200 in the hole.

In 2007 he will repeat this trend

-$4,200 (L)

+$16,000 (G) - $10,700 (E) = +$5,300 (P)

-$4,200 (L) + -$10,700 (E) = -$14,900 (L/E)

-$4,200 (L) + +$5,300 (P) = +$1,100 Year End Profit (REAL)

As I said, 2 years minimum to dig himself out of the hole he purchased.
Yeah he will Gross $32,000 over two seasons if everything goes perfect.
But $1,100 is not much PROFIT for two years of labor.
Subtract wear/tear/replacement on the used equipment and the service truck...
Well he's still in the HOLE!

Envy Lawn Service
02-11-2006, 02:13 AM
Now... those of you who want to argue the financing and INCOME angle...
Please don't....

I shouldn't have to hold a class on the difference between income and profit.

You should be able to comprehend post #57 and understand what the REAL's are.
REAL Loss & REAL Profit.

milo
02-11-2006, 03:08 AM
ok i am done with this. in all truth he is gonna work for me and pay me just to hang out with me everyday. after work he will wash all my equipment and clean my house. he is gonna do all that and give me $600.00 a week thats right hes paying me to work for me. after the first year he will buy me a new ztr of my choice and he also told me he would dig me a hole in my backyard with one spaded shovel till midnight everynight till it is done so he can bring in cement and make me a inground pool oh wait he is out there now i am gonna go say hi to him

Envy Lawn Service
02-11-2006, 03:23 AM
OK... let me know when you get through with him and I will send a crisp 3 dollar bill for you and a bus ticket to send him down here to me.

Train him good and I'll give him a whole business to run for me.
I'll let him wash the stuff when he's finished too.
I don't need a pool though.
So I'll have to find something else for him to do until midnight.
Hummm.......

LwnmwrMan22
02-11-2006, 03:55 AM
Milo -

I know you're done with this thread.....

but why is it, every thread you have, you try to argue, and when you realize you cannot make a fair point, you come back with a post saying "in all truth, yada, yada, yada"?

Just like in the "only way to make money in this business" thread, the last post was all about you complaining because you didn't make any money because you had a drought.

http://www.lawnsite.com/showthread.php?t=132233&page=2 (last post)

Now did you tell the new guy that if he has a drought that he's not making any money??

Wait, did you tell your employee???

Now that he's an employee, and since you didn't make any money working the deal yourself, where are you going to get the money to pay the work comp, FICA, social security, unemployment, etc???

GrassBustersLawn
02-11-2006, 10:31 AM
Over 1000% Gross return in 2 years. Yeah thats a bad return.

It AMAZES me that people JUST DON'T GET IT. GROSS doesn't mean anything! Look at the companies that are GROSSING huge $$$ but are laying off people and closing plants because they are LOSING $$$ on that huge GROSS. Ford & GM come to mind.

NET is the deal!!!!! If you have 1000 accounts at $50 each you GROSS $50k x # of weeks...say 25...that is $1.25 million a year...but if you NET $0 on $1.25 mil then what good is it!

Mike

milo
02-11-2006, 11:40 AM
Milo -

I know you're done with this thread.....

but why is it, every thread you have, you try to argue, and when you realize you cannot make a fair point, you come back with a post saying "in all truth, yada, yada, yada"?

Just like in the "only way to make money in this business" thread, the last post was all about you complaining because you didn't make any money because you had a drought.

http://www.lawnsite.com/showthread.php?t=132233&page=2 (last post)

Now did you tell the new guy that if he has a drought that he's not making any money??

Wait, did you tell your employee???

Now that he's an employee, and since you didn't make any money working the deal yourself, where are you going to get the money to pay the work comp, FICA, social security, unemployment, etc???
i do it so people like you can pick on me.. like i said he is paying to work for me

milo
02-11-2006, 11:42 AM
OK... let me know when you get through with him and I will send a crisp 3 dollar bill for you and a bus ticket to send him down here to me.

Train him good and I'll give him a whole business to run for me.
I'll let him wash the stuff when he's finished too.
I don't need a pool though.
So I'll have to find something else for him to do until midnight.
Hummm.......
no envy he is all mine. you dont give away a guy like this lol

LwnmwrMan22
02-11-2006, 11:45 AM
i do it so people like you can pick on me.. like i said he is paying to work for me


Like I said, since you don't have the money to pay for gas, where are you going to find the money to cover all the employee expenses now that you have an employee?

milo
02-11-2006, 04:40 PM
like i said, the guy i sold my business to came over today and washed my car and gave me $50.00 to do it. i have a sugar daddy now. he told me he is gonna sell his house to pay me. just cause he feels cool to know me... here new trend..
i sold my business for $100.00 but is was a new $100.00 bill and it is a nice one. i think i got the better of the deal cause one of my ztr's is 5 years old now and needs blades.
to break it down,, i gave hime 45 accounts free 2 ztr's one needs new blades and other need a oil change (so jokes on him) and 3 year oil enclosed trailer which will need tires in spring (boy i made out) so x+y= get over it...
i am sorry to all on here for starting this trend. i am sorry i stand up for a business i am in. in the future i will post that all accounts are worth nothing to make everybody happy.. my new value for accounts::::
$25.00 account wit contract worth a case of beer
$50.00 = $20 cash
$100.00 = $35 cash
there people the new list is out.... happy.. i know i am :)

Vassk1
02-11-2006, 04:54 PM
I agree. Most posters here have absolutely zero business sense. There are exceptions but I won't name anybody.

Makes me proud that I decided against going into this business. I still enjoy reading about it though as I have learned a few things from some posters.

Precision
02-11-2006, 05:46 PM
Now here is how it works out in reality if everyone stays the duration

-$9,500 (I)

+$16,000 (G) - $10,700 (E) = +$5,300 (P)

-$9,500 (I) + -$10,700 (E) = -$20,200 (I/E)

-$9,500 (I) + +$5,300 (p) = -$4,200 Year Ending Loss (REAL)

Basically he will invest and expend $20,200 to make $16,000 and fall -$4,200 in the hole.

In 2007 he will repeat this trend

-$4,200 (L)

+$16,000 (G) - $10,700 (E) = +$5,300 (P)

-$4,200 (L) + -$10,700 (E) = -$14,900 (L/E)

-$4,200 (L) + +$5,300 (P) = +$1,100 Year End Profit (REAL)

As I said, 2 years minimum to dig himself out of the hole he purchased.
Yeah he will Gross $32,000 over two seasons if everything goes perfect.
But $1,100 is not much PROFIT for two years of labor.
Subtract wear/tear/replacement on the used equipment and the service truck...
Well he's still in the HOLE!

thank you for the illustration of why I was not terribly happy with my $10000 investment to gross $23000 over 2 years. Now I will admit I sold the equipment for 3/4 of that, but it still was a bad decision that could have turned out way worse.

mak2
02-11-2006, 07:44 PM
I agree. Most posters here have absolutely zero business sense. There are exceptions but I won't name anybody.

Makes me proud that I decided against going into this business. I still enjoy reading about it though as I have learned a few things from some posters.
I dont claim to know a whole lot about lawnmowing or business,:drinkup: I am real new and spend a lot of time on here trying to learn. My question is since you would obviously, in your opinion, be one of the few smart guys around, why would you be so proud of not going into this buisness? Since everyone else are dummies, wouldnt you make all the money?

lawnworker
02-11-2006, 08:41 PM
I see a lot of people on here talking about how equipment makes the company. That may be true in a lot of instances, but for the emerging generation, it may not be. You do see a lot of people out there with a truck, trailor, and a mower. They are making some good money, but it is because they have probably bought things cheap. Look at it like this:

Instance 1:
a used 1990 chevy - 4000
a 36 inch walk behind - 1500
used ghetto trailor - 400
cheap weedwacker - 75
a used 21 inch push - 50 bucks

all in all they have around 6000 in expenses, and they go out and work in off in little time, and can begin to profit in a shorter amount of time. Might break down a little bit more, but can be fixed with minor repairs most times. This is assuming the person put some time and effort in finding good quality used equipment.

Instance 2 -

new truck - 20,000
new trailor - 150
2 new weedwackers - 400
2 new ztr's - 14,000
2 new 21 push's - 1100
misc blowers, stick edgers, tools - ?

Here you can have 40,000 wrapped in luxury items. Not to say some things arn't essential, but some things are just luxury items. You are riding your mower, when Joe Blow is walking behind his. You get done sooner, but her makes more.

It all comes down to working smart for the future, and keeping costs low, and knowin when to spend the extra money on luxury items to get you to the next job faster and when to work harder to make more.

Larry stone would be proud

lawnworker
02-11-2006, 08:52 PM
so to all people when you sell out and most will sometime unless they plan to go under sometime.. remember that if you have 50 accounts that you have been cutting for 5 to 20 years remember to only sell your trailer for $1500.00 your ztr with 800 hours for $4000.00 walk behind for $1000.00 blowers and trimmers for $500.00 and all your accounts for $5.00 each.. so for a total of 20 years of your work $7250.00 then pat yourself on the back when the people who come to talk about buying it well it says on lawnsite.com that, that is all accounts are worth. cause accounts are not worth much, only your equipment.
if there were people who did not lowball on here and wanted to make the lawn business more of a real business they would say accounts are worth more than 1 month cut. remember only way you make money is with accounts. you could have all new mowers sitting in your garage all clean but with no accounts you get no money.
people this is your business, you are saying that accounts are worth nothing, well that just goes to show you that this business has no future
i think a fair price in this game would be 1 season worth of cuts. and yes a defalut in there if a account does not keep the new owner unless it was there fault for bad work or not coming.
people put some thought into what you do. dont think cause you got a real business name and a few mowers you are the man cause it is worth nothing.. wow people. open your eyes, this is why this lawn business will get no better.

Yep, this business for most people has little potential for vast riches. Rod father and some others have made it work. I am sure it is very tough though. Very small or very big- in between is screws ville. I think the future is going to get even tougher due to more "commercial" look a like equipment at Lowe's and other big box stores further devaluing our services.

Heck they had a mid mount Z rider there the other day.

I am smart enough that I could really apply myself and grow bigger and make money, but, with other option out there, is it worth the hassle? Who knows? I am pursuing other things as well this year along with solo Lawmowsraping services.

lawnworker
02-11-2006, 08:58 PM
That's right because....



There was no transferrable value in the accounts because there was no IN-FORCE CONTRACT to transfer. So basically, this guy paid him $9,500 for a few pieces of used starter equipment and 15 LEADS!!!

All 15 could change their mind before season starts or any time thereafter.

The point is that the buyer got SHAFTED.
Even if they all stay, he still got SHAFTED on the price.

All this contract talk is totally meaningless, If Milo is a sole proprietor they wouldn't pass on re sale, unless he had an assign ability clause in them.Generally, Only corporate contracts are transferable.

Vassk1
02-11-2006, 09:02 PM
If he puts it in writing then the accounts are indeed transferrable. If any customer drops the new guy through any other reason but negligence then Milo is responsible and must either replace the account or reimburse. I'm actaully going through that same thing now.

Envy Lawn Service
02-11-2006, 09:11 PM
All this contract talk is totally meaningless, If Milo is a sole proprietor they wouldn't pass on re sale, unless he had an assign ability clause in them.Generally, Only corporate contracts are transferable.

Ugh.... whew... OK, here is how I addressed Rodfather about this and it should cover you as well.

Rod, the idea is that "IF" there are contracts in place, when a buyout occurs, it can be handled one of two ways... The buyer purchases the business 'as a whole' and therefore the buyer now owns the actual company the costomers are contracted with... as in if I came to you and bought Rod's Mow Blow and Snow in it's entirity, I would then own the company your customers are contracted with, and therefore own the contracts by transfer of ownership.

The second way, like Milo is doing, selling the culls only... if a contract were in place, both Milo and the buyer would meet with every customer and transfer the contracts... void Milo's contract and put the buyers contract 'in-force' in leu of Milo's, whereas everyone signs off on the transfer.

Does that make sense?

lawnworker
02-11-2006, 09:13 PM
Vassk1, I mean trasferable from the customers stand point. I don't think they would be valid, unless the customer signed I assignment clause. Any ex lawyers wanna chime in here? I could be wrong.

milo
02-11-2006, 09:40 PM
last thing i will say about selling a business (i hope). if i were to sell my whole business i would have the guy work with me and he would meet everybody I MEAN EVERYBODY. IF THERE WERE ANY PROBLEMS WITH A CUSTOMER NOT WANTING A CHANGE AND I WAS TOTALLY DONE, WELL THEN THAT ACCOUNT IS GONE ALL GONE.. ZERO NADA FOR IT JUST A MEMORY. IF HE DID NOT WANT A LAWN THAT WAS TUFF TO MOW (HILLS WHATEVER) THAT ACCOUNT IS GONE ALL GONE.
I WOULD NEVER HAND SOMEONE A NAME AND ADDRESS AND SAY HERE CALL THEM AND SAY YOUR THE NEW GRASS CUTTER.. NEVER EVER.. I WOULD HELP HIM ROUTE OUT THE WAY I DRIVE EVERYDAY AND SHOW HIM ALL I KNOW.. IF FOR ANY REASON THE BUYER DID NOT WANT A CUSTOMER THAT CUSTOMER WOULD BE DONE WITH PERIOD AND NO PART IN THE SALE.. AND IF CUSTOMER DID NOT WANT SOMEONE ELSE BESIDES ME DOING THE WORK WELL TUFF FOR THAT I WOULD TELL THEM I AM OUT OF THIS BUSINESS AND THAT WOULD BE THAT...
and i hope this helps clear about what was said before. i agree 100% if you are buying accounts from someone and he hands you a name and address and says here are the accounts i would say what is wrong with you and not buy anything from such a person. that is no more than a lead and that IS WORTH NOTHING. :bday:

yrdandgardenhandyman
08-28-2006, 09:58 PM
I Am Gonna Be Selling Alot Of My Business To Go Into Another Line Of Work. I Am In Allentown Pa Anyway, The Funny Thing Is What Are The Accounts Worth... Well I Have Had 2 Guys That Are Also On This Site Come Over To My House And They Are Like Well They Are Worth 4 To 6 Cuts And That Was It. They Read On Here Thats All Accounts Are Worth. So My Question To People Here That Hate The Lowballers And Say We Get No Respect Is. Why And How Could They Only Be Worth 4 To 6 Cuts?? People If We Want To Make Ourselfs Worth Something Why Do People On Here Say That??? Just Likw Read On Here You Would Be Better Off Hiring Someone Who Will Work For You And Run It Into The Ground And You Would Come Out Making Way More. This Is A Business Where It Is Really Easy To Start Up With Not Alot Of Money And So Many People Do. But If We Want It To Ever Be Worth Anything They Should Sell For A Nice $$$$ If We Sell. Look At Oil People. Gas Should Only Be Like $1.25 A Gallon But They Are Lining There Pockets Cause That Is What They Say Gas It Worth


Pssssttttt. Why do you capitalize the first letter in every word?? Just wondering. Now, back to more productive talk.

surgeon83
09-10-2006, 01:22 AM
Sorry if this has already been settled, but I don't have time to read the entire thread. In 2000 I sold my business with equipment listed below (all <2 years old except the Goodall and the truck) plus 45 lawns grossing $1050/week for $15,000. I thought this was low, but it came out to about 4 cuts on each of the lawns, plus the buyer was nice enough to let me have the money from his training week, even after he'd already paid for the business :)

Of interest, I never had written contracts with any customers. I simply showed up when I said I would and never missed a beat and they couldn't be happier. When I sold the business, I sent letters to all my customers explaining I was handing the business over and that I would train the buyer. After a few months there were 2 people out of 45 who decided they didn't like him, but he picked up an additional 15 before the end of the year anyway. I still see him working on customers that I started as far back as 1993.