buying a company

Discussion in 'Lawn Mowing' started by Wecutgrass, Jan 26, 2012.

  1. Wecutgrass

    Wecutgrass LawnSite Senior Member
    Posts: 660

    I am meeting with a man on sunday about buying his company and i am wondering how i should go about buying his lawn company from him. He is asking 32,500 for all of the lawns, their is a total of 60 lawns that are relatively close to each other. So that means he thinks each one of his lawns is worth 533.00 dollars. The lawns on average make 30 a cut. There would be a bout 28 mowing weeks in a year where i am from so that totals to 840. None of the lawns have a signed service agreement so i told him i would not just pay him 32500 upfront because that would be dumb i could loose 15 lawns then but out all this money. I said that i would give him 10,000 down and then pay him 30% of each lawn until the remainder of the balance is paid off but once a lawn is cancelled i no longer pay him for that lawn. I was thinking 533 dollars per lawn was a bit expensive, i was thinking more around the 400-500 dollar range. What do y'all think? any help would be lovely.
     
  2. luis@NJ

    luis@NJ LawnSite Senior Member
    Posts: 291

    Yes, very smart move don't ever buy a business with accounts and no contract you could loose them all! lol What kind of equipment is he giving you? :confused:
     
  3. Wecutgrass

    Wecutgrass LawnSite Senior Member
    Posts: 660

    there is no equipment involved with the 32,500. that is just for the lawns. he does have 2 walkers a 36 and 42 and some handhelds and a box truck. how much should i tell him each lawn is worth? 475? does that seem reasonable?
     
  4. williams lcm

    williams lcm LawnSite Bronze Member
    Posts: 1,012

    Years back I had a guy wanting to sell his business to me for around the same price. I said no thanks. I went home printed up flyers and business cards. Total cost under $500 dollars. I made it my full time job to hit every neighborhood with these flyers. They were every where. Then I sat back and waited for the phone to ring. Boy did it ring. I had plenty of work and used my relatives to spread the word. My first year was a sucess. Basically I saved myself 30k. This is just the way i thought of it anyway. I did not want to buy any business just because I was never guaranteed to have the customers after I bought it.
     
  5. Quality Cuts PLS

    Quality Cuts PLS LawnSite Member
    Posts: 249

    The accounts should be worth about 3 months gross max. That is way out of line for just accounts. Is it only eow's?, because here we get around 40 to 42cuts per season.
     
  6. Wecutgrass

    Wecutgrass LawnSite Senior Member
    Posts: 660

    eow's? i am not familiar with that term. i figured 4 cuts in may june july aug and sept. totaling 20 then 2 cuts in nov and december totaling 24 and 1 cut in jan and feb totaling 26 then 2 in march april totaling 28. so each account should be worth more around 300?
     
  7. Wecutgrass

    Wecutgrass LawnSite Senior Member
    Posts: 660

    i have 10,000 door hangers sitting in my room and that was my plan before this opportunity came up, i was going to pass out all those. if i passed out all those door hangers to a bunch of neighborhoods and then bought the company also, i would have a whole bunch of lawns, i currently have 33 of my own lawns and i cut my friends 20 lawns who's away at college currently and i am a full time student. i just really want to have a bunch of lawns, if the guy doesn't want to go down to what i want to pay for the company then i just want buy it.
     
  8. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Posts: 10,742

    I talked to tht guy already. None of the yards are on contract. U could take an 1/8 of tht asking price and use it for advertising and get 100 new customers. Its not worth anywhere close to what he thinks its worth. If it was worth so much he wouldn't be getting out.
    Posted via Mobile Device
     
  9. Wecutgrass

    Wecutgrass LawnSite Senior Member
    Posts: 660

    won't***********
     
  10. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Posts: 10,742

    Also where did u get 28cuts from? I'm right accross the bridge from u, we average between 38-43cuts a year.
    Posted via Mobile Device
     

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