Is this a good buy?

Discussion in 'Lawn Mowing' started by mlutter, Oct 20, 2004.

  1. mlutter

    mlutter LawnSite Member
    Posts: 4

    Hello everyone, this is my first post.

    I was hoping to get some advice for a newbie. I'm currently looking to break into the business and i'm taking the time to do my homework on as much as possible.

    I know a lady that wants to sell her lawn business and move out of state. She has a somewhat legit reason for leaving town that I won't get into, but it's not because the business is bad. We're in central florida and the word from several people in the biz around here, it's heavy competition but there is always room for another crew and there is plenty of work to do.

    Anyway, she wants $12,000 for the following equipment:
    7x16' Horton Hauler Trailer
    Gravely 60" PM260z w/Kohler 25hp, 712 hrs on meter
    Toro 44" z147 w/Kaw 12hp, 1195 hrs on meter
    Echo Edger (i didn't grab model)
    Stihl 400 Backpack blower
    Husqavarna trimmer
    Additionally is her ~35 accounts that are pretty decently spaced.

    Now, first, is this a good buy?
    Second, is this a good way to get into this biz? I like the idea of buying an established business so that as soon as i'm in it, i'm mowing and bringing in revenue. I'm scared of going all out buying new equipment and not having lawns to cut. Having a zillion dollars of equipment and no lawns to mow with is is not a winning proposition.

    My other option is to start small buying used equipment and get my own accounts slowly. Over time i build up to having all the great equipment and heaps of accounts. I like this idea in the abstract.... it's really the best way, but i'm in need of bringing in cash soon and don't have the patience for the organic growth method. I'd much rather hit the ground running. I have good credit and am in a position to take a loan for this. If it is a good buy, i don't see why not to do it that way. Any Advice?
     
  2. wagner17

    wagner17 LawnSite Member
    Posts: 67

    12k doesn't seem like a bad deal at all considering that you will get the ~35 accounts as well. I may try to go a little lower, because the stuff is somewhat used, but all in all if the equipment seems to be in decent shape, I think that it may be worth it. There are others on this site who will have more knowledge, but sounds good for what I know!
     
  3. bushtrimmer

    bushtrimmer LawnSite Senior Member
    Posts: 351

    I think it's a good buy for what u describe. U will learn over the next year what u like and dislike about equipment and probably get rid of some and buy different brands.
    Do yourself a favor and invest in a good, new truck. Use your credit wisely.
     
  4. Travis Followell

    Travis Followell LawnSite Silver Member
    from KY
    Posts: 2,207

    From what I know that does sound like a pretty decent deal for the equipment and the accounts.
     
  5. out4now

    out4now LawnSite Bronze Member
    from AZ
    Posts: 1,796

    Sounds good, are the accounts under contract though? Make her sign a non-compete agreement as well just to be safe and have your accountant check for any back taxes or anything that seems out of whack. Then if all looks good payup payup :drinkup:
     
  6. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    Well, I guess the next major questions to ask are...
    How much annual revenue are these 35 accounts currently generating?
    How many of them are already on signed contracts for next season?
    How much, if any, of the remaining annual revenue will you be picking up for this year?
    Have you looked over all 35 accounts, well, and gotten the business rundown on each?

    Also, considering this is a LADY in the business..... have you explored far enough to see if there are going to be any Male-to-Female service provider transition issues?
     
  7. mlutter

    mlutter LawnSite Member
    Posts: 4

    Thanks everyone for the replys. I thought it looked like a good deal. Glad to see some of the pros agreeing with me.

    To out4now:
    They are on contract most of them, some are mow-to-mow. I had definately planned to make her sign to not compete in this area. I am also thinking of negotiating that she finance me over the next several months, with a non-compete clause and a clause that if i lose contracts, i don't owe so much... keeps her motivated to make the transition smooth

    To Envy Lawn Service:
    Yeah, that's the deep level stuff that I haven't dived into as of yet. I wanted to check if it was worth my time to get into asking all those quesitons or if i should just tell her thanks but no thanks.
     
  8. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    All the questions above by Envy are great questions. Also, to answer the first question, yes, this doesn't sound like a bad deal, a good one as a matter of fact if it's an enclosed trailer. To answer question number two, no. This is not a good way to get into the business. The best thing to do is to get experience first. the best deal in the world on equipment does you no good if you don't know how the business is run, and/or performed out in the field. You can try it, though. Especially with 35 accounts, that will be a tie-down for you so you'll have plenty to keep you busy. It CAN be done! One of the best tools that you have is that you found this place. It is a world of information that you really can't put a price on. I wish I had this when I broke off on my own over 20 years ago. Another asset that you have is not just directly through this site, but indirectly, you can talk to people and get advice as well. If you wanted to call, I would be more than happy to answer any questions you have both about the business and the most efficient way of performing different operations and running equipment. You can save so much time and labor by knowing what to do - when - and how. I may be coming down that way to vacation at some point through the winter. If you make accomodations, I'll come and work with you cheap, and will be able to show you a world of things that can set you on the right track. Techniques, starting points, finishing points, shortcuts, and ways to perfect your work. THIS is the kind of help that is available. Good luck to you, and again, by the price of everything, you can't really get hurt on the deal. You can always get back out of it what you have into it.
     
    Lawn-Scapes likes this.
  9. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    Yeah, I think it's worth diving into deeper, if this is really what you want, if you are truely business savy, if the equipment is in good shape, and last but not least if that's an enclosed trailer.
     
  10. proenterprises

    proenterprises LawnSite Silver Member
    Posts: 2,297

    i think it is a good deal. it sounds like the biz is well established. also, being that their are only 35 accounts means that she was probably in a real personal basis with her customers, and probably did good work at each one, not flying around to finish everything. this is good for you, she has more than likely set you up for a great start, reliable equip and room to grow if you chose to. good luck.
     

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