New venture-Go or Wait?

Discussion in 'Irrigation' started by germann, Sep 4, 2007.

  1. germann

    germann LawnSite Senior Member
    Posts: 259

    We are relocating, and have sold our lawn maintenance business. An irrigation firm is for sale in the new area. Roughly 200k in annual revenue. Most of their work is startups, blowouts, and repair. Here is the deal-

    We did mowing, fert, and landscape maintenance. Our irrigation experience is limited. We have installed one new system and done minor repair. Our business experience is solid, as our old company was larger than this one. However, do you guys think we can hack the learning curve. We would plan on working with the guy this fall, taking classes all fall and winter, and taking over in the spring. There are two techs that would hopefully stay on. What would you suggest other than the IA for classes, etc.? A plus would be there are two of us taking the owners position, so we have a manpower plus. It will limit income for a while, but that is not a real problem.
     
  2. Kiril

    Kiril LawnSite Fanatic
    Posts: 18,308

    IMHO, risky given your relocating.
     
  3. 200k in annual revenue is really not that much with over head and supporting 2 tech's and 2 owners....plus paying the old owner....
     
  4. germann

    germann LawnSite Senior Member
    Posts: 259

    The old owner wants out-he is retiring, so he will be on a couple of months max. We want to upsell the customers on other maintenance down the road once we get a handle on the business. Cash flow should be OK. I am worried about lack of knowledge, especially on repairing older systems. Is repair and maintenance too involved to learn on different brands and ages of systems. Like I said, we know fundamentals, and will educate ourselves as much as possible over winter.
     
  5. I agree. In Dallas I feel that a service vehicle with one person needs to generate 150,000/year. Our goal as a two service tech company is 300,000 which we could do easily if the 50 year old owner was 30 something. How well is the customer list documented?
     
  6. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    Has to depend on the area. We don't get the 150k per man, partially due to average income of the area, and weather. I don't work mid Nov - mid March. Heck I took a lot of time off this summer as well by choice. and hardly any work now going into blow out season. And I am happy with my income. Sure I would like to make more. But I also like to do things other than working.
     
  7. I agree with you 100% Dana. That is why I made the inference to Dallas. We have 200 full time working days so 750 gross sales per vehicle/man per day works out to 150,000. They are about 20-30 more part time days so it can be higher. i'm trying to scale back but it has been rough. My business is phone driven with lots of spoiled customers so changing gears to add quality and time in my life has been very difficult.
     
  8. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    Fimco - are you doing installs? If you're doing installs, then yes, I believe gross sales should be higher than if it is just service. But all expenses will be higher as well. More equipment, supplies, bigger vehicles to pull bigger equipment. With service only, overhead and expenses can be MUCH lower. And possibly higher profit margin due to lowered expenses.
     
  9. No installs. All service. Don't own a trencher or compressors. My f-250/service body. Henry's commercial astro van. Lots of tools 521s and rainmaster remotes:)
     
  10. CAPT Stream Rotar

    CAPT Stream Rotar LawnSite Fanatic
    Posts: 5,955

    hire me!!!!!!
     

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