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View Full Version : how to sell/ split a business


bigmower5560
01-12-2010, 09:39 AM
well i have been doing this for 5 years now, started out as part time with my business partner and for the last 2 years have done it full time. And you know what they say about partnerships... the rate of splitting up is worse then the divorce rate! The reason why i want to get out is not because i can't stand the guy, but just cause he is lazy and doesn't do as much as he should. I'm the guy that finds the work, does over 50% of the work, and does all the office work and it's just not working this way...
Any ways i'm looking at getting another part-time/hopefully full time job. I don't want to get out of lawn care incase this job doesn't work out so i want to keep a days worth of work for my self to pay the bills.
So my questions for those of you who have sold or split a business...
How do you value your business? I find it hard to value a particular account and nothing is guaranteed for the coming year at this point.
I've heard of doing your gross profit for three years... but in the lawn industry that seems impossible.
The other problem is that there is little chance of him getting any money to pay me for my share and i think he will run the biz in the ground so i need what im going to get right away.
For those who have split up, how did you do that? I don't want all the equipment... just enough for me to keep going on by myself... I was thinking a mower, dump trailer, and your new holland tractor so i can dabble in a little of everything. Any input would be great!!!
Thanks!

ALC-GregH
01-12-2010, 10:15 AM
Two words, "good luck"....

bigmower5560
01-12-2010, 01:13 PM
Two words, "good luck"....

thanks, but could use a little more help than that.

sehitchman
01-12-2010, 01:21 PM
Does your partner want to stay in the business or get out. I would offer him 1/2 of the value of equipment and leave it at that. If he wants more, do the following.
If he is staying in, split the accounts by mowing areas and put them in a hat. Keep track of the dollars by account and attempt to keep the areas equal. Flip a coin to decide who picks from the hat first.
Establish value of equipment. Split it into Mowers, handhelds, trailer, etc. Flip a coin to decide who gets to choose 1st. Start with mowers then work down the list. Then keep track of the value and when someone hits 50% they are done picking. Shake hands and walk away. Then 4 weeks into the season, contact the people on his list and offer to do their yards. By then he will have disapointed them enough that they will start with you.

bigmower5560
01-12-2010, 01:25 PM
Does your partner want to stay in the business or get out. I would offer him 1/2 of the value of equipment and leave it at that. If he wants more, do the following.
If he is staying in, split the accounts by mowing areas and put them in a hat. Keep track of the dollars by account and attempt to keep the areas equal. Flip a coin to decide who picks from the hat first.
Establish value of equipment. Split it into Mowers, handhelds, trailer, etc. Flip a coin to decide who gets to choose 1st. Start with mowers then work down the list. Then keep track of the value and when someone hits 50% they are done picking. Shake hands and walk away. Then 4 weeks into the season, contact the people on his list and offer to do their yards. By then he will have disapointed them enough that they will start with you.

must be nice to live in a perfect world.... just kidding. yes, i forgot to mention, he wants to stay in the business and he would take all the accounts and equipment if he could, but he doesn't have the funds or the credit to get a loan from the bank... so we basically have to split everything.

xclusive
01-12-2010, 01:26 PM
Does your partner want to stay in the business or get out. I would offer him 1/2 of the value of equipment and leave it at that. If he wants more, do the following.
If he is staying in, split the accounts by mowing areas and put them in a hat. Keep track of the dollars by account and attempt to keep the areas equal. Flip a coin to decide who picks from the hat first.
Establish value of equipment. Split it into Mowers, handhelds, trailer, etc. Flip a coin to decide who gets to choose 1st. Start with mowers then work down the list. Then keep track of the value and when someone hits 50% they are done picking. Shake hands and walk away. Then 4 weeks into the season, contact the people on his list and offer to do their yards. By then he will have disapointed them enough that they will start with you.

:laugh::laugh::laugh::laugh::laugh::laugh:

sehitchman
01-12-2010, 01:37 PM
Sounds like neither of you have the funds to pay the other guy and walk away. Do the account and equipment split as I suggested. If you have to much to handle by yourself, get a good helper or sell the accounts and equipment to another LCO. If you wait for this guy to pay you over time, you will never see the money. I'd take the equipment and run, then you at least have an asset you can sell.

bigmower5560
01-12-2010, 01:42 PM
Sounds like neither of you have the funds to pay the other guy and walk away. Do the account and equipment split as I suggested. If you have to much to handle by yourself, get a good helper or sell the accounts and equipment to another LCO. If you wait for this guy to pay you over time, you will never see the money. I'd take the equipment and run, then you at least have an asset you can sell.

well if i wanted to buy him out i could... getting the money on my part isn't the problem... i have a college degree and did this to get through school. I don't want to do it forever. I only want a hand full of accounts because i like the work, but don't want to do it for a living. That is the biggest part of why i am getting out, too much work, and not enough reward. My business partner is a big part as well, but the main thing is i just want to move on to bigger and better things.

MnDLawn
01-12-2010, 03:10 PM
Two words, "good luck"....

Did the partner thing once, never again. I too wish you "good luck" your going to need it. Find yourself a good lawyer, and act fast.

santafe
01-12-2010, 03:27 PM
if you're asking what the business is worth, I have done a little of that research here on LS. I would say it is worth the value of the equipment plus two months worth of billing.

bigmower5560
01-12-2010, 05:56 PM
if you're asking what the business is worth, I have done a little of that research here on LS. I would say it is worth the value of the equipment plus two months worth of billing.

ya i think a 2 months of billing is probably a good way of doing it.

MarkintheGarden
01-12-2010, 07:26 PM
If you are just splitting things up, then each of you takes one half of all the accounts.

You can get a third party, someone who you both trust to make decisions on disputes.

tilawn
01-12-2010, 07:40 PM
ya i think a 2 months of billing is probably a good way of doing it.

Yeah give the gross sales for the months of January and February!!!!
Since you are from the midwest and probably do not do snow removal that would be the best for you anyways:):usflag:

bigmower5560
01-12-2010, 08:23 PM
If you are just splitting things up, then each of you takes one half of all the accounts.

You can get a third party, someone who you both trust to make decisions on disputes.

i don't want half of everything... i want to eventually move on to different things. I want to dabble in it, but not full time... none the less, i want enough accounts that i can make about $500 extra a week. Or less than a days works a week.
The problem is I want about 1/3 the equipment and 1/8 the accounts, but i don't think he will have the money to buy me out...

MarkintheGarden
01-13-2010, 12:15 PM
Bigmower, I see that your partner is not reliable to carry his share of the work, and cannot be counted on to buy you out, so you have a complicated situation and there are so many variables and factors in any deal of this nature that it is hard to offer suggestions, but here are some more;

Take half of everything and then sell off what you do not want to others.

Sell the entire business and you and your partner split all proceeds.

Replace your unwanted partner with one or two new partners (people who will hold up there end of the workload).

Buy out your partner and hire some good people.

Whatever you do, do not carry your partner through another season, that might be the worst deal you could get.

exclusive contracting
01-13-2010, 06:00 PM
hey bro i actually just went threw this what equipment do you have is there things that are alot more then others and divy it up or if you have funds just give him the equipment and you take all the accounts and go buy new equipment they are running good deals right now and find a good worker.