bohiaa
08-27-2008, 11:24 PM
Hello Gentlemen:
For all of you who have had questions about buying a business, I wanted to share a converstaion I had today.
a Guy calls me tells me he's selling out. " he's in my area" I have never met him.
he tells me his business takes in around 70.000.00 a year. it has 2 employees one has his license for sprinkler systems. he has 1 truck a dodge 2500 2 john deer ZTR's
I ash him how much he says around 100,000.00
he said he has 14 res and 8 commerical clients
Ok here comes the fun part..
I tell him that he's in the red and tryign to dump
I ask him, have you declaired the ZTR, he says YES. I ask why? he couldn't answer,
I tell him if he has taken full exzemption on these mowers, then it's time to throw them in the trash. BECAUSE, you should declair them over a 4 year period, at the end of this 4 years they should have 3 to 4 thousand hours on them.
If his 1 employee has a licenses he should be paying hom around 17 to 18 an hour, with that you will have to pay 1/2 in workers comp that brings it to arund 25.00 per hour that's around 50,000.00 a year.
the rule of thumb is you will loose 1/2 of the customers due to new onership.
bringing it to 40,000.00 per year "giving him the benifit of doubt"
he tells me he just bought the dodge truck.
I tell him that these larger trucks are worth nothing, maybe 10.000.00
he says theres 15,000.00 owed on it.
I inform him I just purchased a F250 4X4 for 9,000.00 I told him he's already upside down on the truck.
also this is the wrong time of the year because were winding down here in a few short months, and he has a 2nd employee. paying him 9.00 per hour.
I told him with insurance that's 14.00 and that is 15 to 16,000.00 per year
at 100,000.00 it would take 10 to 12 years to recoop and see a profit.
the 70,000.00 he claimed was before expensies. so operating cost would run that down to 1/3
I asked him why he is wanting to sell " Like I needed to at this point"
he told me that he going into another busness and dont have the time anymore.
Because this guy is trying to dump I will sit and wait.
all's I'm interested in is the contracts. and if he has no time to give the customer. they will dump him and go with someone else. maybe me.
I hope this get's some of your minds to start thinking about all the in's and out's of running a business and how it can become in the red VERY quickly
these are real life issues. and I hope this helps all who are thinking about purchasing an up and running Co.
thank you
For all of you who have had questions about buying a business, I wanted to share a converstaion I had today.
a Guy calls me tells me he's selling out. " he's in my area" I have never met him.
he tells me his business takes in around 70.000.00 a year. it has 2 employees one has his license for sprinkler systems. he has 1 truck a dodge 2500 2 john deer ZTR's
I ash him how much he says around 100,000.00
he said he has 14 res and 8 commerical clients
Ok here comes the fun part..
I tell him that he's in the red and tryign to dump
I ask him, have you declaired the ZTR, he says YES. I ask why? he couldn't answer,
I tell him if he has taken full exzemption on these mowers, then it's time to throw them in the trash. BECAUSE, you should declair them over a 4 year period, at the end of this 4 years they should have 3 to 4 thousand hours on them.
If his 1 employee has a licenses he should be paying hom around 17 to 18 an hour, with that you will have to pay 1/2 in workers comp that brings it to arund 25.00 per hour that's around 50,000.00 a year.
the rule of thumb is you will loose 1/2 of the customers due to new onership.
bringing it to 40,000.00 per year "giving him the benifit of doubt"
he tells me he just bought the dodge truck.
I tell him that these larger trucks are worth nothing, maybe 10.000.00
he says theres 15,000.00 owed on it.
I inform him I just purchased a F250 4X4 for 9,000.00 I told him he's already upside down on the truck.
also this is the wrong time of the year because were winding down here in a few short months, and he has a 2nd employee. paying him 9.00 per hour.
I told him with insurance that's 14.00 and that is 15 to 16,000.00 per year
at 100,000.00 it would take 10 to 12 years to recoop and see a profit.
the 70,000.00 he claimed was before expensies. so operating cost would run that down to 1/3
I asked him why he is wanting to sell " Like I needed to at this point"
he told me that he going into another busness and dont have the time anymore.
Because this guy is trying to dump I will sit and wait.
all's I'm interested in is the contracts. and if he has no time to give the customer. they will dump him and go with someone else. maybe me.
I hope this get's some of your minds to start thinking about all the in's and out's of running a business and how it can become in the red VERY quickly
these are real life issues. and I hope this helps all who are thinking about purchasing an up and running Co.
thank you