buying existing company

Discussion in 'Starting a Lawn Care Business' started by kdurkee, Oct 1, 2006.

  1. kdurkee

    kdurkee LawnSite Member
    Posts: 6

    I'm looking into buying a friends lawn maintance company. It would be 60 resd. and 2 bus. accounts. All new equip. and trailer.
    hustler super z 52" deck
    2 edgers
    2 weed wackers
    1 back pack blower
    ALL NEW!!
    He wants 38,000.
    Just need some advice from outsiders..........Good deal????
  2. cobra5796

    cobra5796 LawnSite Member
    from warren
    Posts: 4

    find out what the equipment is worth and how much each account brings in. Do the math and see if the equipment and the accounts can pay for Your loan and give you extra money for yourself and your bills. Maybe it's worth it maybe not. At least if you do buy the Business you have everything u need plus the accounts.
  3. richallseasons

    richallseasons LawnSite Senior Member
    Posts: 479

    well the equipment alone does not justify the amount he wants, and we do not know what the accounts bring in, do you have that info?

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Spend a 1/4 of that and buy your own equipment. The accounts will be easy to get-- No way that is a good price
  5. mr.we.mow.grass

    mr.we.mow.grass LawnSite Member
    Posts: 47

    Man, do not do it if you what to continue to be friends! Thats way to much, I spent about $20000 for new equipment, 2 used trucks and we are going to finish the year out with 395 accounts.
    just my 2 cents!
  6. thill

    thill LawnSite Member
    Posts: 245

    The replies are right on. Way too much (without even knowing what his revenue or net profit are).

    Price the equipment at 50% 25% or maybe even 20% of cost new. That part is easy.

    Monthy revenue - closely check his books. If he shows a bottom line profit of 15% (that's pretty decent) and he has written contracts. You may want to settle on 3 or even 4 months of gross revenue. I would not pay more than 2months if contracts do not exist.

    Another way to look at it - You can invest a lot less and build up a client base that size in one or two years.

    Good luck
  7. kdurkee

    kdurkee LawnSite Member
    Posts: 6

    he brings in $3500.00 monthly.
  8. kdurkee

    kdurkee LawnSite Member
    Posts: 6

    he brings in $3500.00 monthly with no contracts at this time.
  9. Total.Lawn.Care

    Total.Lawn.Care LawnSite Senior Member
    Posts: 841

    I bring in about $2500 monthly with only about 18 yards, part time right now. I have about $10K in equipment and I already had a truck and trailer. I think the $38K is to much as well. Counting the Trailer, he only has about $13K in equipment (New Prices plus tax). That means that he is charging you 60% of what his accounts are bringing in gross in a year. With no contracts, WAY TOO MUCH!!!

    If it was like 25% of the annual accounts gross revenue, then maybe (about $10K). I would not go more than $20-$23K for the entire deal. Just my .02.
  10. RedWingsDet

    RedWingsDet LawnSite Gold Member
    from Detroit
    Posts: 3,556

    $3500 monthy is like $14 bucks a yard. Dont buy it.

Share This Page