Register free!
Search
 
     

The Green Industry's Resource Center


Click for Weather
Reply
 
Thread Tools Display Modes
  #1  
Old 02-05-2006, 01:31 PM
JD GROUND SERVICE LLC JD GROUND SERVICE LLC is offline
LawnSite Member
 
Join Date: Feb 2006
Location: Arnold, Missouri
Posts: 22
Buying another lawn Co.?

A guy I know has around 35 accounts (NO CONTRACTS). Hes probably got around 30000 in equiptment including his 2001 F350 v10 dually stake bed truck. Asking 50,000 for it all, again nothing in contracts. How would you look at this , too risky or what. My partner and I were thinking 40,000 but might not be worth the risk. Thanks for any info.
Reply With Quote
  #2  
Old 02-05-2006, 01:41 PM
Jpocket's Avatar
Jpocket Jpocket is offline
LawnSite Silver Member
 
Join Date: Jul 2004
Location: Upstate New York
Posts: 2,250
I'd give him whatever the truck and equipment is worth, and give him a few extra$$$ to take you around and intoduce you to the clients AND draft a letter to them. say like $1,000
__________________


Chevy trucks, Exmark Lazers, enclosed trailers.
Reply With Quote
  #3  
Old 02-05-2006, 01:48 PM
Soupy's Avatar
Soupy Soupy is offline
LawnSite Gold Member
 
Join Date: Mar 2002
Location: IL. (St Louis Metro)
Posts: 3,128
First off, do you think the equipment is worth $30,000 to your operation? Do you need it?

Since there is no real industry standard for pricing it could be hard to say what those 35 lawns are worth. Do they fit in with your pricing?

The real question is. How much would it cost you to obtain 35 equally profitable lawns? That is what they are worth to you.

Then you need to ask yourself if you need the equipment. I understand you may need to throw another crew together to service new lawns. But do you need that equipment. Can you put together a cheaper more efficient setup.

You then balance the above questions to determine what the company is worth to you. I would say it's worth more to a new start up looking for a foot in. To an established company it might be easier to just market for 35 new lawns and buy the appropriate equipment.

None the less, you should make an agreement to purchase each account separately. If it cost you $200 for every new customer you gain, then that is what you should offer. Lets say you offer $7,000 for 35 clients. For every client that does not give you a fair chance of keeping them then you would deduct $200 from the $7,000.

The above is just an example. Use whatever your cost per customer is. Don't forget your time as an expense.

If I was lucky and it does cost you $200 per customer and you did need/want the $30,000 in equipment. Then I would say the company is worth $37,000 to you. That doesn't mean it isn't worth more or less to someone else.
__________________


I use Gopher Billing & Scheduling Software
Download your FREE fully functional 30-day
trial here.
Reply With Quote
  #4  
Old 02-05-2006, 01:59 PM
Soupy's Avatar
Soupy Soupy is offline
LawnSite Gold Member
 
Join Date: Mar 2002
Location: IL. (St Louis Metro)
Posts: 3,128
Quote:
Originally Posted by Jpocket
I'd give him whatever the truck and equipment is worth, and give him a few extra$$$ to take you around and intoduce you to the clients AND draft a letter to them. say like $1,000
Those 35 clients are worth more then $1,000 if they fit your pricing. If you have some magical marketing plan that obtains 35 clients overnight for $1,000 then I want to know about it.

I do agree that they are not worth $20,000.
__________________


I use Gopher Billing & Scheduling Software
Download your FREE fully functional 30-day
trial here.
Reply With Quote
  #5  
Old 02-05-2006, 06:03 PM
Metro Lawn's Avatar
Metro Lawn Metro Lawn is offline
LawnSite Silver Member
 
Join Date: Nov 2003
Location: St. Clair Shores, MI
Posts: 2,090
As a rule. We buy accounts without contracts for the sum of 2 cuts. ie: average lawn $30.00 x 35 customers x 2 cuts is $2100. We double the price for those with contracts or $4200.00.
__________________
Metro Det. Landscaping Inc.
St. Clair Shores, MI - Lexington, MI
(586) 563-3990
Lawn Service Divisions
Warren - Harrison Twp. - Detroit - Lenox - St. Helen
(586) 634-2904 (313) 885-9090 (989) 443-4380
Reply With Quote
  #6  
Old 02-05-2006, 10:24 PM
Jpocket's Avatar
Jpocket Jpocket is offline
LawnSite Silver Member
 
Join Date: Jul 2004
Location: Upstate New York
Posts: 2,250
Quote:
Originally Posted by Soupy
Those 35 clients are worth more then $1,000 if they fit your pricing. If you have some magical marketing plan that obtains 35 clients overnight for $1,000 then I want to know about it.

I do agree that they are not worth $20,000.
Give me $1,000 and I will get 35 new clients in MY MARKET, if not close to it.

I got close to 20 last year, and it cost me just over $400.

NOT OVER NIGHT THOUGH lol!
__________________


Chevy trucks, Exmark Lazers, enclosed trailers.
Reply With Quote
  #7  
Old 02-06-2006, 01:45 AM
lawn_pro lawn_pro is offline
LawnSite Senior Member
 
Join Date: Jan 2005
Location: Lincoln, NE
Posts: 284
$30,000 in equipment for 35 accounts?? no wonder this guy wants out.
Reply With Quote
  #8  
Old 02-06-2006, 05:47 AM
Richard Martin's Avatar
Richard Martin Richard Martin is offline
LawnSite Fanatic
 
Join Date: Mar 2000
Location: Greenville, NC
Posts: 14,509
Quote:
Originally Posted by lawn_pro
$30,000 in equipment for 35 accounts?? no wonder this guy wants out.
Have you priced a Ford F-350 V-10 dually stake bed lately? They ain't exactly giving those babies away. A friend of mine bought a used F-250 V-10 extended cab last year for $27,000.
__________________
Serving Greenville, Winterville and Ayden NC



Reply With Quote
  #9  
Old 02-06-2006, 09:33 AM
meets1's Avatar
meets1 meets1 is offline
LawnSite Gold Member
 
Join Date: Feb 2004
Location: NW, Iowa
Posts: 3,625
I have bought out other LCO's. I viewed as a way to expand RIGHT NOW but the money has to be there in order to make things work. Right now - only thing I would do differently would be to dump his equipment ( if it isn't much) you don't want to pay for junk, run a year with it, nickel and dime it to get by and then justify to upgrade. I have yet to retain 100% of cliental. I think it stems from there happy with past LCO but now is a good time to jump ship to someone else or simple start doing this service themselves.

40K is sounding steep - actual value of the FORD is unknown to me. If that truck is worth $25K, I would offer him 25K for truck, $2400 for accounts, $2600 good will - totaling $30K. I am assuming all accounts are res. not 15 acre commercial accts?
Reply With Quote
  #10  
Old 02-06-2006, 10:45 AM
freddyc freddyc is offline
LawnSite Senior Member
 
Join Date: Jan 2005
Location: Western Ma
Posts: 579
The substantial amount of the business cost is to buy the truck. You can buy a truck anywhere. Unless you have no equipment yourself, adding on a $30K debt (or purchase) just to maybe get 35 lawns sounds wrong to me. You're in lawncare, not the used car business.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 01:06 PM.

Page generated in 0.10110 seconds with 7 queries