I'm in the market for your thoughts......

Discussion in 'Irrigation' started by turfed, Aug 25, 2010.

  1. mitchgo

    mitchgo LawnSite Silver Member
    Posts: 2,769

    I'm not a business owner,

    However , it does sound high to me too. This is a vague and broad break down

    If you hired a one man irrigation guy for this add on to the company and payed him say 30-35k a year ( which is very low imo for the amount of work) .. factoring in overhead cost your personal profit margin is maybe 5-15k a year depending on how the year went.

    So your return in investment is 7-20 years. Eek!

    I also think it's important to know the active client list too. We have 8,200 on our computers.. But what maybe 4-5 are active0? ( i'm not sure on this) We gain a lot of customers from winterizing and back flow testing
     
  2. AI Inc

    AI Inc LawnSite Fanatic
    Posts: 25,236

    Last company I bought out was 142 customers, all hand tools , all inventory. Paid $8500.

    Looked at another company about 4 yrs ago, truck , tools , inventory , trailer , pipe puller 650 customers. Guy wanted $75k.

    Talked to the contractor that did end up buying it and he said in the end it wasnt realy worth it.
     
  3. greenmonster304

    greenmonster304 LawnSite Gold Member
    Posts: 3,049

    It sounds like a pretty small operation like mine where the customers hired me the owner because they liked me or heard good things. But if I sold my company I would think that a lot of those customers would find someone new because they wouldn't know the new owner and feel comfortable with new people working on there properties.
     
  4. turfed

    turfed LawnSite Member
    from MI
    Posts: 24

    Great advice from everyone, thank you. At least i've been thinking in the same way as you all. I know that of the 400 customers they have listed, some may not be current. I want to find out how many were serviced last fall, and what he has on his plate this upcomming fall. As far as the equiptment, i know there are no major items. An air compressor (skid mount), a Ranger with service cap, and some locating tools, various hand tools and random parts. I've requested a list of everything and i'm not expecting the total value to be close to 6k. The condition is important to me, i don't want a vehicle with 200k miles and a list of issues to fix. I can spend 900.00 and buy another truck if needed. I think the worst part is having the balance hanging over my head, knowing how much i still owe, and the pressures of making the business turn a profit. Also, my current business wasn't started with any loans, so i'm not sure what the bank will say when i go to them in the morning.
     
  5. Bank will say HELL NO......Where you been turfed. Banks aren't loaning on squat much less high risk enterprises.
     
  6. irrig8r

    irrig8r LawnSite Platinum Member
    Posts: 4,535

    Gee, that has a familiar ring to it. :)
     
  7. bcg

    bcg LawnSite Bronze Member
    from Tx
    Posts: 1,835

    I've got 2 service vehicles and we've serviced about 1200 customers in the last 2 years. It would cost me a whole lot less than $95k to build that again from scratch. Unless you can buy a business as a going concern with the service tech(s) included, it's cheaper to do it from scratch. If you can retain the existing tech(s) then the customer won't be aware of an ownership change without someone telling them.

    I think the fact that Henry was included (along with a personal relationship between Fim and the buyer) made it a lot easier for Fim to sell. Customers already knew Henry so from their perspective, there really wasn't a change.
     
  8. irritation

    irritation LawnSite Gold Member
    Posts: 3,201

    I remember a thread somebody posted that said one of their high clients left them a house and a bunch of money.
    I'm pretty sure I have a couple customers that are doing just that.:laugh:
     
  9. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    I've done a good job at this. Two techs, 8 years for one, 4 for the other. I try to keep them with the same customers from year to year. And to a degree, I have tried to distance the company from me, Dana. Instead of it being Dana's sprinkler company. The last few years I have tried to handle myself as a technician when on site, instead of as the owner, and not talk personal issues with the HO - I don't want to hear about their kids in college, or their grandkids they saw last week, or their diabetes problems. I want to do the work and go.
     
  10. bcg

    bcg LawnSite Bronze Member
    from Tx
    Posts: 1,835

    I go one step further, if people ask me if I'm the owner, I lie and tell them I'm just one of the sprinkler guys. When people know they're dealing with an owner they always seem to expect "extras" and I don't give them. I'm there to do a good job for a fair price but I certainly expect to be paid for everything I've done.
     

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