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View Full Version : What to do?????What to do???Feed me some input!!!!


cleancut
07-28-2001, 11:08 PM
I just got back from the beach today and was laying around relaxing when I got a call from my biggest competitor in my immediate area...He said that he was going out of business and wanted to know if I wanted to take over his client base..I told him I was interested and asked him how much, and he said that he would turn all of his customers over to me if I would continue to mow six of his personal properties for the remainder of this year and mow four of them all of next year....Over two years this would come out to about $8,000 worth of mowing...The lawns that he will be turning over, generates about $70,000 in gross for just the mowing part...There are a total of 60 yards and I already have 110 of my own...Of course if I did this, I would write out a contract stating that I would only mow the six lawns if a certain percentage of his clients agreed to stay with me....I have almost enough equipment to do the 170 lawns, I might have to buy 1 more mower and another trimmer and blower...I would also have to hire 2-3 more people, which will be my biggest obstacle...He wants me to start on these next week...I know it's short notice but I hate to pass this up....Any suggestions or comments will be appreciated....I don't have much time to decide, so don't be shy....Thanks....:blob2:

LAWNGODFATHER
07-28-2001, 11:28 PM
Well Cleancut, Opportunity is nocking on yur door

Keep in mind do you want them

Do you know if they are in your charge for sevice range

Can you find the labor

Do you want to put up with the added aggravation

Can you get the mower(s) you need

I would do it only for just mowing his for the remainder of the year

the only thing I don't like is you going to give him over 10 percent of a years revenue for his accounts

the contract is a good idea

but on the other hand no money out of pocket and I would do it the way he wants

cleancut
07-28-2001, 11:35 PM
After it's all said and done, I'll be giving him about $4,000 worth of labor for the accounts...I'll probably see if he'll go for me finishing out the six lawns for this year and only mow his yard and his other rental unit in the second year....I think that is extremely fair..I would never pay cash for accounts but this is something different...I've always tried to grow at a steady pace but this might have to be an exception....

AVRECON
07-28-2001, 11:39 PM
Sounds like a damn good deal to me. I'd take it if I was you. Good luck!:blob2: :blob2:

jnjnlc
07-28-2001, 11:47 PM
Sounds good to me. I think I would go for it. Of course some sort of contract is in order so that you do not get taken.

cleancut
07-28-2001, 11:59 PM
Hey some guys from NC...That's where I just got back from...We went to Topsail Island for 7 days...Beautiful place down there...Looked in the phonebook..Only 1 page of ads for Lawn Care and that was for a very large area...I was expecting 5-8 pages....Is your areas very competive...????I have a buddy that lives in Charlotte and is a TV producer for Jefferson-Pilot...BTW, thanks for the advice.....

smburgess
07-29-2001, 12:13 AM
After buying a few lawn maintenance business', it sounds like a GREAT deal if the accounts are profitable.
You'll be asking too much of him to "guarantee" a percentage of clients will stay with you, that is not within his control, but is within yours.
If you really think they'll bolt because he'll be leaving, express it as a "merger" and ask the guy to kind of "be available" for awhile, - then after about six months, you kind of start telling the clients that you're buying him out, - once the clients are use to you and see your work.
What is he doing with his equipment?
I would have him sign a "non-compete" agreement that would keep him out of the business for say, five years.

cleancut
07-29-2001, 12:07 PM
He already has a deal to sell his equipment...You wouldn't believe the equipment that this guy has accumulated through buyouts...He has 5 ztr's, 12 wb's, 6 trailers, and tons of blowers and trimmers...Has a new F-350 that's painted with his logos...This guy started out 3 years ago and bought out two of the largest competitors in our area...He just had way too much overhead..I know it's a great deal, but I'm just a little worried about being overextended on such short notice....If I had a month to prepare, I would definitely jump on it...

Henry
07-29-2001, 12:38 PM
What about his current employees? With all that equipment he must have had quite a few people to run it. Did they all find new jobs already?

I would ask to see some proof of income from those accounts. What does he include in his maintenance service, is it more than you do?

I know someone that bought a business and had the owners sign a non-compete but one of the partners didn't skip a day. He's been cutting lawns part-time ever since, but he's a cop so I guess it don't count. :angry:

HOMER
07-29-2001, 12:41 PM
Sounds interesting but are you prepared to service 170 accounts? Are these the stamp size or normal .5 to .75 acre lots with trees toys and limbs..........etc. Of course if you lost any you are only out labor, your labor to maintain his property. If someone handed me 60 more I would run awy from it...............I want fewer accounts than I have not more.

Good deal if that's what your shooting for.

roscioli
07-29-2001, 12:44 PM
Cleancut- Think of your market if you do buy this guy out. You will be in control, right? If he is your biggest competitor, and you have more accounts than him, you will be a monopoly. I would go for it, you have almost all the resources to take over, just a few (large) obsticles. Who is buying his equipment? A local LCO? If so, definately get his accounts, before they do and lowball you to death. If you dont take them someone will, and you will still have that competitor floating around, the one keeping you from being in total control. :angry: That would bother me. Take a look at his lawns though, make sure he didnt overfertilize or something crazy YESTERDAY, and wants you to take over tomorrow before they all BURN OUT, and you are blamed! Its little idiotic things like that, that you would never expect, that could ruin a potentially awesome business deal. SO, IMHO, go for it, just be careful.

Albemarle Lawn
07-29-2001, 02:38 PM
Enter the deal such that you are NOT obligted to service ALL the customer accounts. This way, you can try all the properties and drop the ones you don't like, or that are not profitable.

Yes, you would still be obligated to service the properties owned by the other lawn care operator, as part of your deal, just not all of his customers.

Plus, you could even sell 50 of his former customers, and keep the favorite 20 or so for yourself.

Wish I had a few more accounts these days.

Just go for it, you can make it happen!

Ken

Loosestrife
07-29-2001, 09:29 PM
1. Be sure that these popoerties are priced correctly.
2. Are they all in your service area?
3. You will not retain 100% of them, no matter what you do.

You would have a total of 170 accounts after the deal. Cutting an extra 4 properties per week is nothing. Your crews waste that much time each week on coffee breaks.

4. The one week part is what scares me. Can you mobilize to handle that amount of additional work in that amount of time?

cleancut
07-30-2001, 09:21 PM
Well, I made my decision..I didn't take the accounts..It was just too short notice...I couldn't find enough help to start them this week...If I had had another week, maybe I could have pulled it off...He's not going to offer them to anyone else in the area..He's going to send letters to all of his customers just basically saying that he's quitting the biz...Out of the 60 accounts, there are only about 20 that I would really be interested in...They're all commercial accounts and are within a 10 mile radius of my house...So tomorrow, I'm going to visit the accounts with a bio of my company and talk to the people in charge...I think I should get most of them because I have a good rep and I'm the largest company in my area....This guy had let all of the yards go for over two weeks and they are in bad shape so they'll probably be upset when they get the letter saying that he's quitting..I didn't really want to be associated with him since that might make me look bad....I know where most of his yards are anyway, so this way I can pick and choose without oweing him anything...He sold his equipment to someone in another area that is more than 50 miles away...