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how to sell/ split a business

Discussion in 'Lawn Mowing' started by bigmower5560, Jan 12, 2010.

  1. bigmower5560

    bigmower5560 LawnSite Member
    Posts: 32

    well i have been doing this for 5 years now, started out as part time with my business partner and for the last 2 years have done it full time. And you know what they say about partnerships... the rate of splitting up is worse then the divorce rate! The reason why i want to get out is not because i can't stand the guy, but just cause he is lazy and doesn't do as much as he should. I'm the guy that finds the work, does over 50% of the work, and does all the office work and it's just not working this way...
    Any ways i'm looking at getting another part-time/hopefully full time job. I don't want to get out of lawn care incase this job doesn't work out so i want to keep a days worth of work for my self to pay the bills.
    So my questions for those of you who have sold or split a business...
    How do you value your business? I find it hard to value a particular account and nothing is guaranteed for the coming year at this point.
    I've heard of doing your gross profit for three years... but in the lawn industry that seems impossible.
    The other problem is that there is little chance of him getting any money to pay me for my share and i think he will run the biz in the ground so i need what im going to get right away.
    For those who have split up, how did you do that? I don't want all the equipment... just enough for me to keep going on by myself... I was thinking a mower, dump trailer, and your new holland tractor so i can dabble in a little of everything. Any input would be great!!!
  2. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    Two words, "good luck"....
  3. bigmower5560

    bigmower5560 LawnSite Member
    Posts: 32

    thanks, but could use a little more help than that.
  4. sehitchman

    sehitchman LawnSite Senior Member
    Posts: 777

    Does your partner want to stay in the business or get out. I would offer him 1/2 of the value of equipment and leave it at that. If he wants more, do the following.
    If he is staying in, split the accounts by mowing areas and put them in a hat. Keep track of the dollars by account and attempt to keep the areas equal. Flip a coin to decide who picks from the hat first.
    Establish value of equipment. Split it into Mowers, handhelds, trailer, etc. Flip a coin to decide who gets to choose 1st. Start with mowers then work down the list. Then keep track of the value and when someone hits 50% they are done picking. Shake hands and walk away. Then 4 weeks into the season, contact the people on his list and offer to do their yards. By then he will have disapointed them enough that they will start with you.
  5. bigmower5560

    bigmower5560 LawnSite Member
    Posts: 32

    must be nice to live in a perfect world.... just kidding. yes, i forgot to mention, he wants to stay in the business and he would take all the accounts and equipment if he could, but he doesn't have the funds or the credit to get a loan from the bank... so we basically have to split everything.
  6. xclusive

    xclusive LawnSite Bronze Member
    Posts: 1,052

  7. sehitchman

    sehitchman LawnSite Senior Member
    Posts: 777

    Sounds like neither of you have the funds to pay the other guy and walk away. Do the account and equipment split as I suggested. If you have to much to handle by yourself, get a good helper or sell the accounts and equipment to another LCO. If you wait for this guy to pay you over time, you will never see the money. I'd take the equipment and run, then you at least have an asset you can sell.
  8. bigmower5560

    bigmower5560 LawnSite Member
    Posts: 32

    well if i wanted to buy him out i could... getting the money on my part isn't the problem... i have a college degree and did this to get through school. I don't want to do it forever. I only want a hand full of accounts because i like the work, but don't want to do it for a living. That is the biggest part of why i am getting out, too much work, and not enough reward. My business partner is a big part as well, but the main thing is i just want to move on to bigger and better things.
  9. LedgedaleLawn

    LedgedaleLawn LawnSite Senior Member
    Posts: 377

    Did the partner thing once, never again. I too wish you "good luck" your going to need it. Find yourself a good lawyer, and act fast.
  10. santafe

    santafe LawnSite Member
    Posts: 191

    if you're asking what the business is worth, I have done a little of that research here on LS. I would say it is worth the value of the equipment plus two months worth of billing.

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