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View Full Version : We Made a BIG Decision over Christmas


coastallandscapesolutions
12-27-2004, 09:07 AM
Greetings all,

This Christmas my family and I have been struggling with an issue. On the 17th of December I received an unsolicited offer to buy our business. I had to admit I was shocked when the attorney contacted me. At first I told him no way. He suggested that I take some time to think about it. I agreed.

I spoke to my wife about it and she was feeling the same as me. We built this from the ground up with sweat equity. Coming into the end of this year we won a couple of 3 year contracts with the county and school system. It seems this is what got the buyers attention.

What we realized is that we are working 60+ hours a week and don’t have a lot of freedom to do what we want. So we started really looking at this offer to see if it made sense to us. We started doing the “what if” thing.

What if we turned down the offer:

• Continue to work 60 hours a week
• Employee headaches
• Lack of freedom to spend time together with family
• Stress of running a larger operation
• More income potential

What if we sold:

• Pay off all bills and be debt free
• Time to do what we wanted
• Hunt for new job (job = just over broke)
• No stress from owning a business
• Income?

There was much more in our lists in each category. We spent most of Christmas Eve talking about it while playing elf’s for the kids. The company making the offer is a well established landscape business. I can not release the name… sorry. They are about the same size and the two companies do fit together well. The big difference is that we are much more efficient in our operations thus more profitable. Whether that can be maintained will be up to the new managers.

We did make a counter offer and faxed it to them on Christmas Day. We upped the offer quite a bit (by a $100K) and changed the terms. We re-wrote the non-compete clause and kept one truck and a trailer full of equipment. Additionally, I wanted to hand pick 30 residential accounts, ones that had been with me for years. I also wanted to keep the company name, website, etc. The final item was a guarantee for 24 months for the employees. So basically we sold customers and equipment. I faxed the counter offer back to them late on Christmas day.

On Sunday evening I got a fax accepting the terms. After struggling with this for several days we decided to sell because the kids have no interest in working in the business and we wanted more time to do the things we wanted to do.

So with the stroke of the pen on Wednesday I will once again become a solo operator. This time all of the equipment is paid for as well as my house I just bought in Feb of this year and all 4 kids college educations are paid for. We will be debt free! What a feeling. Get this….. we’ll still have $$$ left over for a rainy day! It is a funny feeling but also a good one. I sat down with everyone that works for us and they are supportive of the idea.

What am I really getting? I am getting “Free Time” back that will allow me to do what I want to do and when. I still am in the industry that I love and with 30 loyal customers whom I have a long standing relationship with. This was a very hard decision. What it came down to what not the $$$ although that had a major impact. What it had to do with is why I originally decided to do this full time. I wanted some freedom to do what I wanted to do and when.

northmichigan
12-27-2004, 09:17 AM
IMHO i think you scored a sweeethart of a deal. the headaches are gone along with the bills. i have a landscape biz like your new one in the sense that all my customers are long standing accounts.i call them my fan club and never try to piss off any fans.it really means you can deliver top quality work to those who appreciate it and enjoy life.
mj

YardPro
12-27-2004, 09:27 AM
congrats.
guess you'll be able to enjoy all those golf courses there now..
i'll have to come down and try a few of them out with you this spring.

what a sweet deal. loads of stress were just washed away.

65hoss
12-27-2004, 09:29 AM
Congrats!! You have been in this business long enough to earn this. I hope everything works out well. Happy New Year!

Richard Martin
12-27-2004, 09:34 AM
Congratulations. I too am planning a change in a few years. I am still up in the air on what to do with my customer list. It is, for the most part, a very good list comprising some of the nicest and largest watefront properties in my area. The potential to upsell a considerable portion of my customers on additional services is great since I only do the mow, blow and go for 95% of them.

Do I try to sell the list or just let them go?

s and s mowing
12-27-2004, 09:36 AM
congrats greenscapes,sounds as if you have it made now.enjoy it and happy holidays.

Team Gopher
12-27-2004, 09:44 AM
Hi CoastalGreenscapes,

Good for you. What ever you do, you have to be happy or what's the point. :)

coastallandscapesolutions
12-27-2004, 09:54 AM
Do I try to sell the list or just let them go?

Your customer base is always worth something. I guess it all depends on the area. What made ours so valuable was the 3 new contracts that we signed in December of this year.

They are also getting a lot of equipment too. I have seen formulas on the value of the lists. What it boils down to is what someone is willing to pay for it and what you are willing to take.

T Edwards
12-27-2004, 09:58 AM
You are now completing the cycle of the "American Dream". You started with an idea, worked at it hard for years, and cashed out while on top. What a feeling !! In '99 I sold my UPS/FedEx stores and became completely solvent. No employees + no bills = a good life. There's a LOT to be said for living at your own desired pace. I know you and your family will become closer and when it is all said and done that's all we really have, anyway. Congratulations on completing the cycle.

geogunn
12-27-2004, 10:07 AM
COASTAL--I think you have just done what many people here would dream of doing! good move!

GEO :)

j fisher
12-27-2004, 10:27 AM
My dream just came true,, for YOU! Congrats!

meathead1134
12-27-2004, 10:33 AM
Good for you, now here is the chance to spend some quality time with the family and relax a little

beransfixitinc
12-27-2004, 12:13 PM
If the agreement allows you to keep your company name, and only transfer over the equipment and some customers, aren't the legal contracts that you just won still enforced on the company Coastal Greenscapes?

Turf Medic
12-27-2004, 12:27 PM
Congratulations, sounds like you made an excellent decision. Too bad there isn't someway to have this thread come up when people start asking how to value their accounts. Might offset some of the "your accounts aren't worth anything" types of comments :D

parkwest
12-27-2004, 12:38 PM
Question:

Isn't that the objective of starting a business? To someday sell it?

I'm curious now what some of you have in your business plan if that isn't the final goal. One of my goals is to take my business public someday. In otherwords, sale it. Curious to see what some of your responses are.

coastallandscapesolutions
12-27-2004, 12:53 PM
If the agreement allows you to keep your company name, and only transfer over the equipment and some customers, aren't the legal contracts that you just won still enforced on the company Coastal Greenscapes?


The attorney (s) are hashing out the details. While I will retain the name the liabilities will transfer to the new owner. The 30 accounts I am keeping are under contract. In the agreement I am stipulating to the transfer of the other contracts.

The new contracts that I signed have a transfer clause in case of change of ownership. I have spoken to the county and school offices and they are ok with the change.

coastallandscapesolutions
12-27-2004, 12:54 PM
Question:

Isn't that the objective of starting a business? To someday sell it?

I'm curious now what some of you have in your business plan if that isn't the final goal. One of my goals is to take my business public someday. In otherwords, sale it. Curious to see what some of your responses are.


Sell it some day or pass it along to your children.

parkwest
12-27-2004, 01:05 PM
Sell it some day or pass it along to your children.
Yes sir. That is what I'm thinking. I know a lot of people who start or buy a business without asking themselves what they are planning on doing with the business once they have it.

impactlandscaping
12-27-2004, 01:06 PM
Congratulations Brian!! You can never replace time..Take the family to Disney World!! I have felt a similar scenario this winter by selling our snow division out this April. I got out just when the market started to destabilize, and I'm enjoying my winter with my family instead of talking to them over a two way or cell phone.Happy Holidays! payup

out4now
12-27-2004, 01:14 PM
Enjoy yourself. Kids won't be young forever so it is good that you will have time to spend with them.

Kelly's Landscaping
12-27-2004, 01:19 PM
That has to be the hardest thing you can do. You spend all your time building it you sweat you have your blood in it then your asked to sell and you have to find something else to do. I hope it all works out for you I know that is something I am not ready for. The very thought has me feeling uneasy so I can only guess what went through your mind as you came to the decision. You showed a lot of people that the bigger you get the more attractive you become to a buyer.

Carolina Cutter
12-27-2004, 01:40 PM
Greetings all,

This Christmas my family and I have been struggling with an issue. On the 17th of December I received an unsolicited offer to buy our business. I had to admit I was shocked when the attorney contacted me. At first I told him no way. He suggested that I take some time to think about it. I agreed.

I spoke to my wife about it and she was feeling the same as me. We built this from the ground up with sweat equity. Coming into the end of this year we won a couple of 3 year contracts with the county and school system. It seems this is what got the buyers attention.

What we realized is that we are working 60+ hours a week and don’t have a lot of freedom to do what we want. So we started really looking at this offer to see if it made sense to us. We started doing the “what if” thing.

What if we turned down the offer:

• Continue to work 60 hours a week
• Employee headaches
• Lack of freedom to spend time together with family
• Stress of running a larger operation
• More income potential

What if we sold:

• Pay off all bills and be debt free
• Time to do what we wanted
• Hunt for new job (job = just over broke)
• No stress from owning a business
• Income?

There was much more in our lists in each category. We spent most of Christmas Eve talking about it while playing elf’s for the kids. The company making the offer is a well established landscape business. I can not release the name… sorry. They are about the same size and the two companies do fit together well. The big difference is that we are much more efficient in our operations thus more profitable. Whether that can be maintained will be up to the new managers.

We did make a counter offer and faxed it to them on Christmas Day. We upped the offer quite a bit (by a $100K) and changed the terms. We re-wrote the non-compete clause and kept one truck and a trailer full of equipment. Additionally, I wanted to hand pick 30 residential accounts, ones that had been with me for years. I also wanted to keep the company name, website, etc. The final item was a guarantee for 24 months for the employees. So basically we sold customers and equipment. I faxed the counter offer back to them late on Christmas day.

On Sunday evening I got a fax accepting the terms. After struggling with this for several days we decided to sell because the kids have no interest in working in the business and we wanted more time to do the things we wanted to do.

So with the stroke of the pen on Wednesday I will once again become a solo operator. This time all of the equipment is paid for as well as my house I just bought in Feb of this year and all 4 kids college educations are paid for. We will be debt free! What a feeling. Get this….. we’ll still have $$$ left over for a rainy day! It is a funny feeling but also a good one. I sat down with everyone that works for us and they are supportive of the idea.

What am I really getting? I am getting “Free Time” back that will allow me to do what I want to do and when. I still am in the industry that I love and with 30 loyal customers whom I have a long standing relationship with. This was a very hard decision. What it came down to what not the $$$ although that had a major impact. What it had to do with is why I originally decided to do this full time. I wanted some freedom to do what I wanted to do and when.


Congratulations!

Sounds like you are already planning to start again by keeping the truck and equipment. Do it again and sell it again and live life to the fullest.

Now.............with all that money...........you can buy me a beer at Spring Bike Week 2005!

rodfather
12-27-2004, 01:49 PM
That has to be the hardest thing you can do. You spend all your time building it you sweat you have your blood in it then your asked to sell and you have to find something else to do.

Not for me it wouldn't be. There isn't a day go by I don't think about selling out.

Find something else to do? Yup..."Fore!!!" :D Almost forgot. Congrats Brian.

Mr. C
12-27-2004, 05:15 PM
Sounds like you have built a great business. Maybe you shuould consider consulting. I'm interested in finding out how you came to improve your effiecency as well as what it took to build your company to where it is currently.

PLI1
12-27-2004, 06:02 PM
Congratulations, you should be proud of yourself!! You have a level head to realize your family is most important. No one has ever said "I wish I would have spent more time at work!" Life is never that easy and to realize when a good thing is staring you in the face is commendable. Best wishes to you and your family and Happy Holidays!!!!!!!!!!! :waving:

Fareway Lawncare
12-27-2004, 07:18 PM
it's a Cop Out...the goal of starting a biz is Not to Sell it .....but to grow it & Pass it On....Selling is Short Term Gain....Selling is Defeat.

There have been some Colossal Winners and Losers when it comes to Selling & Buying business'....& Lots of Regrets & Anger....Hope it All Works Out !

MOW ED
12-27-2004, 07:51 PM
I think you did well and are doing it on your terms.
More power to ya. Enjoy life while you can and those 30 accounts will be your retirement hobby. I envy you and am very glad to hear of your good fortune but you deserve it as it was made by you.
Happy Holidays.

N.H.BOY
12-27-2004, 08:44 PM
COASTAL--- Congrads on your big jump in your life. I hope you will still stay here at Lawnsite because you have helped me out when I read your treads and you have helped many out. So I would like to say Thank You for all of your knowledge of the green industry and you advise. THANK YOU and good luck and hope you still check in with us here :waving: :waving:

TurfGuyTX
12-27-2004, 11:23 PM
Congrats!! I wish you the best on your future endeavors.

coastallandscapesolutions
12-27-2004, 11:45 PM
Thank you for all of your feedback. First, I will still be here. I will probably be here more although I don't think I can hold a torch to BG with the amount of time spent on this site.

I did keep a rig and trailer. Nothing fancy. I kept the 2004 GMC 3500 4X4 just becuase it is new and had only 7500 miles on it. I also kept a 20' enclosed Wells Cargo trailer with 5200lb axles. For a mower I kept the new Model T Walker and a 36" Toro Hydro. Add a 9hp Honda Little Wonder and a pair of FS85's, edgers, RedMax 8000 blowers. There are a few assorted stick tools and spare parts of course. I will go out and buy a Lesco sprayer for the truck in the spring.

Why did I keep the Walker verses the John Deeres, Dixie Choppers? Simple, I can work more residential properties with it. I can bag or not to bag. It has a lift on it so I just back up to the truck and dump it on a tarp in the bed. My house sits on 2.63 acres so I have plenty of room to compost. It is not the fastest of the lot but for me it does more and works better on the 30 properties I kept.

About those 30 properties.... They are all over 5 years strong with me working with them, they all give me a blank check to take care of them. Cost is not an option. Therefore they have the best looking yards here at the beach. When other LCO's solicit them.... they very politely are told no thank you. They are tloyal to me and the most profitable too. Those 30 properties are all within a 7 mile loop. Not a lot of driving. They will keep me busy 4 days out of the week and a good income.

What I won't miss is paying those insurance rates for workers comp. I won't miss my monthly phone call from the unemployment commission wanting to review our payroll records.

I will miss playing with all of the equipment. That A300 Bobcat is a blast and talk about laying down some sod.....

Like I said... I will still be here working in the field. However I won't be "managing employees" anymore. If I want to knock off mid day and have a beer at Hooters then so be it. If I want to jump on the Harley for a 3 day weekend in the middle of the week... I will.

So as I am sitting back relaxing tonight I think I will sleep in tomorrow. :waving:

65hoss
12-28-2004, 12:11 AM
If you want to go fishing...man how I miss those days.

HOOLIE
12-28-2004, 02:04 AM
Congrats Coastal! Hey, now you won't have to worry about that deadbeat that stiffed you for 19k...LOL. I'm coming down there at the end of Jan. to help my in-laws clean-up the little beach house they retired to. If you're bored by then, by all means, bring by a chainsaw, hedge trimmer and misc small tools...that way I won't have to rent...

PMLAWN
12-28-2004, 04:17 AM
WOW! Santa was great to you. Enjoy the new pace of your life and your family. Sound like you made the right desision.
This year "Happy New Year" will have a much better meaning.

coastallandscapesolutions
12-29-2004, 01:13 PM
With a stroke of a pen this morning I became a solo LCO. After signing my name more times then I can count and handing over keys to the yard I received my cashiers check. I learned that it is not how many zeros a check has but the comma's :drinkup:.

Took it to the bank and deposited it. Then purchased a cashiers check for $211,947.53 payable to Washington Mutual to pay off the mortgage on the house that we bought in January of this year. What a feeling. I think I grew a couple of inches with the load off.

Anyway I am solo now. I think I will take a couple of days off and go play since all of the 30 yards I have are done. Funny thing, they were the last yards that were done.... go figure.

Thank you all for all of your comments. They are very much appreciated.

Happy New Year to all!

grass_cuttin_fool
12-29-2004, 01:23 PM
Congraddys to you, I am solo and do about 30 a week and Im on top of the world. Im making a living, and I have time to spend with my family at night and the weekends . 30 yards will keep you busy most of the week but you wont be bored either. Good luck and enjoy

rodfather
12-29-2004, 01:29 PM
Brian, now it's time for your "mortgage burning" party :drinkup:

wojo23323
12-29-2004, 02:18 PM
Cogratulations. My goal is to sell our business by the time I'm 50 and retire for good. That's only 9 more years.

Smithers
12-29-2004, 05:42 PM
I have read many financial books, and believe never to pay off the mortage in full. I dont even add anything extra to my payment....

It's a way to milk the tax deductable dollars until i can.

MANY, MANY people will disagree with me, but having $200K now is worth more than in 30 years. I'd invested that money into something else....not in bricks (my house).

That is of course if you can get a higher interest rate somewhere else.

i am bracing for many outbursts regarding my reply. :cry: :cry:

DGI
12-29-2004, 06:28 PM
Having his house paid off now gives him all kinds of options in the future. It really just depends on what you want to do.

Smithers
12-29-2004, 06:37 PM
i completely agree.....give him all kinds of options......without the money to do it.

let's say he got $212K ( i know he got more, but let's pretend) for the business. He put almost the whole amount toward paying the house off, ok?

Now, all he saved is that $1,000 house payment that he does not have to make for the next 29 years....big deal....$1,000 for 29 years. Can't even enjoy the benefits of tax deduction.

Now concider this......let's say he always wanted to open a dry cleaning business (for example).....but never had the money. Now he sees an ad in the paper for one. Guess what....he STILL does not have the money to jump on that great deal....That's my point.

It's the same thing with the 0% interest credit cards.....I have the money to pay off my debt RIGHT now...but why bother? I might need a bed or a new furnace in a week or two. (i still make my minimum $125/month payments to the credit card - when time runs out, i will pay it off)....he does NOT need to pay it off RIGHT NOW.

THat common misconseption comes from way back in the 1930's during the depresion when the banks WERE ALLOWED to ask for their loan money RIGHT THEN AND THERE.....during times of uncertainties.

Now they can not do that.

just my two cents. :waving:

Evan528
12-29-2004, 06:50 PM
I know holding a mortgage does have its tax advantages but I would have done the same thing. I pay extra every month towards my mortgage because I hate owing someone such a huge amount of money. What a feeling it must be to know that your home is paid for.....no matter what happens and what obstacles life brings, no one can take your home.

Coastal, Let me know if its to personal.... But would you consider really giving us the "low down" about the sale of your business? How much you sold it for? what kind of assets were involved? more detail on the contracts? I know myself and so many others could learn a great deal from that info. With people talking so often about the worth of a Landscaping business im curious to know what exactly your experiences were in selling yours.

DGI
12-29-2004, 07:11 PM
He could just as soon go borrow against the equity.

coastallandscapesolutions
12-29-2004, 07:49 PM
Or I can just reduce the nut I have to crack each month and live cheaply. A mortgage is not the only deduction that one has and a good CPA will greatly help you "channel" your income to minimize your tax exposure.

GrassMaster84
12-29-2004, 08:06 PM
I agree... you made a smart and economical move in the green industry. Your'e hard work definitely paid off.

Richard Martin
12-29-2004, 09:00 PM
What a feeling it must be to know that your home is paid for.....no matter what happens and what obstacles life brings, no one can take your home.

I don't know about where you live but in the 2 counties where I own property you get 6 months to pay your taxes. If you haven't paid by then both counties will auction your house off for taxes due.

richard coffman
12-29-2004, 09:28 PM
that's a good move you made, especially keepig yourself in the industry. i'f i had it my way, i probably would have done it the way you have with your business. but I'm a solo operator and the property's i do take care of make the money come in and feed my addiction of cutting grass. i live in a small house and are able to make my bills and save a little for a rainy day. Mabe if i can keep up the pace as i allways have, I can make my dream come true when I'm older. figure I'll pass my company down to one of my kids when they can handle it and are responsable enough. that's my dream, that and still do this line of work untill i can no longer be physically able. good payoff my friend.

Respectfully,

Richard/Owner :p :p :p

Turfdude
12-29-2004, 09:44 PM
Brian,

A true heartfelt congrats!!

This must have been a difficult decision for yourself & your wife. I admire the way you looked after your employees in the deal too - shows u r a stand-up guy ( not that many of us didn't already know that).

What the nay-sayers here fail to see is ALL of your benefits:
1. You no longer have to work insane amounts of hours.
2. Your family and free-time are greatly increased.
3. Your stree level greatly reduced.
4. Your largest expense paid for as well as kids college tuitions (WOW!!!)
5. The 30 handpicked accounts are long term clients whichif I read correctly mean the following:
a. Your top 10 % of accounts usually account for 45-50% of your gross.
b. These accounts being lon-term, probably give you carte blanche and are probably full service (hence the need for a new spray rig for 30 props).
c. Should you need to upsell, these clients are a great target, they're loyal and shoul they want additional work will want you to do it and will be willing to let you fit it in your schedule.


Dude - you did real well. Should the purchasing company desire a site in south Jersey, have them look me up :waving:

I have 4 years left on my home mortgage (will be paid off at 42 - not too shabby), then I'll be down to the shop mortgage. I hope to sell someday (probably by the time I'm 50-55) and shall invest the money and find some part time line of work I enjoy. Congrats again!!!

coastallandscapesolutions
12-29-2004, 09:52 PM
What the nay-sayers here fail to see is ALL of your benefits:
1. You no longer have to work insane amounts of hours.
2. Your family and free-time are greatly increased.
3. Your stree level greatly reduced.
4. Your largest expense paid for as well as kids college tuitions (WOW!!!)
5. The 30 handpicked accounts are long term clients whichif I read correctly mean the following:
a. Your top 10 % of accounts usually account for 45-50% of your gross.
b. These accounts being lon-term, probably give you carte blanche and are probably full service (hence the need for a new spray rig for 30 props).
c. Should you need to upsell, these clients are a great target, they're loyal and shoul they want additional work will want you to do it and will be willing to let you fit it in your schedule.




You hit the nail on the head!

Little o
12-29-2004, 09:59 PM
Congratulations,

I did the same thing you just did 2 1/2 years ago, it was the best decision from a financial standpoint that I have made. Remorse kicks in once in a while because of all the sweat equity that it took to build the business; in my case 25 years. But it sounds like you were extremely savvy on the way you structured the deal. Depending on how the noncompete clause was worded you really didn't give anything up but the headaches.

Instead of running on the financial treadmill, you have the freedom to slow the speed down and enjoy life. Most people don't have that option and they're two paychecks away from economic destruction.

Doug

Starman
12-29-2004, 10:13 PM
A great story with a great ending. Thanks for sharing.

turfman33
12-29-2004, 11:12 PM
Congrats mate......You have worked hard to build something up. The good thing is that your still in the game that you love.

All the best

Steve