Is it worth it to buy a building?

Discussion in 'Business Operations' started by B & B Yardscape, Jul 25, 2008.

  1. B & B Yardscape

    B & B Yardscape LawnSite Member
    Posts: 131

    I have an opportunity to purchase some commercial land. 2 acres with large pole barn with attached office space with 4 offices, bathroom, & furnace room. Fenced in back lot. The location is 3 miles from my house. On a major road so exposure is good. And I drive past it from my house to get to the town where I do most of my work.

    What I need to know from the members of LawnSite is if having a “brick & mortar” building has increased sales? Either of lawn & snow services or landscape installs. Do people driving by stop in and say, “Can I get a quote for mowing my grass?” or “Can I get a quote for putting in a retaining wall?” ect.

    I run my company out of the same property as my home. All my trucks are out front and people know what I do. I have had maybe 5 people stop in and ask if I did such and such and if I could give them a quote in the last 2 years.

    I realize that having a larger shop I would probably do more preventive maintenance. I would have a cement floor to replace the fly wheel on one of my trucks that last week I changed in the dirt of my driveway. I could sell bulk materials such as mulch, sand, stone etc. I would get all of the “junk” out of my yard. My workers would have a place to park instead of in my yard. The positive list goes on and on. But there is negative stuff also. More taxes, new electric bill, new heat bill, have to drive to work to do stuff after hours. Would have to hire someone (or two) to stay at the building if I wanted to sell stuff from there.

    If someone has moved their business out of their house to a dedicated business location, has it increased sales?

    Thanks for the help.
  2. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 17,007

    If you can pay cash for the property WHY NOT?
  3. Albery's Lawn & Tractor

    Albery's Lawn & Tractor LawnSite Bronze Member
    Posts: 1,674

    If you can afford it, do it. Use a laptop for all your work so you can take it home with you. The exposure alone would be good. Plus if people see you sell mulch, there's a good chance you'll get to install it for them as well.
  4. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Posts: 10,742

  5. JohnnyRoyale

    JohnnyRoyale LawnSite Senior Member
    Posts: 616

    I have always operated my business from an industrial unit or building. I will admit it does solidify your existence, and as stupid as it sounds, makes you legit. Has it helped my business? Definitely. We stopped leasing two years ago and bought our own place.

    The beauty of this property is that its located on a street full of major cottage builders and boat dealers. We get walk ins all the time. We're in the planning stages of a display area in the front to showcase some of our work. It should be an amazing selling tool. This couldn't be done from home. Our yard here is big enough to allow us to store extra material, and stock as we need or for the odd delivery-something i'm going to expand on next spring.

    Plus, this business takes so much from us on a daily basis, I couldnt imagine having to work on stuff when at home-I'd really have no life.

    And, in the end, you have something to sell, that hopefully has appreciated over the years. Good luck with that decision. I'm glad I made mine.
  6. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    Everything else we buy for the business is a declining asset. This is a no brain-er! Buy a appreciating asset for a change even if it never brings in a dime. It's also tax deductible. It will also give you more legitimacy when you are interviewing. Employees don't know where you live, always a good thing. If you get any work from it it is a bonus but the re sooo many reasons to have the business buy you a building/land. Yes, yes, yes, buy it yesterday, if not sooner.
  7. Mrs. H

    Mrs. H LawnSite Senior Member
    Posts: 708

    All seriously good points.

    I havn't the same experince, but one of our competitor have a nice building on a main strip like your describing. He's been in buisness for 20+ years and it seems to be good exposure. David has often said he'd liked to have done something similar.

    I'd say go for it. Especially if it is affordable.
  8. Lawnworks

    Lawnworks LawnSite Fanatic
    from usa
    Posts: 5,407

    I agree! Appreciating assets are good. BUT you will not be able to write off the entire asset. You can depreciate everything but the land over a period of years... thinking 38... so the tax advantage is not significant. I just bought a commercial building a few months ago... and went over specifics with my accountant before the purchase. I would not expect a major tax deduction.

    As far as increasing business... don't plan on it. That would not be the reason I would purchase a building. I bought mine because running a business out of your house w/ several employees was against zoning regulations, and it gets kind of tiresome having employees, trucks, equipment around a residence with your family.

    The deciding factor should be PRICE. Now might be the time to buy... since nothing is selling. If it is a good location... it should go up in value. The deciding factor should be price... if the price is right you cannot go wrong. Make sure you are getting it below market value. When I bought my building, I looked it up on tax assessors and basically bought it for what they built it for 7 years ago. It would have cost me at least 50k more than I bought it for to build the exact same building and yard today... if you can steal it... do it.
  9. Lawnworks

    Lawnworks LawnSite Fanatic
    from usa
    Posts: 5,407

    Great advices from some one that doesn't even know how to keep one employee. Come on dude... maybe should exclude yourself from discussions over your head.:dizzy:
  10. AI Inc

    AI Inc LawnSite Fanatic
    Posts: 25,390

    Even without exposure , you are putting profits into something with value. Contrary to popular beleif , Our businesses are realy not worth all that much come retirement time.

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