Buying out a solo

Discussion in 'Lawn Mowing' started by Toatlandscape, Aug 31, 2002.

  1. Toatlandscape

    Toatlandscape LawnSite Member
    Posts: 69

    I have been talking with some other solos in my area and they have said they are going to sell. Has anyone bought out a solo and had a good experience? I look at it as a way to increase accounts in areas where I am already. I know there have been many discussions about how to price but I haven't seen anything from someone who has done it. How did you handle payment? did you meet all of the customers first? Did you work with the other solo for a while? It seems like a good deal for both because if he just goes out of business then he gets nothing. If we can work together at least he gets something out of it.
     
  2. tailoredlook

    tailoredlook LawnSite Member
    Posts: 142

    wait for him to close down snag up his customer base and it don't cost you nothing. Buy him out and at 10% of customer base quits because people DO NOT like to be bought and sold.
     
  3. Toatlandscape

    Toatlandscape LawnSite Member
    Posts: 69

    If you wait you may not even get 10% anyway. I don't know about your area but a week can make a difference if you get the job or not. Grass is growing most of the year around here.The customer needs the work done. I just think that the payment is basically for equipment and his customer list. I understand that there will be fall out but the customer does not have to feel like thay have been sold. If the transition is smooth then it is just another guy doing the work. They have to hire someone anyway and I would have the first shot. The Chem-Lawns of the world buy up smaller companys all the time to get the customer base in a particular area. They keep some loose some.
     
  4. Dennis E.

    Dennis E. LawnSite Senior Member
    Posts: 349

    Back in 2K I bought out 2 guys that were working together. I got a ton of equipment plus two nice almost brand new trailers and all the accounts. I got rid of almost all the equipment. There was some $$$ there. I still have quite a few of the accounts. Those have led to a lot of new business which was a nice bonus.
    I jumped on the deal because I knew I could not lose on it.
    Thats the trick.
    I talked with all of the customers by phone as well as sending a mailing to let them know what was going on. The other guys did the same(at my request). Smooth transition with very few problems.
    They were billing on a per service basis at the end of the month.
    (Yes,they were new to this biz ;) )
    I changed almost all to a set monthly price. The ones that were not profitable or a PITA were dropped. Maybe 20% or so that did not stay on the schedule. Thats about normal I guess.
    Everything worked out pretty good in my case but a person has to be careful in doing a buy-out.
    Move slow and think everything thru if you do it.
     
  5. Toatlandscape

    Toatlandscape LawnSite Member
    Posts: 69

    Dennis,

    If you don't mind my asking. How did you structure the deal? Did you pay all up front or spread it out as you made the transition? I know that with the right situation I can make most anyone happy with my service. I have some customers that other guys would not even touch. I have had them for several years they are happy with me and I am happy with them. If the communication is there I can't see the down side.

    Thanks for your input
     
  6. Dennis E.

    Dennis E. LawnSite Senior Member
    Posts: 349

    This is what I did.
    I met with the two of them. Inspected the equipment,took an inventory.(In my head;) ) I went thru the customer list with them to see how theirs would work in with mine. (Location,days that they serviced these people.) Prices and how/when they billed.
    After all this it turned out that one guy's wife worked at one of my commercial properties! Small world.
    The two of them wanted out. The biz was a lot harder than what they expected. We agreed on a price.
    I did half down up front and the other half after I got going with the new accounts. I figured on about a 30-40% drop-off but it turned out pretty decent.
    They had some great equipment that was easy to sell. Good commercial stuff. Fast return on $$$.:D
     

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