Merging

Discussion in 'Lawn Mowing' started by NLCMike, Jan 16, 2001.

  1. NLCMike

    NLCMike LawnSite Member
    Posts: 1

    Hi fellow members, this is my first post so please bear with me. First off this is the best site I have seen in years and am honered to be a member.
    I currently rent shop space with a freind who is in the same line of work only bigger. He is currently trying to get a new business up and going and does not want to deal with the grass end of it. We talked about merging the grass together and I would take full responsability of it while he would take care of his own deal. I currently have 60 res. and 2 fairly large apt. that myself and 1 full timer take care of. If we merge the grass I would have 120 res. and 3 apt. (plus more help). We have been friends for years and have passed work back and forth when it was best for both of us. The problem I am having is what would be a fair way to do this without jeopardizing our friendship.(I have already told him that I would have nothing to do with it if I think that that could happen).Any ideas or other suggestions for an alternate route to this would be greatly appreciated. Mike

    (IF YOU WANT TO SEE THE SUNSHINE, YOU HAVE TO WEATHER THE STORM)
     
  2. Green Acres

    Green Acres LawnSite Senior Member
    Posts: 316

    There are alot of things you could do to make this work. One would be fiqure up how much your company is worth and fiqure up how much his is worth. Since his is bigger pay him the difference and then you would be partners and everything would be 50/50 with you in charge of the lawn care business end of it. Two would be just buy the lawn accounts from him and let him go do his own thing that way he would recieve money to help start his new business, your business doubled in size and your company's are still seperate and easier on the friendship. There are more ways to do this but these two are the first that came to mind. Hope this makes some kind of sense and helps.
     
  3. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    A partnership is a good way to disolve a friendship. Why not run your own business and have your friend send the lawns your way.
     
  4. Ssouth

    Ssouth LawnSite Senior Member
    Posts: 437

    I agree w/Green Acres. Buy his accounts from him. I would pay 5-10% of annual income or approx. two months of income if they're annual accounts. This way it's now your business and he can do whatever else he would like to do and has money up front to do it. If you are good friends he might let you take care of his accounts for two months while he still bills for them, after that you take over the billing. This option means you must have some operating capital, but w/ 60 res. and two appts. you should be able to swing this. I would not go with the partnership route, from what I hear it only causes probs.

    Good luck in whatever you decide and welcome to Lawnsite.

    Ssouth
     
  5. HOMER

    HOMER LawnSite Gold Member
    Posts: 3,183

    Be careful! Money and business soon part friends. You might consider just helping each other on a regular basis and leave the merging thing alone. I "had" a friend that stiffed me with a $3600.00 yellow page ad last year. I learned my lesson and can only speak from experience. I have thought about this same thing but want to do it in a way that does not affect my wallet or the other guy's. Helping each other and staying 2 seperate businesses is the only way I know to avoid problems.
     
  6. awm

    awm LawnSite Gold Member
    Posts: 3,354

    .If you want to do something you
    can super all the work.He pays his .You pay yours.
    You get a certain fee for helping him out.
    Or better yet dont.
     
  7. mowerman90

    mowerman90 LawnSite Bronze Member
    Posts: 1,491

    If you want to stay friends then you'd better just forget about it, cause sooner or later you know what will hit the fan
     
  8. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    If buying him out is not practical, find a good accountant and incorporate. You would be given a value in stock equal to your percentage of input to the corporation, and your friend will be treated likewise. If you two cannot agree on the respective values, with a professionals' assistance, then you know that merger is not in the cards.
     
  9. Twotoros

    Twotoros LawnSite Senior Member
    Posts: 494

    Just sub-contract the mowing from him. You get 90% he gets 10 and does the billing. He records the work as retailing and pays the sales tax if mowing is taxed in your state. You record the work as wholesaling . That is how I do it and have been subed work for 4 years now. I love this arangement but both parties have trust each other that the work is done proper and the bill is always paid on time.
     

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