Remote Management of your Lawn Business ?

[kjohnson]

Hi,
I have an opportunity to purchase a Lawn Care business. I do not want to (cant afford to) quit my full time job. My regular full time job makes me 107,000/yr Salary.

Question:
Can I manage a lawn care business hands off? Ony helping on the weekends?
Does anybody do this?

Thanks

[Doug1966]

how many hours a week does this 6 figure salaried job take you?

If you somehow have the worlds best job where you make 100k a year, and only work 40 hours a week, then it might be possible to do what you are saying.

But anything more than that forget it. It will stress you so much that your salaried job performance will suffer, which is obviously your bread and butter.

Don't forget - this is a manual labor industry. If you leave your guys unattended, they won't work hard for you and they'll be sloppy. If you find a foreman that actually does give a rats ass and does take care of it for you, you'll end up having to pay him so much to retain him that you'll end up with a profit that is not worth your time.

[kjohnson]

Thanks Doug.
I only work 40 hours a week. Im in the Computer IT industry. I was going to use it to simply suppliment my income.

Sounds like to me that you are saying, If I want it to succeed, I need to play more of a hand on role.

[Az Gardener]

I know it can be done.

You just have to approach the business end as vigorously as most approach the purchase of new equipment or making the straight cool stripes.

This means hiring carefully, having systems, training. You also have to pay enough to have a productive member of society want work for you. That means you have to charge enough to hire that person. That means your product has to be worth the price you charge.

So what came first, the quality service or the trained professional that does the work? It is not easy but if it was everyone would be doing it.

I guess the question you should ask is are you buying a business (if so some portion of this should be in place and functioning) or a Job?

[kjohnson]

I am purchasing a fully operational business, that rund 2 crews (4 people) and does 100-150 yards a week. Grosses over 200k / yr.
Does that answer your question?

[SOUTHERNGREENSCAPES]

Is There Any Management (forman, Etc.) Already In Place Or Is It Just 4 Laborers. If It Is Just Four Laborers, You Will Loose A Lot Of Your Base To Poor Performance B/c You Can't Expect Day Labor To Manage Itself. If There Is Management In Place And They Are Good At What They Can Do, You Can Maintain Everything You Have Until You Get Aclamated To What Is Going On.

[kjohnson]

Not sure yet what their current positions are. I havent met them.
Thanks for all of the responses.

[shiveslandcsaping]

Find out what your employees are going to be like b/c you will need someone top notch that you can trust to be in charge. I have a friend that does it and the only thing he really does is estimates and deals with the phone calls and has like 15 guys working for him doing the work but he has top notch guys and pays them well. I will say he works his ass off with doing both but makes it work.

[dutchhook]

2 most important questions not asked or answered yet.
What is the purchase price and what is the cash flow or profit. You don't have to answer these to us, but it better be on the top of your list for your decision.
at 200K gross sales per year, with you working at a full time job, if you're paying $50K for the business and it makes $40K (20%) even if you keep it going, you're working for free for over a year, and you also need to find out how active the owner is in selling or mowing or managing the business.

Gotta tell you, it doesn't sound like a great fit. This business is ALL ABOUT PEOPLE. People meaning Employees, Customers and even Suppliers. If you aren't around to nurture these relationships, it doesn't sound quite right to me. Then when the equipment goes down, or it's a rain day, etc... the costs can add up.

If you do decide to join us, I wish you luck! I'm sure we'll be here to help you through!

Steve Hoogenakker

[kjohnson]

Wow.
There are some great people on this site. I appreciate the input.
H
e hasnt given me and offer yet. Probably in April. Im thinking around 100k for the business.
I havent seen any tax returns or documents as far as net profit. He told me that I would get close to net profit (my bring home) of 70-80 k depending on if I worked or had someone do my work for me. It sounds like a lot.

I was thinking that if I hired a manager at 40k / yr ( or whatever). I could just me the owner and let him manage. I would still net 30-40 k yr as the owner.

Thoughts?

[PTP]

Do you have management experience? Have you owned a successful company and managed it remotely as you are considering? If the answer is yes, then this may be worth considering. If it is no, then don't do it.

It all sounds easy and everything looks good on paper but the real thing is slightly more difficult.

Here is where I am coming from. I own a lawn care business. We grossed over $150K last year. Last year was the first year that I was hands off. I hired a manager and he runs the entire business for me - everything from the employees to mowing, to maintenance, to billing - everything. I give advice when it is needed.

I built this business from scratch a couple of years ago. I had big dreams and no customers so I started from there. Along the way, I learned a tremendous amount about customers, billing, equipment, employees, etc. I needed that practical experience to get where I am today. I would not have been able to start off in the position that I am in now.

If it helps, you can read the thread that I posted when I first started. It's really long but perhaps you will find something valuable there. Just do a search under "PTP" and look for the thread labeled "I did it". I would also recommend looking up "justmowit". There were a couple of long threads that he was involved in and as the owner of a company that mows thousands of lawns per week, his advice is worth listening to.

[jimmyburg]

Why is he selling the business? are you sure he wont start a new company with a different name and steal your customers back?

[kjohnson]

No i do not have any lawn care experience, only business project management experience.
He will not start a new business and steal the customers, he is going off to be a missionary to Jamaica.

I was going to offer to give him 10% of the profits as a tithe, in return for his support via phone or email if I need it.

[jimmyburg]

make sure you look at his tax records and contracts with his customers. if he is giving extra work for nothing and you buy the company and not keep the same deal they will find someone else.

[dutchhook]

KJohnson,
You're talking about 1.2 times EBITDA, so that's a very fair price.
at 150 lawns per week.
If, at some point in the future, you'd feel ok with sending me his numbers or financials, I'd certainly help you look for opportunities and problems with the deal.
Since he's going to be a missionary, instead of offering to pay him out upfront, maybe offer him a down payment and a percentage of the actual billing when it's paid. Make it over the first 2-4 months so you can be done with him soon, but this ensures that he has every motivation for these guys to re-sign as you!

I'm getting the impression that you understand at least business in general.

Hiring a manager at $40K is overkill for 100-150 lawns, but I think that's OK, and that tells me you already understand the people principle I talked about early. So, if 40K is overkill, how can we use him to get the job done and make you even more?

At 40K for a "manager", you might be able to get someone who can oversee 2 crews, but will help sell new clients.

Here's a really easy way to increase your business using this new manager.
I used to do mailings of 500,000 pieces of mail in the spring for lawn care.

These first mailings were "butterfly mailings" This "butterfly marketing" idea is simple but worth $100,000.I think it's worth a million, but you're not that big yet!

Here it is:
Hire your manager (outgoing personality, maybe with an D-S on the DISC scale), re-up the present contracts for the same price as last year, but ask the present owner about the worst 10 lawns profit and headache wise, then think about canceling them! Oops, that's not the butterfly idea, but it was a good one.
Then, make up brochures. If your new manager is any good at sales, have him go out with the crews as soon as possible. (I don't know how spring cleanups work in Fort Worth), then have him butterfly market the neighbors while the crew works on your customer. What you do is have him stop at the two neighbors on each side of the customer and the three neighbors across the street (thus, looking like a butterfly), knock on the door, drop off a brochure and talk to the homeowner. On the brochure, state that "we mow Mr Smiths' lawn at 123 Redskins Drive, and would like the opportunity to make your lawn and life better and easier for only $40 per week" You can even offer a free mowing the first time, or better yet a 50% discount on the first two mowings.
Give the "manager" a GOOD spiff for selling the accounts.

I'm telling you, if the guy is good and the timing is right, for less than $3,000,including time to mow 50 yards for free one time,brochures, and the spiff, you can increase sales by 50%.(Wait, 50% is not going to happen) So with 150 present clients, you're going to hand out 750 brochures, if you get 10% you've increased sales 50%, and hopefully you can use your present clients as referrals.

One last perspective: If you pay this present owner $50K for 100 accounts, that's $500 per account. If thie butterfly idea works, you're only going to pay for the brochures up front, but if he gets 50, you've picked up the NEW accounts for only about $60 per account. Voila!!!
Also, find out if this guy is doing the chemical work on these. That's a whole new opportunity. If he isn't, PM me, we need to talk about that a little more.

Best of Luck!

Steve Hoogenakker

[topsites]

Hmmm...

Can I drive my car cross-country from my bed while sleeping?

[AI Inc]

Be carefull what you pay for it. These bussinesses are not worth what a lot of people like to think they are.

[kjohnson]

Thanks for the great advice Steve. Sounds like it may be doable, but I will have to really talk to him about the current accounts. I know he has several large accts that make up 75% of his work. I wouldnt know how to find that super crew manager. I would have to cross that bridge if I decide to.

Question: If a manager is really great, then why wouldnt he want to own his own company?

[dutchhook]

Well, that's the rub.
It's the problem we all have. You get the great guy, he's somewhat of a visionary, and says I can do it.
The good news is you don't really need a "manager". You can give him that title, but what do you really need? Maybe an outgoing crew leader with decent people skills who isn't afraid to talk to neighbors.
You can also get a non-compete, or a non-solicit from the employees.

I assume you're not buying stock, that you're buying assets, so the employees will have to be employed by KJohnson Companies.
In some states, the offer of employment from a new employer is enough "consideration" to make a non-compete-non-solicit hold up in court. For a judge to uphold something like this, you, as the owner have to be able to say "They got something in return for signing this, they got a new job with my new corporation". Some contractors will try to do this with current employees and say Gee, if you don't sign this, you won't be able to keep your current job. That may fool some employees into leaving your accounts alone, but I don't think it'll stand up in court.

If you want it to hold up in court, I'd go with the non-solicit. That means the current employees, for consideration of employment with KJohnson, must sign a non-solicit to work for you. They can go to a competitor and work, but they cannot solicit clients or your current employees. What else do you REALLY care about? This offer and signature MUST get signed before the first payroll, and ideally, before you consummate the offer with the seller.

I don't know the counties around Dallas Ft Worth, but make it cover your service area, like 3-4 counties and no more than a year.

If you want to scare the person, go with the non-compete. It might not hold up in court, but it'll scare the present employees a little more up-front.

All of this tom-foolery is ok, but sizing your employees up right away, and giving them a reason to be loyal to you is always the most realistic way of protecting clients. As a matter of fact, what about one of the 2 present crew leaders? Can one of them schedule and sell?? Hiring from the inside should really motivate this person, and say to the rest of the employees, HEY, we have something special here!


Oh yes, one other thing. You said he has several accounts that make up 75% of the work, then the sales price should be discounted. This is really a big risk to take. If you decide to do the deal, I'd tell him the two of you need to meet with the prop mgrs of these sites together before he goes off to his missionary work, and get new contracts signed and meet face to face.
Shouldn't be a problem if he's honest.


Best of Luck!

Steve Hoogenakker