PDA

View Full Version : Is this business worth buying?


twascher
06-20-2010, 08:00 PM
Lawn service for sale.. Truck, trailer, 2 - 54inch exmark mowers all shindaiwa hand tools and 200 accounts.. all accounts are year round, zero per cuts! all accounts are in the same zip code 95% of accounts are in the same sub division. A true mow and go service, leaving all the side work for extra billing ( and there is tons of it ) crew willing to stay for an easy transaction!! will walk away for 75k make more then your money back in the first year:)

CowboysLawnCare
06-20-2010, 08:25 PM
Almost sounds too good to be true with 200 accounts. Are the customers under contract or not. That would be a big deciding factor for me.

twascher
06-20-2010, 08:36 PM
No the customers are not under contract but I did get the seller to agree to going around to each customer prior to finalizing the sale so we could talk with them face to face and explain the company is being bought by another person and getting a commitment on staying with me as long as the work is done just as it has for the past 7 years.

Field King
06-20-2010, 08:45 PM
Get a "NO COMPETE FOR 5 YEAR CLAUSE" in writing from seller, and do make the rounds with him to speak with customers, if you retain 90% of the existing customers you are doing good, negotiate better price for each one that cancels or gives a maybe! Also really focus on the "extra" work on those accounts to make them "value added" like tree/shrub trimming etc.! Check Title to all trucks, equipment, maintenence records, look under decks etc, to help with negotiating a lower price!

topsites
06-20-2010, 09:00 PM
If you have to ask, the answer is no.

Raymond S.
06-20-2010, 09:22 PM
what is the truck, mileage, year, etc. Trailer?, enclosed, beat to death, etc. Hours on the mowers? What is the yearly gross? How big is the crew? What are the wages he pays? What kind of margin has he been operating on in recent years? What's his plan now, retiring or tired of losing money? Lots more questions to answer before you can know if it's worth it or not. With 200 accts. it seems as though you could turn a profit fairly quick but too many unknowns w/ what you posted.

twascher
06-20-2010, 09:33 PM
Thanks for replying Raymond here is some additional info.


The truck is a 93 with 2 years on the rebuilt engine. He invoices 9100.00 a month with weekly mowing, he invoices an additional 1500-2000 in extra work. The enclosed trailer looks brand new and all the inside wood is in great condition with no leaks. Cost per month is 5500.00 that includes employee payroll. He recently started a pest control company running two trucks and says he makes more money per visit but faster turn over of customers so he wants to focus on pest control and not have to worry about the day to day operations of the lawn service. His crew consist of 2 full time guys and today he took me down one of his routes and in one subdivision that has 2 streets he has 40 customers so he keeps his drive time minimal. Also he has had some customers for 13 years and his driver has been with him 7 years.

Field King
06-20-2010, 09:39 PM
Dig deeper, his return seems real good, why is he walking? Pest control? Really? Have u walked the route?

twascher
06-20-2010, 09:46 PM
I havent walked the route however I am going to meet him Tuesday morning and we are going to spend the day talking with each customer so I can make sure they are satisfied with the work the has been done in the past and talk to them about the company being under new ownership if I decide to buy it.

maintenanceman
06-20-2010, 10:21 PM
200 customers and billing $9100 / month for mowing = $45.50 per customer / month. Could be small properties, but it doesn't sound like enough to me. I bet he's loosing money or he would not be selling and would not be driving a 1993 truck. Be careful.

P.Services
06-20-2010, 10:27 PM
200 customers and only 9100 a MONTH !!!! That should be per week! That's insane cheap. How many man hours a week to complete the route?
Posted via Mobile Device

Think Green
06-20-2010, 10:34 PM
I agree with the no-compete clause on your part. What I am reluctant to agree on is the meeting with the customer........200 in one day........HMMM??!! You will be dragging your shirt after 50.
The thing is.........these customers are buying you now and he is leaving for some apparent reason that is not disclosed to any of us. Sometimes a lco will sell off his small route of clients that aren't paying or are in a foreclosure area. Just some irons to pull out of the fire.!!! It could be for any reason he or she is selling off this route, but be assured the customer is the hardest thing to buy. These people do not have to take you on because he isn't under any binding contracts up to a period of the season. Watch your money and your back.

twascher
06-20-2010, 10:39 PM
They are small lawns one strip on each side of the house with a small front and back yard it takes his 2 employees 6-7 mins to complete most of the properties and since 95% in one sub-division they literally can park the truck at the end of the street and take the mower, edger, line trimmer and blower house to house. He showed me a couple of streets this afternoon and one had 40 accounts on it and the other had 27.

Glenn Lawn Care
06-20-2010, 11:01 PM
check his books.

Think Green
06-20-2010, 11:13 PM
If these lawns were in my area, I would hate to see a couple of days worth of rainy weather to come along.
There was a time that we had 125 lawns..........none of which were consistent in size. A couple of days worth of rain........killed a 5 man crew! No windshield time is a blessing as long as they can be consistent on each job...........get in and get out. Quality work at each house. Check the books, his Gross and net profit margins and employee costs,etc.
Go from there.

MnGreen
06-20-2010, 11:17 PM
200 customers and billing $9100 / month for mowing = $45.50 per customer / month. Could be small properties, but it doesn't sound like enough to me. I bet he's loosing money or he would not be selling and would not be driving a 1993 truck. Be careful.


I'm with maintenanceman on this.
$9,100/800 services is only $11.37 a yard (200 X 4 services a month)
2-guys takes (10) hrs to cover those (67) you mentioned.
$762 gross revenue for the day before the butchering starts. Labor, taxes, ins,operations

or $45.50 each a MONTH

dhunterd08
06-20-2010, 11:40 PM
I thought I would chime in, since I am looking at takeing over another business myself.

20 accounts(under contract) that gross nearly 4500 a month + extra work. 2 guys do it in 2 8-10hr days(a week). 01 ext cab sierra 4x4, 400 hr 60 inch super z, 36 husq hydro, redmax handhelds, 16ft open with racks, and no debt. 5500 a month seems crazy to me. I hope that 9100-5500=retained earnings. If that doesnt include taxes, insurance, notes, and other fixed costs, that seems as if it borderlines unprofitable. The administration time/cost for 50 customers is scary to me. Manageing 200 accounts recievable seems like a nightmare.....

PLS-Tx
06-20-2010, 11:50 PM
No way would I want to deal with 200 customers for ONLY 9100.

You should be able to make that or more with half that many lawns.

MnGreen
06-21-2010, 01:31 AM
No way would I want to deal with 200 customers for ONLY 9100.

You should be able to make that or more with half that many lawns.


Remember he stated these lots were what seemed to be smaller then a postage stamp size lot.
My affiliation with a 100 stop business "postage" stamp or smaller generates over 11g monthly.
So the numbers on his (200) are crazy low to even consider I would think.

** these might be a HOA set up that this guy has had and gets due to the low bid ?
** Also if you are not part of the 2-man crew knocking them out, and the 2nd guy working cheap,
you would never turn it in to anything positive. Guy gets sick on you, quits, it rains, what ever else
you are baked with (200) to cover.

topsites
06-21-2010, 01:37 AM
The way I see things, folks don't usually sell their businesses
because (or when) it's raking it in hand over fist.

They sell it because more than likely they're not having too good of a time with it, my opinion.

Especially customers and all, 9100 don't mean squat if it doesn't turn a profit,
you could have a million dollar a week income if your expenses equal 1.2 million it's no fun.

I can see buying some of the equipment.

dgw
06-21-2010, 01:47 AM
it took me a minute to realize the 9100 monthly thing

at first i was thinking 9100 a week, which makes sense

200 customers is alot of headache for 11 bucks a cut

guess he finally figured that out