Buyout

Discussion in 'Lawn Mowing' started by glenjr10, Apr 11, 2003.

  1. glenjr10

    glenjr10 LawnSite Member
    Posts: 98

    I approached another company, that was servicing my neighbors property that i had serviced for him while he was out. After i introduced myself, I told him that i had just started. He mentioned to me that he was considering selling his accounts. I inquired some, but not deeply, which he stated brought in $5000 a month (22-25 properties, which are res/comm. VERY influential type of people to work for, large hotel).

    When i inquired how much, he said 3 months for the accounts + equipment. I did not think that was bad.

    My question is considering all foreseeable problems, (insurance, new employees, etc.) i don't know if it would be too big of a jump for me. Right now I am in school, work another job, but willing to go full time. I have 9 accounts that bring in about $750/month. Would this be too big of a jump to begin with, especially with only having a 32" w/b. He said that some properties would require a ztr, to be profitable.

    Thanks in advance.
     
  2. bruces

    bruces LawnSite Senior Member
    Posts: 648

    He said plus equipment, right?

    I assume the equipment is sufficient to handle the accounts.

    If so, what you have now shouldn't be an issue.

    Do a search on purchasing a business. There is lots of info on here.

    If you do buy it, you will want to try to pay for the accounts as you collect, not all up front. Also, make provision to adjust for accounts that don't stay with you.

    Get a non compete from the seller.

    Are the accounts under contract?

    Is the pricing in line, in other words, are the accounts profitable?

    Do you have time to take on the business and keep up with what you have?

    As far as help, if you go to full time, you should be close to able to handle the volume by yourself if the accounts are priced right. One helper at the most should cover you.

    Many other issues to consider, but these are a few.
     
  3. glenjr10

    glenjr10 LawnSite Member
    Posts: 98

    I do not know any of the details (under contract, profitable), because we were just talking in passing, right before i left for my other job.

    I just don't know if it would be to big of a jump, (more insurance, because one of the accounts is the largest hotel in Lafayette.)

    The reason that he is thinking of selling, is that he is getting to big int he Landscaping end of the business, which is where he always wanted to go.

    I still need to discuss the details, but don't know if it would be feasible, because of my current situation, (grandparents are AGAINST me going into the lawn care business, and mom is somewhat against). The only person who is 100% behind me is my dad. I think i could change a few minds with this deal, but i don't have the financial means to take $15,000 in debt on me right now
     
  4. fblandscape

    fblandscape Banned
    Posts: 776

    Glen, I am in a similar situation to yours, only I am looking at a different sized business, and not doing anything for about another year or more. Think it over, what do you have to do now? Do you really want the accounts?
     
  5. glenjr10

    glenjr10 LawnSite Member
    Posts: 98

    yes i want the accounts, but my timing is off.

    I have just purchased my equipment (all paid for) which has eaten all of my cash flow, so i don't have the money to afford it personally. I know that i could go to outside sources and get the necessary money to buy this company.

    I just purchased an open trailer 7' X 16', which i could hold anything, but i don't have the space (without spending $$$$$$$$) to store any new equipment that i would need to purchase to be profitable on these accounts.

    He mentioned two properties, that are known throughout Lafayette, LA region. I just don't want to pass up the great chance for exposure.
     
  6. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    $15k plus equipment cost?
    #1: you better do some major number crunching.
    #2: you better do some major soul searching, that would be a big step.
     
  7. nelbuts

    nelbuts LawnSite Bronze Member
    from SW, FL
    Posts: 1,053

    Try this. Tell him that you will give him $3K the first three months and $2K the last three months. But check everything else first. Or tell him you will give him the $5K earnings the first, $4K the second, $3K the third and fourth. Then all you are out of pocke the first month is your time. Each month after you make a little. He might just go for it.
     

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