buying someone elses business

Discussion in 'Business Operations' started by Jerry and Sons, Jul 20, 2006.

  1. Jerry and Sons

    Jerry and Sons LawnSite Member
    from Pa
    Posts: 249

    Just bought another guys business to add to mine, but I have hit a snag I bought 58 mowing accounts. Some of the accounts I have come to find that some of these homes are for sale. This was a very quick transaction so I did not have time to look at the properties. How should I confront the previous owner?
     
  2. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Chalk it up as a learning experience

    If the cash is exchanged ... a quick talk too check the waters ...see if he'll kick some back otherwise ....

    If you have a decent sales contract with such terms covered ...court maybe next

    If it was just a handshake .... I'd say you maybe sol
     
  3. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    now you know why he was selling.
     
  4. Sandgropher

    Sandgropher LawnSite Senior Member
    Posts: 909

    You could talk to the privious owner, if no joy try and get the people that buy the homes as customers.
     
  5. Waterscapes By Design

    Waterscapes By Design LawnSite Member
    Posts: 237

    Definately say something to the guy who sold them to you, all in all though, it truly was your fault for rushing it. You have 58 new accounts though weigh the pros and cons of the transaction i.e. How much did ya pay for them, how many are actually for sale. If you lose 10 of the 58 but you only paid 4k for all of them dont sweat it (but still say something to the guy!) You will definately make the money back in no time (again all depending on how much ya paid for them).

    And just like Sandgropher said " wait for them to be sold and pick the new houses up as customers as well"!
    Another good thing in the new accounts you will pick up is you already have an idea of how much you may need to charge them to cover cost of the transaction and can start fresh with them.....
     
  6. Joe65

    Joe65 LawnSite Member
    from nj
    Posts: 93

    same thing happened to me....but my attorney was business savvy......i bought out 55, i believe was starting number, for 16500.........none of these were written contracts......i worked with the previous owner on them the last month of season 2004......i was introduced to many in person and than all got a letter from him.....telling them that i was experienced and to give me a chance the following season........all but one did....some cranky old bastard......anyway my attorney had set it up that i give in 11000 the end of season 2004 and that payments of 1000 month from may-sept would be paid, as long as i retained 20percent of customers...unless for something done on my part......anyway 6 of them went on the market during that time...2 sold, i was able to get new owners......the other 4 have been on market for 2yrs since they are over 1.5million.........i wouldn't sweat it unless you foresee a big loss in what he projected as your potential income.......i took a big chance by buying these account without written contracts....none of my 70plus have them.......but it has well paid for itself last year.......and this year has kicked me up so much extra in softscape, hardscape, planting you name it...so hang it and start looking for other services to offer these people and you may not feel the difference if you lose a few....good luck
     
  7. Joe65

    Joe65 LawnSite Member
    from nj
    Posts: 93

    sorry, the downpayment was 11500 and the agreement was i had to still retain 80percent of customers when other payments had to kick in.....here was a guy getting out end of season so probably figured better to agree with our arraingement.
     

Share This Page