Merging Companies

Discussion in 'Business Operations' started by abuckeye, Apr 11, 2007.

  1. abuckeye

    abuckeye LawnSite Member
    Posts: 93

    Has anyone ever merged with another LCO? I have been talking with a friend of mine who has a lawn company about partnering up. We are both solo and getting to the point we need to hire an employee. If we merged we could then work together and shouldn't need any employees.

    I just can't figure out how this would work, as far as his customers and my customers. He is set up mainly for mowing and has many accounts. He can't keep up by himself and I believe the two of us could take care of both of our customers but the question remains how to pay each other. Should we form a new company?

    I just wanted to see if anyone else has done this.
    Tom
     
  2. abuckeye

    abuckeye LawnSite Member
    Posts: 93

    Hello...Anyone??? Bump
     
  3. lifetree

    lifetree LawnSite Fanatic
    Posts: 5,370

    I haven't "merged" with anyone before, however, it really boils down to whether you think the 2 of you can get along with each other when the going gets rough. In other words, do you both have a strong work ethic, or, if 1 doesn't pull their weight will the other be hurt by it ? Think about these things before you rush into it.

    In any event, if you do merge, you should put down in writing what the expectations are for each. Usually, in a "partnership", each partner is paid an equal amount. But other business considerations are whether the assets (i.e.-equipment) that each brings to the table are comparable in value. Also, which customer list will generate the most cash flow, etc. ? If 1 brings more to the table than the other, in terms of assets and client base, then it may not be unreasonable for the other to kick in some cash up front to cover the difference.

    Let me know how it goes.
     
  4. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    DONT DO IT.....


    BUSINESS and Friends DONT MIX...... DONT DO IT
     
  5. jc1

    jc1 LawnSite Bronze Member
    Posts: 1,653

    If you have a partner you'll end up 50/50 split. If you have an employee you have 100% left after payroll. If your backed up or he is and you want to team up you could do that on certain jobs. He works a day for you in exchange for you working for him a day.
     
  6. Flow Control

    Flow Control LawnSite Bronze Member
    Posts: 1,267

    DON'T DO IT From personal experience DON'T DO IT I tried that one time and got swindled for about 70k so DON'T DO IT succeed or struggle by our own decisions not by someone elses. Your both used to running the show, it will not work long term
     
  7. Gene $immons

    Gene $immons LawnSite Bronze Member
    Posts: 1,028

    Hire an employee to help you...keep the friendship.

    Down the road, when your company is big, you will be glad that it's ALL yours.
     
  8. Turfdoctor1

    Turfdoctor1 LawnSite Senior Member
    Posts: 705

    I have no experience with a partnership, but it seems to me like you would be benefiting more than him in this situation. As earlier stated, a partnership should be 50/50, and if you have less accounts, less income, you are getting a good deal.

    But, i don't understand how teaming up is going to keep you from adding an employee. tighter routes? If I have a certain amount of work that I can do in a day and I team up with my buddy, it's going to do nothing but slow me down.
     
  9. razor1

    razor1 LawnSite Bronze Member
    Posts: 1,985

    While having a partner sounds good at first, it can turn into a very "bad marriage and nasty divorce". I have to agree with ICS, Don't Do It. Most everyone I know who tried it, couldn't make it work. Including many families.
     
  10. NewHorizon's Land

    NewHorizon's Land LawnSite Senior Member
    Posts: 690

    Why not buy him out and hire him as an employee. His customers come to you cuz he still services the property. Just a thought.
     

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