Buying an existing business

Discussion in 'Lawn Mowing' started by CheapPete's Lawncare, Jun 8, 2003.

  1. CheapPete's Lawncare

    CheapPete's Lawncare LawnSite Member
    Posts: 4

    Fellow lawn care pros, I'm new to the forum, but have been in the Green business for the past four years. I currently have 40 accounts, but there is a business in my community that is for sale. It has been going and growing strong for the last ten years. My question for the panel is has anybody else bought an existing business and if so how about a little advice on what to look for and look out for. The business for sale has 180 existing accounts and equipment, also a plow business with 70 existing accounts. Thanks for the help in advance!
     
  2. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    Good luck. Purchase the business and watch the accounts dwindle. It happens all the time. Also, this is something that needs to be handled by an attorney, as this guy selling can easily decide to come back in to the business in a year or two, and guess where he's going to go for clientele?
    Bottom line is, build your own clientele. It's not that hard with quality. Afterall,... HE did it!
     
  3. GraZZmaZter

    GraZZmaZter LawnSite Senior Member
    Posts: 740

    Excellent advice Joe. As you know i bought out a local guy, and he is cutting again. Im sure you know him. I wont mention any names ( little red haired bald dude) but i now give him the bird every time i see him....

    So needless to say i have learned alot from the ordeal. I would consider buying out another company again, but would go about it alot different.

    First of all, you need to go around to all these clients he has and see what ones will sign a one year service agreement with you. Show them your work and have some referrals ready if asked. Next, draw up a contract stating that the seller will not get into any type of green industry business for 3-5 years (whatever you feel more comfortable with) Get this paper notarized! Make sure the selling price is decent. Average price per lawn should be 3-6 months gross IMO. And whatever ones wont sign with you ... DONT PAY FOR THEM!!

    Good Luck!!
     
  4. Speedy

    Speedy LawnSite Member
    from Alabama
    Posts: 66

    We just bought a business from a guy about a year ago. It was a well established business. When we got around to the signing of the papers, we decided that we would send out a letter to all the customers explaining what was happening. He had around 40 accounts and I expected to loose about 20% of them. I think we lost 6. I had him sign a paper stating that he would not come back at anytime to do any work for the customers accounts that we bought from him. He didn't have a problem with that.

    One thing to look out for though, is to be sure to get copies of the contracts of the customers accounts that you are buying. You'll find they will tell you old Joe did this and that for me. When you look at the contract that is not listed..

    Good luck, just be careful
     

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