Buying another business, what do you think?

Discussion in 'Starting a Lawn Care Business' started by Oasislawnman, Nov 10, 2007.

  1. Oasislawnman

    Oasislawnman LawnSite Member
    Posts: 22

    I am in talks with someone to buy their business. They have 22 accounts and they generate about $36,000 a year in business. He has a Toro 62 inch Z-turn that he bought in 2000, he has a 7x14 non-enclosed trailer, 2 older riding mowers, 2-21 inch push mowers, 2 weedeaters, 1 edger, 2 hedge trimmers, and a blower. The equimpent is rather old. He is asking $15,000 for it.
    He will give 2 months of consultanting.

    What do you think?
     
  2. WeeDr

    WeeDr LawnSite Member
    Posts: 23

    All that stuff is old, and will probally break on you very soon. For 15 K you could go get all that stuff new! or really close to it. Now you wouldn't have the 22 accounts, but it is only 22 accounts. With a few hard days of walking flyers you could pick up that many imo. Maybe offer 7.5K for it and see if he'd come to 10. But I'd try to pick up more accounts and start saving money to buy new equipment and sell that off piece by piece as you replace them. Also a 62" ztr is real big, I mow my yard that is 20 acres with a 60" I wouldn't even load that on my triler because I would never or hardly ever use it unless your mowing more than 2+ acres.

    WeeDr.
     
  3. lifetree

    lifetree LawnSite Fanatic
    Posts: 5,369

    I have to agree with WeeDr., it sounds like old equipment and for the same money you could get new equipment ... the price seems way too high !! Concerning the accounts, generally speaking, don't pay more than $ 100 per account, some say $ 75.
     
  4. All Season Bill

    All Season Bill LawnSite Member
    Posts: 158

    Be careful of buying lists. If they're loyal to the old company they might cancel the services with a new company. I know, I bought a guys list and almost all of them canceled.
     
  5. cpel2004

    cpel2004 LawnSite Bronze Member
    Posts: 1,415

    My rule is I never buy package deals. If Im buying accounts then I want to know exactly what Im paying for the accounts. Ask him to seperate the accounts and then you have a better understanding on the breakdown of the business. Keep in mind as with many LCO not all of there accounts are going to be the "perfect customer". So out of the 22 count on losing 5-7, from the remaining you will have some PITA's so what are you really buying? Give me 10k and 5k for expenses and I will get you at least 30-40k customers in one month? Let me know? So that will cost you 430 per customer so that will be 3-4 months worth of income.
     
  6. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    to be honest it sounds too good to be true
     
  7. Oasislawnman

    Oasislawnman LawnSite Member
    Posts: 22

    Thanks guys for responding. I have been gone all weekend camping with the family. I already have equipment, I don't actually need it, I could sell it off. Probably worth about $4-5000.

    Bohia, were you joking or are you serious about it "being to good to be true" because you would be the only one who thinks it is a good deal and I was just wonderng your reason?


    thanks
     
  8. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    no. I was Dead seroius. true I'm useually the one that stands out from the croud, guess that's Y everything I touch turns to gold.....

    in the lawn care business, It's about the only business you can turn a profet from day 1, lets face it almost everyone has a lawnmower. even if u had to go purchase one. what r we talking 300.00, and a little gas.... with in 1 week u will be winning.....

    that's Y so many childern do it... they find out early that lemonaid stands dont pay....

    so being it's this way, u can invest very little.
    I belive you stated 15,000.00 .........from the looks of it. " if all's accurate"
    you can have this back plus with in 3 to 4 months......
    My friend, there is NO other business you can do this in.... You just cant.
    What I mena by Plus...is because when you start you WILL pick up other customers, and when June and july hit,,,,you will be begging for people to help you.... you will quickly be turning down work.

    I'm assuming that you can put him off untill the holiday's, there is NO way I would go for it untill the last of JAN or into Feb.. nothing will be moving untill after that anyway....


    as for the equiptment, dont plan on selling it, if you do you will have a false sense of security, plan on keeping it, and using it as the co. grows, and if the right situwation comes up sell it, here and there.

    the government recomands to have enoulf money NOT to make a penny for the 1st year, this is why it's a GREAT deal, you will be free and clear with in a few months, putting you 8 to 10 months jump on government programs,

    Good luck and keep us informed
     

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