Boss is selling out, is the price right?

Discussion in 'Starting a Lawn Care Business' started by pistolgripnova, May 19, 2013.

  1. birddseedd

    birddseedd LawnSite Silver Member
    Posts: 2,114

    AH. ok. looks better then.

    price sounds well. would be wroth a couple hundred to have a lawyer write up a contract then. he will think of things we wont neccessaraly know. but as mentioned before. using the company name so customers wont know the change. and no compete. he may find his new venture isnt making money and he wants to get back into it before he goes broke.

    if you do want to change the name i would do it over 4 years. keep the same name the first year. combine the name for a couple years, then just the new one.
     
  2. birddseedd

    birddseedd LawnSite Silver Member
    Posts: 2,114

    I think its standard for a non compete agreement to be for 5 years btw.
     
  3. pistolgripnova

    pistolgripnova LawnSite Member
    Posts: 13

    Ahh good info. much appreciated.
     
  4. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,276

    Well if they were all biweekly you'd be making about $33 a cut and I could tolerate that I suppose. But you ruined that thought by stating a good number are weekly which most likely means half or more. So realistically 90 weekly 60 bi weekly add them together thats 120 a week for 4.2 weeks a month now you have an average of $19.84 per cut. Id need more info but I can not see those numbers growing to even an average of $25 which is way to close to the margins for my tastes. Is he even showing a profit? Also the extra work would not find it's self in my calculations for value at all. If you want to count it then divide it by the number of working months and add it to the lawn income and you will have a number of like 12k in income per month and thats about all I would pay for that. And thats only if the lawn numbers are not as bad as it looks from here.
     
  5. birddseedd

    birddseedd LawnSite Silver Member
    Posts: 2,114

    You could ask him for a few profit loss statements. typicialy if someone is inquiring to buy a company, esspicialy if they are not already accuanted they will write a letter of intent to the company. the company would respond with a few profit loss statements showing exactly what was spent on what and how much they had in gross sales.

    if i were you i would sit down and crunch the numbers. his fustrations may be because he is lowballing on the price. charing 15-20 when he should be charging 25-30. Sure you get clients, but your profit margin is so low that you are making no more than your own wages.

    crunch the numbers. see what you are actually making. be sure the prices that you will have to honor if you want to keep the customers are worth it.

    keep this in mind also, because i will not crack on someone that offers competitive pricing to bulid a business. if there is enough profit in this to be worth it. you can always add new customers at your own pricing. even if the profit margins are small. 10k a month sure is past much of hte hard part of building from the ground up.

    oh... just realized something. make sure you get HIS phone number with the sale. he has built a brand. and that brand is tied to his phone number. so whatever number refferals are calling needs to be your number. this is very important. when sprint tried to steel my number (you own your phoen number, by law carriers cannot refuse to release it even if you owe them money, sprint is natorious for this, fcc form 2000 aprox. will force them to release it).
     
  6. birddseedd

    birddseedd LawnSite Silver Member
    Posts: 2,114

    i bid on a 175 foot private drive (plowing). they already had a 10 dollar bid and was hoping i would do it cheaper. that was so annoying... believe i told them 75
     
  7. WiscoBest86

    WiscoBest86 LawnSite Member
    Posts: 33

    A good way I have found to figure these deals is - equipment is worth what its worth and the accounts are worth about 10% of their yearly value. That is to say if the clients are staying, how long are they contracted and do the contracts transfer to you when he leaves. One time jobs are hard to value, you wont get them back but a good company can estimate how many they might get every year. I would not value these very high. Long term transferable agreements are always more valuable. Having worked for him is a great insight into the workings and value but remember it gives you some disadvantages also. It will be harder to press him for a better price and criticize the things that take away value from the deal. You wont be an employee you will be an owner and with that step up you have to think about your business. You have to get a good deal to make it a good deal if you know what I mean. I was in your exact situation and ended up passing on everything, opening my own shop and surpassing what i would have made very quickly. It was a hard choice but it just wasnt a good deal for me. Hope I helped.
     
  8. PaperCutter

    PaperCutter LawnSite Bronze Member
    Posts: 1,938

    pistolgrip, where are you located?
     
  9. pistolgripnova

    pistolgripnova LawnSite Member
    Posts: 13

    Well boys, I know its been a long time since this thread started but I ended up buying the company and ALL my free time disappeared. It has definitely been a fast and furious learning curve but things have worked out ok in the end. I luckily was able to retain 98% of the accounts and then had 20% growth over the course of the season so things held together better than I was expecting. I have learned more than I wanted to about preparing for the worst, the first month it was mine the zero turn croaked on me...ahh the joys of owning your own business. Thanks to everyone for your input, it helped a lot having the opinions of many far more experienced than myself.
     
  10. Middle Tennessee Lawn

    Middle Tennessee Lawn LawnSite Member
    Posts: 220

    I have to comment on this could not help it you really think 15k is a lot of cash really!!
    Posted via Mobile Device
     

Share This Page