expanding my business

Discussion in 'Starting a Lawn Care Business' started by msturfsurf, Apr 23, 2013.

  1. msturfsurf

    msturfsurf LawnSite Member
    Posts: 35

    I am going to look at a lco a guy has for sale hoping we can work a fair price and deal. I just started this season and trying to grow this into a full time thing. So figured have face the giant in the start and best way start full time buy a built business from the start. I have few lawns and some my own equipment but this will help expand everything. 16' trailer 2 zero turn mowers blowers, chain saws, trimmers, edgers and pole saws. Business has 45 customers and makes around 60,000 asking price is 30,000 obo

    Wish me luck everyone.
  2. CreativeLawncareSolutions

    CreativeLawncareSolutions LawnSite Silver Member
    Posts: 2,025

    30k is waaaaaaay too much. The customers are worth essentially nothing. Please, be careful. Don't do anything rash. Research this very topic here on this site, please.
  3. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,717

    Agreed, find the book value of the assets and then your value for what the accounts are worth, then make an offer.
  4. msturfsurf

    msturfsurf LawnSite Member
    Posts: 35

    jrs I looked on amazon and googled it my computer didn't come up with any exact matches on that book.
    Do you know the author by chance???

  5. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,717

    Book value is a term...

    KBB is good for light/medium duty, but doesn't list commercial trucks.

    I base values from comps on machinery trader or truck paper for trucks/machines.

    For mowers I usually call my sales rep and ask the trade in value of the unit.

    Hope that helps :waving:
  6. LandFakers

    LandFakers LawnSite Fanatic
    from CT
    Posts: 6,229

    I figure the equipment site unseen is worth 9k at the most, and as for price on the accounts, I would go with the gross of all the accounts for 1 week. Seems to be what a lot of guys do, but he may think they are worth more.
  7. CreativeLawncareSolutions

    CreativeLawncareSolutions LawnSite Silver Member
    Posts: 2,025

    Does the company have contracts with their current customers? Do they have a clause on that contract regarding the transfer of ownership? even if they did it's not like you can sue them for what amounts to probably 100's of dollars. That's why the current clientele is essentially worth nothing. What has worked in the past is where the buyer of the existing co. would pay a certain percentage of the gross for a set period of time. Like, say, you bought the co, today. You'd pay 10% of the gross of the mowing revenue for the rest of the season. That seems to be what most would recommend.

    Also, have him sign a non-compete clause so he doesn't pilfer the customers from you after he cashes your check.

    The equipment value is the easy part.
  8. goel

    goel LawnSite Member
    Posts: 73

    This really is the worst way to grow for you. You know nothing and can loose everything. Heed the posts above.
  9. Smallaxe

    Smallaxe LawnSite Fanatic
    Posts: 10,081

    Buy his equpiment IF you need it... Run the business yourself under his name for 1 year and he pays you as a partner but cashes the checks for himself...

    It is the only way to know whether the business is viable in your hands... renegotiate next Spring...

    JMHO,,, further consideration is definately a good idea... :)
  10. The Turf Guys

    The Turf Guys LawnSite Member
    from Midwest
    Posts: 135

    Just my 2 cents- $12k would be generous. And I agree with goel-horrible way for you to grow. I'm sure you are a hard worker and a good guy but a bad investment starting out will royally mess up your business.

    Instead I would take $5,000 and invest in marketing and you should get more than 45 customers. Then you can buy some good used equip as needed.

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