View Full Version : Making offer on small business 2marrow
04-23-2007, 12:12 AM
I ran into someone this afternoon who owns a small business in lawn fertilization and weed control. It would almost be perfect for me at this point. He is doing $90,000 per year and only 4 rounds a year. I could so upsell almost all of them to a 6 round program. There are (roughly) 160 accounts in this. It comes with no truck. Just a space saver sprayer and a pushspreader. He sold his mowing accounts but the guy he sold too couldnt spray lawns. I am meeting up with him for lunch and we are going to drive by some of his accounts. I am able to get the money with 0% interest for as long as I need it. I plan to offer him $25,000. GOOD DEAL????????????? What is most likely his counter offer? Most of these people also take aeration that is not part of that $90,000. Thats lawn care only!
04-23-2007, 02:14 AM
That's a good place to start.. but be aware that if he approaches tru-green, they'll offer him 60,000 right off the bat. (and he could get more if he pushed it) So when you have a deal, get it set in stone immediately.. (I'd keep a basic contract in my pocket.) Don't give him time to explore his options.
Yes, I speak from experience. a local guy accepted my offer of 15k on a similar operation (180 customers) and when I showed up the next day, with a contract, it was too late... he had second thoughts, And called Tru-Green who offered him 50K over the phone sight unseen.
Not that it's a total loss.. now I'm getting his customers for free ;)
04-23-2007, 11:06 AM
25k would be a steal! I would expect to pay at least twice that much.
04-23-2007, 08:25 PM
Thats to funny. Tru-Green lawns are easy to get. Well, I made him that offer and of course he is going to think about it. He does not want to sell to a franchise considering his entire customer base came from unhappy Tru-Green customers. I hope it works out!
04-23-2007, 08:50 PM
What guarantees will you have that any of his customers will stay with you?
You could wind up buying nothing.
due dilgence is needed here. Check every last single account for lawn condition and how the client feels about his service.
There isn't a thing in the world to keep the customers from leaving when the y find out he is selling out. A lawn care contract with a customer isn't worth the paper it is written on.
04-23-2007, 09:20 PM
$90,000 for 160 customers, must have some very big lawns in there. I would check his records very close before offering anything. From my experience going through a sale before, the worst thing you can do in the first year is to push more applications on these people. They are used to getting a certain program that they are happy with, don't get greedy off the bat. That is the TG/CL method.
04-23-2007, 11:19 PM
This sounds very similar to the deal I was looking at...
You know how my deal ended.. now read how it unfolded:
I too had been told that he 'cared' for his cusstomers, and he wouldn't wish tru-green upon his worst enemy.... funny how prioritys change when money gets involved :)
04-24-2007, 08:26 AM
Have you seen his actual books. He is averaging 150.00 per application. Here those lawns would have to be about 1.25 acres. Talk to the guy who bought the cutting end.
04-24-2007, 11:19 AM
His costomers are on average an acre. He is doing alot of commercial thats why he is only getting about 4 apps. I have really been thinking about it and I am almost steering away at this point. He declined my offer and I dont see myself paying much more than that. i could take that $25,000 and market and prob get that much business.
04-24-2007, 07:48 PM
I have full confidence that for 25 grand, you could market ALOT more than 160 new accounts.Sure, it would take some more time, but you know you are stepping onto and creating good accounts from the word get-go. Good luck with it, and I hope it works out best for you.
04-24-2007, 07:56 PM
$1.20 would be the very best. That means nearly 100% retention, very profitable, opportunities for upsales, etc, etc. Many variables.
Looks to me that there are many questions that need to be answered regarding this business.
TruGreen has this down pat. They know this business very well in regard to what a lawn company is worth.
Here's an idea...if the lawn care business is made up of mostly former TruGreen customers, find out from the guy what TruGreen will offer him. TruGreen is smart, cuz they will want a guarantee that X amount of customers will stay with them. Keep in mind that TruGreen would notify customers that they will become TruGreen customers - hence their problem. Then go from there.
When you get really serious, hire a lawyer.
04-24-2007, 08:03 PM
do you think that maybe tru-green OVER values said accounts? they havn't exactly been posting huge profits, and they can afford to pay more just to make sure that competition remains managable.
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