Buying Business ??

Discussion in 'Lawn Mowing' started by Cutman007, Sep 21, 2006.

  1. Cutman007

    Cutman007 LawnSite Member
    Posts: 81

    What about this scenario?
    Buying a 20 year (same owner) Company with est. 100 Res. accounts,Truck, closed trailer and equipment. (Truck & equip in good cond.) Gross income $8,000 a month for $40,000.. OK, you loose some cust. & the guy threw in a little BS..and your gross is $7,000 a month..now you get a loan for the 40k and pay $400. a month on the loan and $1,500 for a helper. after expences you make between 3-4 grand a month?
    __________________
     
  2. Cutman007

    Cutman007 LawnSite Member
    Posts: 81

    Sorry, might have posted question on wrong thread..Still learning :)
     
  3. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    if that ain't a pipe dream I don't know what is :laugh:
     
  4. MarkintheGarden

    MarkintheGarden LawnSite Bronze Member
    Posts: 1,072

    How much do you think the equipment is worth, then you will know what you are paying for the accounts and the rest. Take a look at his books, are you going to be able to pick up the ball and run? You should probably expect to pay more than 400 on a 40 k loan.

    If you do buy this business make sure find out exactly what he did and how he did it. Those customers are gonna want exactly what he gave them as far as service.
     
  5. MudslinginFX4

    MudslinginFX4 LawnSite Bronze Member
    Posts: 1,170

    3-4k a month profit? I think ill go do something else.
     
  6. dvmcmrhp52

    dvmcmrhp52 LawnSite Platinum Member
    from Pa.
    Posts: 4,205

    A $40,000 loan for ten years is closer to $500/month than $400/month.

    You'll be lucky to come out with $3000/month.

    Why do you want accounts that average $80/month?

    Go work at Mcdonalds.
     
  7. lawnwizards

    lawnwizards LawnSite Silver Member
    Posts: 2,434

    another thing, it would be hard for 2 people to cut 100 yards every week. it would get old real fast.
     
  8. Cutman007

    Cutman007 LawnSite Member
    Posts: 81

    Thanks Mark,
    The equip includes a 1 yr old rider (cost 5k) is worth $15,000 and the accts would be 25k. I'm going to keep the Co name and the helper that dose all the trimming and edging. The seller is going to stay around for a month. The scenario i posted is "worst case". I'm not going to pay him all at once and if he works the route with me for a month and the people pay with out any problem is good along with seeing his books. A lot of the cuts are in same neighborhood and each house takes about 1/2 hour to cut every 2 weeks= est. 50 homes a week. This is Florida and believe it or not i enjoy working 5-6 hrs a day. As for the loan goes, I'm the lender :) HAGD!
     
  9. Cutman007

    Cutman007 LawnSite Member
    Posts: 81

    The decision i need to make is to buy existing business and make money from the start or buy cheap equipment and hit the bricks with flyers, door-knocking, newspapers, website etc. That said, I don't low-ball to steal work from other guys..:nono:
     
  10. lawnwizards

    lawnwizards LawnSite Silver Member
    Posts: 2,434

    like you said earlier, you need to look over this guys books. $8000 gross on 100 customers sounds cheap. also, why is this guy selling? is it because he has 100 pita's. you need to investigate this thing to the hilt before you make any decisions. you could end up with a bad taste in your mouth. my .02

    randy
     

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