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I kinda "stumbled" into a lawn business this year after being laid off, and now I have an investor who wants to help me grow my business. I currently only have 10 accounts that I use my personal JD 42" riding mower, trimmer, etc. I have met another local business owner who is moving to another state and is looking for someone to purchase accounts from him (45-50) mostly residential, in return he will ride along with me and personally intorduce me to each customer to insure the business and he is willing to sign a non-compete as well. He is asking two mows per account at an avg of $47 per mow.
Now, my investor is wanting me to gather information for start up costs so I have been researching ztr mowers, etc. I have also gotten a bead on a handful of commercial bids as well. What size ztr should I buy? 48,54,60....also what ztr is most dependable and easiest to maintain?
I am located in North Mississippi (just outside of Memphis)....mostly bermuda and fesue grass.
Thanks for any help....
10-13-2009, 10:54 PM
In my personal opinion, if you are having to ask these kinds of questions then you are not ready to buy out another company. The worse thing a person can do is grow to fast and what you are thinking about doing is a huge step.
I would also have to question your so called investor. If he is willing to truly invest he needs to be doing the checking himself…this of course is just my opinion.
Thanks for the advice, but my investor is an old friend who lives far away from here. Usually investors want data and facts and that's what he is looking for, and (in my opinion) that's my responsibility. I am prepared, I have a plan in place to measure mowing ratios for labor and estimating. I was just asking about deck size because I know that there are drawbacks to each one. Also, each mfg brags about how good their products are. I have a connection with the local John Deer dealership, but I have an either better one with Exmark corporate.
You are right, it is a big step, but after 15 yrs in corporate America it is obvious to me that nobody else is concerned with my future so I am prepared to take matters into my own hand.
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10-14-2009, 10:25 AM
I would shy away from buying this guy out. I would try building your own account base by starting with your leads for commercial work. If you live in an area where customers are hard to come by, then you could consider it. Every area is diffrent, where I live accounts are not that hard to get with some good marketing. I seen guys start from nothing in the spring and have 40 yards by the end of the year.
What is a good reason why not to buy him out? I have the cash to do it and his customers have been with him on the average 2.5 years so they are loyal. This area is very saturated with lawn businesses and I get 2-4 flyers a week just at my house alone. The good thing is that the 45 accounts arent too spread out so there is a huge opportunity there to go into these neighborhoods and acquire more business which would allow me to be more efficient in maintaining them by knocking out 4-10 yards at a time.
I do know that there are no guarantees and I dont believe that I will actually keep all 45 of them through the transaction, but based on what I know I do expect to keep 30-35 of them with confidence, and that will affect how much I actually offer to pay him for these. The only reason this guy is selling is because he and his family are moving back to their original home (GA), its not because of the business.
1st class grass
10-14-2009, 12:37 PM
I too would say dont grow to fast.With that said if you are set on doing it I think his asking price per customer is decent..I would hit him with a low offer then met someweher in the middle..As far as mowers go thats all oppinoin.But size wise if your doing residentilas I wouldnt go bigger than a 52 incher probably 48.
Thanks 1st class....its not that I am dead set, but I know most of his accounts and they are good money making accounts, and I hate to pass up on a good deal. I am not going to offer what he wants and I expect to get them for somewhere around 15-20% less than what he is asking. Also, thanks for the ZTR info, and I kinda figured on either a 48 or 52/54" as well. You know, everyone claims that their mower is the best, but I guess there is no "true" way to determine whihc one to get so I guess I will go on 3 basis.....1. price 2. operating ability, and 3. service.
10-14-2009, 01:11 PM
Like others have said, growing too fast can be bad for a buisness. So if you decide to buy this buisness, you need to be set on doing all the work and doing it well. And like 1st class said, try to make a deal when buying it.
Now as far as the ztr goes...a 52" is a good medium, it also gives you more of a trim side than a 48" will. You need to demo all the different brands you are considering and see which one you like the best. You should also determine what dealer is best, that will be very important.
Thanks "mowerbrad"...I know it is a big step and its one that I am prepared to make and all by myself. I also know that I can recruit help if needed in my area and I do have a limit on how much new business I can handle. The suggestion you made as far as the ZTR goes confirms my thinking as well, and you are right about the dealer being very important in my decision.
1st class grass
10-14-2009, 01:35 PM
Mower brad is right about the trim side on a 52 incher. Thats nice to have..You can get alot closer to things which leads to less weed eater time. Good Point Brad.
1st class grass
10-14-2009, 01:38 PM
By the way I had a 52 inch bobcat about 7 or 8 years ago and it was a great machine.The only problem was the clutch went out.It was under warranty.but it still went out.They are a good priced mower and mine gave me great service..
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