what's everybody's opinion

[foo569]

tonight i am going to look at a lawn business to buy the guy is asking 120K. he says he makes 160K/net per year.I believe him and he is a pretty nice guy . i mean i've only spoke to him over the phone, but everything sounds good.so i just wanted to know what all of your opinions are.






Jonathan Kiwacz

[Volhunter]

I don't know about everybody else, but I would need a LOT more information to form an opinion on a purchase that big.

[Pauls Mowing]

I'm more interested in your opinion after you see his books, tax returns, and talked to your banker and attorney.

Paul

[Fantasy Lawns]

I'd educate myself about EVERY thing ....this is a Good Size Outfit ...with 160k "NET" .... it takes a fat monthly income for that amount of loot to trickle down into take home pay over 13K per month ...

look at everything real close .......than do yourself a favor .....get an outside advisor or CPA in small business financial deals ...it may cost $1k ...to perform an "Audit" .....but if your serious it will be $$ well spent

Good Luck ;->

[LJ lawn]

how many properties does this guy do? and will you be able to handle it all.

[ronslawncare]

i said this once before but i think you need to here this story.i was going to buy a scag off another landscaper at one time and the guy ask me do you want to buy 200 acounts .i think he said 4,000 .i told him im not interested i get my own accounts .anyway i came back a few weeks later to check if he still had the scag for sale .he sold everything .the guy that bought the acounts lost 75 acounts the first week then tried to get his money back but once you sign your screwed.plus some of the accounts that left the buyer went back to the original company lol. so if you feel like blowing your money this would be a great place to start.....

[Earthworks II]

I don't know a whole lot cuz i just started up last October 2000. But from my own experience i wouldn't sign anything till you have an outside party take a look. I bought a small landscape & lawn maint. Bus. from a guy. It was to have generated over 75,000 annually gross. It came with a bunch of equipment and about 50 clients. As of now over 50% of these clients have gone for various reasons and the equipment requires either constant maintenance or complete replacment.
I kick myself for not doing the homework. It would have been better just going out buying new stuff and soliciting my own clients. I'm in the process of re-building the biz but it hasn't been easy by far. Take your time. relax, don't jump in without serious evaluation. If it's there today it'll be there tomorrow. Good Luck.

[Eric ELM]

For $120,000 you could start one heck of a business. For a lot less you could also start one heck of a business. As said before here, we would need a lot more information on this to even thing of forming an opinion on this deal. If you are getting a nice shop on some acrage and lots of equipment, it might be a good deal.

[Toroguy]

Based on your quoted figures, you should buy it and pay the current owner to run it. Give him $50,000 Then pocket the $70,000 extra net. When you are sure of the customer loyalty send the owner/mgr. down the retirement path.

If you were a manager for him now, you would have a better grasp of his situation. Its funny none of his workers will buy him out? That doesnt look good.

Check his tax records,see his rates, ask him questions, check the equipment, is a shop part of the sale, etc, etc.

[Currier]

WOW! could you imagine going from 0 to 160 K net with the swipe of a pen? I have a hard enough time just keeping up with regular growth. They say that you must control growth or it can kill your business. I guess if you are up to the challenge that goes with an outfit that size then you have some figuring to do. For me that would be a no brainer. I am too chicken to take a risk like that...but then I'll probably never run with the big dogs.

p.s. check Eric's site links about buying businesses. Lots of good fodder there for you to consider.

[David Gretzmier]

O go ahead and buy it. the worst that can happen is bankrupcy divorce, and skin cancer. or worse. I have said it before, get a covenant not to compete, pay out the buy out from profits over time and pay only on profits that stay after the current owner leaves. Dave g

[Keith]

Whew! 120 large is a lot of jack. Man, I would want to see records, records and more records of this business and would still be asking more questions. This isn't something you talk with the guy on the phone with. You need to spend some serious time with him going over everything over and over. Then break everything down and decide what it is really worth.

I know a guy that bought a lawn care business several years ago. He went to work for the previous owner for a year before buying. That way he knew the business and the accounts inside and out. But I think he still ended up losing money because the guy made it look more profitable on paper than it actually turned out being.

[lawnman_scott]

Be sure to get an attorney, anyone can fill out a bunch of tax forms for show, make sure they were actually filled and paid on. Seems too good to be true, could be paid off in a year as long as you can live on $40,000, makes no sence.

[AndrewLawn]

Hell,you could spend 120k a lot more wisely than that!why don't you get a new truck,trailer,equipment,and do some SERIOUS advertising...then use some of the extra that you'll still have left over from that 120k,and get a few more employees to handle all the new work.Or,just drop all your bad accounts,and only keep the really really good ones.If you double your accounts,you can give the "lower half"(in other words the ones that suck)the boot!

[Charles]

For $30000 more dollars you can buy a dairy queen franchise. I love Dairy Queen ice cream. Hire nothing but big breasted college girls and you make a mint and enjoy the view. Just a thought

[Keith]

Ummmm, big breasted college girls :blob3:

[bubble boy]

i really got to get down and get some ice crean in S.C.

[Toroguy]

You can have my business for nothing, just hire me to work at the DQ. But only if Charles is the Mgr.

[SMB]

Hmmm...
-New Chevy Duramax truck, 40,000
-NICE Trailer, 3,000
-61" ZTR 8,500
-36" WB 3,000
-3 Shindy trimmers, $650
-Stick Edger, $400
-2 BP Blowers, $800

Total, $53,350

Optional

-21" Commercial mower, $1,000
-Snowplow, 7,000

Grand Total, 61,350
These are really rough figures, but you could start a very decent business with less than half of 120k.

[bubble boy]

its not that decent-you have no clients. but i totally see your point-Clients often are waiting to be found and you could spend the rest of the 120k on advertising. or a vette.

[Lawn DOG]

After that deal. I got some swamp land in Florida I want to sell to you. LOL:rolleyes:

[tgrebis]

Are you sure this isn't gross. I am assuming the customers come with this deal. Let's say he has 200 hundred lawns at $30 bucks a lawn average. With lets say 28 cuts a year. Thats 200 X 30 X 28 = $168,000 a year. Let's be generous and say the lawns are close to each other and it takes 1 hour of labor for each lawn. Lets say you use 2 man crews(more effecient). One guy at say $13 and hour the other at $8 an hour. The average is 10.50 + other moneys you have to put in as an employer. This is roughly 30% of wages. So you have 10.5 * 1.3= $13.65 a man hour. 13.65 X 200 lawns X 28 cuts = $76,440 in wages paid per year. In my own calculations I calculate $5 in gas and mower expense for each lawn cut. I also do a lot of preventive maintenaince and a lot of my own work on my mowers. So mower expense is 5 X 200 X 28= $28,000 a year.

so you have
76,000 in wages
28,000 in mower expenses

lets say you have three crews for 200 lawns and a backup truck.
4 trucks X 1700 commercial insurance = $6800 in auto insurance
$2000 in business insurance.

Total monies paid out a year.
= $112,800
So take home before taxes would be 160,000-112000= $48,000.

Now these numbers might not even be close to whats going on but this is the kind of analysis that has to be done in much greater depth. Always calculate more expenses than you think.

Hope this is helpful.