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View Full Version : the Right Questions


amtrucker22
02-23-2007, 12:27 PM
I am think of purchasing a lco and had a few questions.

Other than the price, the lawyer, and the accountant what are some other gotchas that may exist with purchasing a lco. We are talking lawn care only (no landscaping) with mostly commercial accounts under new 2 year contracts. What are some of the things you wished you looked at harder when you purchased a lco, or some of the things that bit you in the butt afterwards. We would also be going from 35 hours a week to running at least 2 crews which I think is going to be a logistical problem (with employees, WC, ect). This is something I do not have a problem working out but just wanted to get everyones .02 worth.

Thanks,

Paul

amtrucker22
02-25-2007, 10:39 PM
Bumpidty :)

salandscape
02-26-2007, 10:34 AM
Verfiy that the accounts are worth the weekly/ monthly rate.

Sign off that you are buying the accounts only not the company (if that's what your doing) to insure that you are not accepting responsiblity for his previous issues, IE "Joe told me last year that he was going to replace this shrub this year and if he sold the company the new owner is going to do it, etc." Get it in writing don't assume anything.

Work out a warranty against getting fired from a job for reasons out of your control. If you do a poor job that's your fault, but if Suzy Q moves a month into the season and you don't land the new owner get compensated for it. Find out as much as you can about every account, who is cranky, cheap, late payers etc. If they aren't forthcoming with this info there is a major issue with the accounts.

rodfather
02-26-2007, 04:24 PM
Minimum 5 year non compete clause

jsf343
02-26-2007, 05:11 PM
^^^^^^ all the above^^^^^^ what else I would throw in is make sure you know EVERYTHING the guy did or did not do on the property, I would also talk with the customers about the contract, make sure he/she is on the same page as you (as far as what is expected) Also, make sure you know the numbers and whether or not they will work for you. (I am talking the amount he is getting for each property) if there is anything that looks fishy make SURE you question it. I learned just the other day that one of my properties (which was under priced) that I bought last year had given $2500.00 up front to the company that sold me the contracts. They did it 3 weeks before I finished buying them. I never knew a thing about it and he didn't say a word because he better. So do I now. Hard lesson to learn, but hopefully you will learn from this thread before you make the purchase. Buying someone else's contracts can be a great thing but it can also bite you in the fanny if you don't check things out. One last thing... when everything is done and you feel like the deal is gonna get done have a good lawyer (is there such a thing?!:dizzy: ) look over EVERYTHING!! Don't get inpatient, take your time and really make sure your ducks are in a row.
Good luck, I hope it works out for you.

Jeff

cpel2004
02-26-2007, 05:22 PM
Biggest advice, WALK EACH PROPERTY MAKE SURE ACCOUNTS ARE WORTH IT, MEET WITH EACH HOMEOWNER IF POSSIBLE, HAVE GOOD RELIABLE EQUIPMENT. Just a couple of things I have learned, the hard way. Keep one of the guys best employee.

Fantasy Lawns
02-26-2007, 06:59 PM
If your getting equip ... do a lien search on the big stuff ....other wise if you later take it to a dealer n it has outstanding payment due ....they'll have to keep it

jsf343
02-26-2007, 07:16 PM
If your getting equip ... do a lien search on the big stuff ....other wise if you later take it to a dealer n it has outstanding payment due ....they'll have to keep it

Thats something I never thought of. When you are talking "big" equipment are you talking something like a ztr? good advice.