Considering parting out my business.

Discussion in 'Business Operations' started by ODwyerPW, Mar 6, 2006.

  1. ODwyerPW

    ODwyerPW LawnSite Member
    Posts: 72

    Folks,
    I am considering parting out my business this year. Literally, I serve a 3 county area (small counties, close together). I'd like to break it up into 3 parts and sell it. Looking to have the balance of the trucks taken over as well as receive $25K-$30K for each broken off business. For the $25K, each will receive an enclosed trailer, mowers (Zturns and walkbehinds), hand held equipment, brochures, clothing and about $45K-$70K of customers. I've made the offer to 3 of my best employees to each purchase a 1/3.

    I'll even throw in a new plow/salter and snow blower.

    Have decided to relocate out of the Northeast all together. The business has been fun, made good money and we even managed to run it remotely this past year with the guys handling the day to day. However, long term a business can suffer that way, so it's just better to sell it healthy and get out of Dodge. We are doing a show in three weeks, so even with the impending sale, we are still growing it!

    Has anyone sold or parted out a business in this fashion? Should I just try to sell the entire business? For this year, I'll keep the orginating corp and web site.
     
  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Novel concept. Why break it up other than to make the price more appealing and manageable by the 3 employees?
     
  3. ODwyerPW

    ODwyerPW LawnSite Member
    Posts: 72

    Parting it out really for the sake of the employees. Each is fully capable of absorbing this level of debt load. Each is comfortable with the accounts they will be taking (they should, they've done them for years). They won't have to worry about hiring allot of staff. The customers know these guys so the transfer will be painless.

    I'm just looking to recoup some initial investment into the company and eliminate my debt. It's provided a very healthy living for me over the years and given me quite a bit of time off. I'm happy with exiting out of debt. Truth is, I'll take some of the landscaping tools and equipment with me to the SouthWest (so I won't be going completely empty handed), but the lawncare stuff will remain.
     
  4. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Nice for everyone it seems...transition is key too IMO. Best of luck in the sale and living someplace warmer than what you're used too as well.:)
     
  5. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    That sounds like a smokin deal for an existing company looking to grow, or someone looking to get into business, and not have to go through all of the start up hassles.
     
  6. ODwyerPW

    ODwyerPW LawnSite Member
    Posts: 72

    I think it is a good deal as well. I hope the guys go for it. If they don't, quite honestly someone should buy the whole 3 parts, keep it in tact and just manage the guys...they're capable of doing all the work without the owners involvement (other than the contract negotiations and billing).

    However, I found it too difficult to manage the whole bidding, negotiation, invoicing and collection remotely this winter. If I'm going to live in the SouthWest, then I'd better make my living in the SouthWest and not hold on to this lawn service company. For someone already in the Upstate New York area, or even already in the business, it would be a worthwhile takeover.
     
  7. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    IF I had the means to finance it I would be all over it, being a Young man creditors are not always the most generous. Up state New York is a great area Esp. for the Snow Business, I bet you guys get alot of Snow up there. Im sure the Lawn Maint. side is equally as good. what knid of $$$ are you looking to get for the separate parts, and the WHOLE.
     
  8. ODwyerPW

    ODwyerPW LawnSite Member
    Posts: 72

    I grew the business big quickly and just don't want to be stuck in the North East all winter wrapping up previous seasons work and preparing for the next. That's why I considered breaking it up as well...figured folks might prefer manageable pieces instead of the huge business I've created.

    It would breakdown as follows:
    BUSINESS #1
    1 - 2005 F350 Business White with Dump Insert 15K miles (buy it for the value of the remaining payments)
    1 - 05 14 X 7 Royal Enclosed Trailer, Business White
    1 - 04 48" Ferris 1000IS Z Turn 23hp with Turbo Vac System
    1 - 05 33" Sutech Walk Behind Mower 13hp with Grass Gobbler
    1 - 05 Lesco Walk Behind Blower (10hp?)
    1 - 04 Husqvarna Back Pack Blower (145BT?)
    1 - 04 Husqvarna String Trimmer (326?)
    1 - 04 Husqvarna String Trimmer (326j) - Convertible model for additional attatchments - Blade Edger.
    1 - Husky Tookbox with the Truck.
    1 - 02 28" MTD Snow Blower
    1 - 03 Husqvarna Rancher 18" Chainsaw
    Approx $45K in signed commercial lawncare seasonal contracts -- no plowing.
    $25K for Sale of this portion.

    BUSINESS #2
    1 - 2005 F350 Business White with Dump Insert 15K miles, Fisher V Plow and Salter (buy it for the value of the remaining payments)
    1 - 04 14 X 7 Royal Enclosed Trailer, Business White
    1 - 05 52" Ferris 1500 Z Turn 25hp with Turbo Vac System
    1 - 05 33" Sutech Walk Behind Mower 13hp with Grass Gobbler
    1 - 04 Lesco Walk Behind Blower (10hp?)
    1 - 04 Husqvarna Back Pack Blower (145BT?)
    1 - 04 Husqvarna String Trimmer (326?)
    1 - 04 Husqvarna String Trimmer (326j) - Convertible model for additional attatchments - Blade Edger
    1 - Husky Tookbox with the Truck.
    Approx $50K in signed commercial lawncare seasonal contracts -- no plowing--however you'll have a shot at the same $30K worth of accounts we plowed with using this truck last year as they mow and plow accounts.
    $30k for Sale of this portion.

    BUSINESS #3
    1 - 2004 F150 Business White 24K miles (buy it for the value of the remaining payments)
    1 - 04 8 X 5 Royal Enclosed Trailer, Business White
    1 - 00 48" Ferris Ultrabelt Walk Behind 15hp with Grass Gobbler
    1 - 05 33" Sutech Walk Behind Mower 33hp with Grass Gobbler
    1 - Husqvarna Handheld Blower
    2 - Husqvarna String Trimmer (326j) - Convertible model for additional attatchments - Chain Saw & Hedge Trimmer
    1 - Husky Tookbox with the Truck.
    1 - 04 Husqvarna Trim Mower with bagger (rather worthless really)
    1 - 05 32" Simplicity Snow Blower.
    Approx $30K in residential lawncare seasonal contracts -- $8K worth of residential snow blowing all located very close together.
    $20k for Sale of this portion.

    I'll sign a no compete agreement and stick to small residential stuff (that is until I sell it as well and head down south before winter). I personally have no interest in pursuing large work (Plazas, Management Companies & Home Owner Associations, etc) or any snow removal (I want to really be in the SouthWest in the Winter).

    I'm offering the BUSINESS #3 because those folks are Mow and Blow customers and I won't be around to do snow blowing and don't want to try managing someone while they do it (like I did this year).

    BUSINESS #1 and #2 consist of large work that can be completed in 1 1/2 days by a 2 man crew. You buy both you have $90K+ of work in 3 days plus any snow removal you want in the winter. Large work is a good way to make really good money, but it doesn't let me relax in the off season like I want.

    I might have a 6X10 10000lb Dump Trailer with a 16HP Leaf Vac for sale seperately. There's also miscellaneous stuff that I'd divy up (wheel borrows, rakes, shovels, etc..)

    This is kind of what I had in mind. Again, just mulling all of this over.
     
  9. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    Business 1&2 Sound great esp. the F-350 and the V plow.
     
  10. ODwyerPW

    ODwyerPW LawnSite Member
    Posts: 72

    I'll give my guys another week to decide and then I'm advertising it locally in the newspapers.
     

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