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offered to buy the business i currently work for

Discussion in 'Starting a Lawn Care Business' started by Jmp5us, Jul 25, 2008.

  1. Jmp5us

    Jmp5us LawnSite Member
    Posts: 10

    Recently the guy i mow for offered to sell me the business. this business right now is on the smaller side, about 25 accounts mowing, and during the winter some snow removal contracts (haven't gotten a number on how many there is for snow removal)

    he offered it for $50,000
    seems to be a very high number, but includes all of the equipment, including the truck and trailer.
    F350 turbo diesel (2000 77,000 miles)
    pace america 19ish ft closed trailer
    All Exmark 70in, 60in, and 52in WB
    2 echo weed eaters
    1 echo edger
    backpack blower
    hand blower
    2 echo hedgers
    hydraulic 8ft snow plow
    salt spreader

    when i checked out values of all the equipment i came up around $45000

    im still thinking on it, and want to see all the contracts i will be getting, i also plan on expanding the business if i am to buy it.

    what does everyone here think?
     
  2. Sweet Tater

    Sweet Tater LawnSite Silver Member
    Posts: 2,123

    I have never bought a mowing business and have little knowledge, but from what I have read on here you need to check and make sure all those contracts will choose to remain with you if you buy it.
     
  3. railman

    railman LawnSite Member
    Posts: 94

    if you gonna pay that much you might as well start your own. you can start up on your own and get new equipment for less than that. hope all 25 accounts is under contract and make sure they stay with you if you decide to buy.
     
  4. elite lawns

    elite lawns LawnSite Senior Member
    Posts: 363

    That way to high. buy it new if your going to spend that kind of money
    good luck
     
  5. Cashio13

    Cashio13 LawnSite Member
    Posts: 111

    Im with the posts above, you might as well buy all new equipment with $50,000. A couple of walkers, a nice 36 or 48" WB, a cheap push, trimmers, blowers, trailer, and the extraneous hand tools and equipment. Also, i would go to this guys accounts and tell them he is planning on selling and you are taking over with your new business. If they don't bite then with the proper advertising you can get 25 accounts in no time. Good Luck!
     
  6. Jmp5us

    Jmp5us LawnSite Member
    Posts: 10

    thanks for the thoughts guys, if i was to go with it, all the places we currently do know me, they would defiantly stick with me...
     
  7. MileHigh

    MileHigh LawnSite Silver Member
    Posts: 2,466

    yep.........
     
  8. wheelsup

    wheelsup LawnSite Member
    Posts: 6

    I don't work in landscaping, or anything related, so I'm using assumed / made up numbers. Feel free to input your own.

    I would figure it like this:

    Revenue - Expenses = gross profit

    So to use some numbers:

    25 accounts x $30 each week x 4 weeks per month x 6 months = $18,000 in gross revenue

    Insurance, gas, supplies, mx, etc., $4,000 (just a rough guess)

    $18,000 - $4,000 = $14,000 in gross profit

    So you spent $50,000 but made $14,000. If you're working 40 hours/week for 6 months that works out to about $14.50/hour. Although you essentially "bought" your job. Most folks can make that or more without spending 50g's.

    --------------------------------------

    Now, assuming you don't pay "all cash" for the business, but finance the $50,000 completely.

    $50,000 financed, typical business loan, 10% APR @ 5 years, 6 payments per year to match your income season.

    Payment of $2100/month, on gross profit of $2300/month ($14,000 gross profit/6 months) leaves you a grand total of $200/month before taxes...

    All-in-all, not so good IMO.

    I'm not a business pro or anything but that's how I would evaluate it.
     
  9. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    Considering you yourself figured out the worth of 45,000 and his offer of 50,000 I would think you're actually getting a great deal! Those 25 accounts count for something and not to mention this guy trained you, too.

    Also your chances of retaining most of these accounts are slightly higher than anyone else, because most of those customers know who you are. A few will still likely leave you because you are not him, but it shouldn't be as bad.

    Probably as turn-key as you can get, that's not to say you'll make it for sure or anything but if this guy is only 5,000 above your estimated street value of the equipment plus you get the accounts and all of that I would say this is a fair deal.

    Yeah but they don't own their own business, they own nothing at all concerning the equipment and what have you.
    Don't forget, when you own your own business you get paid LESS than when working for someone else, at least figured hourly or most any other which way in which employees figure pay rates it is almost always less!

    Guess that blows that cherry red hot balloon of business owners making all the big bucks right out of the water,
    oh well, somebody had to say it, business owners such as myself don't do what I do for the money, take that to the bank and pun intended.
     
  10. Jmp5us

    Jmp5us LawnSite Member
    Posts: 10

    right now i am looking at it as the same as Topsite..... i know with 50g's i could start my own business, BUT i would not be able to get near the equipment, nor the clients, i figure that i will be in debt for the first 2-3 years but after that, all profit.

    i am defiantly not making any quick decisions, but am still thinking about it.... right now it is a small 2 person business so most all the clients know me and i doubt they will leave with me taking over the company. they like my work... as of now though it is all still up in the air
     

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