Buying a business

Discussion in 'Lawn Mowing' started by fredski119, Feb 8, 2008.

  1. fredski119

    fredski119 LawnSite Member
    Posts: 42

    I would like to knyow what you guys think of this. Iam looking to buy a lawn care business for $15.500 24 accounts and a walker mower. The owner said he brings in $17.000 just in lawn cuts. $5.500 for the mower and $10.000 for the accounts does this sound okay or not any input would help Thanks .
     
  2. cpel2004

    cpel2004 LawnSite Bronze Member
    Posts: 1,415

    Way over priced dude, I got some accounts i'll sell you.
     
  3. RGM

    RGM LawnSite Senior Member
    Male, from Baltimore Md
    Posts: 979

    A lot of guys try to get that big money for there lawns but they usually don't. I hate paying for lawns does he have contracts how long are they whens the last time he raised prices. Need a lot ore info
     
  4. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Im the first one to argue that many lawn business are worth much more than most people claim on here.

    However in this case, its way over priced.

    24 accounts are worth about 2 months gross.

    The percentage he wants is more appropriate for a turnkey larger operation
     
  5. ACA L&L

    ACA L&L LawnSite Bronze Member
    Posts: 1,108

    24 accounts $17000.00 or 1700.00 or 17.00
     
  6. N.H.BOY

    N.H.BOY LawnSite Bronze Member
    Posts: 1,604

    Yea this is funny, I had to look again at his price;) 8 weeks of service for price and maybe a year or two contract with customers. All you know he can get them all back at the end of season...
     
  7. bigw

    bigw LawnSite Bronze Member
    Posts: 1,540

    Those accounts would go for 10% of the yearly gross or 3 cuts each where im from and not a penny more!
     
  8. jeffex

    jeffex LawnSite Bronze Member
    Posts: 1,933

    24 accounts are worth about $700 a year gross each according to your #'s
    I think $5-7,000 is more than fair for the accounts and the equipment is up to your judgement. the more accounts in the business you purchase can attract a higher price but at only 24 it is part time at best. get a non-compete signed by the seller and sign a non-disclosure form your self before looking at the lawns . this protects both parties from stealing customers before or after the sale. Meet with the customers under the prospect of taking over the accounts and get a read for customer retention. if you need a white lie to tell them about a partnership or whatever it doesn't harm the customer. it is just a way to get a look see without too much suspicion on the customers part. be prepared to sell yourself to them and ask about a contract but don't make it a sticking point. There is NO guarantee and judge your retension rate of the customers for yourself. not many residentials are under contract but the sale can still be trusted if handled properly. My only experiece at this is helping 2 people sell their business. Judge the seller on his/her trustworthyness. let the price you pay reflect retention of customers because equipment is easy to get.
     
  9. lifetree

    lifetree LawnSite Fanatic
    Posts: 5,369

    This sounds a little high to me ... I was thinking about $ 3-4 K for the accounts. The price on the Walker sounds good though !!
     
  10. brucec32

    brucec32 LawnSite Platinum Member
    Posts: 4,403

    If you can't go out and generate $17,000 in annual sales yourself in about a month, you're probably not cut out for self-employment, since you'll continually be needing new customers to both grow and also just to replace customers lost to attrition, which can be fairly high. Even if the $17,000 figure is net after expenses, that is not very hard to achieve if you have anything on the ball at all. If it's so hard to find business in your area that you need to pay 100% of sales for accounts, that's a clue this isn't a great business to be in in your area.

    Any business that small is unlikely to have audited books. How do you know the accounts are there and if so, are they any good? How do you know how long each job takes to complete vs the revenue generated? How many were his customers because they liked him and will rebid the job as soon as he's out of the picture? How many were total PITA's? You could be buying a pig in a poke.

    The accounts are worth closer to $1,000 than $10,000.

    Think of it this way. You could pay yourself that much in salary (less some expenses) to do nothing but place ads, flyers, door hangers, make sales calls, and give estimates for a few months and still be ahead.

    I restarted my business here in '05 and added 40 accounts in about 2 months running a couple of classified ads in local papers. It's not my favorite thing to do, but it's not hard if you know your stuff. If you don't, go work for someone until you do. It'll be cheaper in the long run.
     

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