Purchansing a LCO

Discussion in 'Starting a Lawn Care Business' started by dgarfied74, Feb 18, 2008.

  1. dgarfied74

    dgarfied74 LawnSite Member
    Posts: 5

    I am new to the business, and had a goal of starting in the Spring of 09', doing my research and writting my business plan over the next 12-14 months. I have happened on an opportunity to purchase an existing LCO for $20K. This price includes a 60" Zmaster with a bagging system, 54" Ransome walk behind, 48" Scag wb, 36" gravely wb, Bluebird power rake, Leaf vac chipper, 2 commercial weed whips, 2 commercial edgers, 2 Redmax 7100 blowers, spreader, 12X6.5 trailer with racks, fliers, signs, and array of misc items. Also, the business comes with a customer list of 137 accounts within a 5 mile radius. It is a complete turn key with owner support and training.

    If anyone could give me some advise it would be much appreciated.

    Thanks!
     
  2. newtostone

    newtostone LawnSite Senior Member
    from NY
    Posts: 681

    if those customers are paying a good rate thats gold. find out how long and how often hose customers are serviced how long has the current guy had them and do they hold a transferable contract? if so run with it cause around my neck of the woods 137 customers would be some $.
     
  3. BUCKEYE MOWING

    BUCKEYE MOWING LawnSite Bronze Member
    Posts: 1,169

    I agree ....check all the details and ask to see the contracts.
     
  4. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 17,326

    Ask the feller if you can ride with him a couple of days. If the rates are fair I think its a great deal. Be sure he is moving of will not go back into landscaping in your state
     
  5. Gaturf

    Gaturf LawnSite Member
    Posts: 128

    sounds like a good deal. look at all his records, like billing statements, maint. records ect. If he is servicing 137 accounts then he is putting some hours on those mowers. Also, do you have some help lined up? Is he going to sell you a truck also? 137 accounts on a weekly basis is around 27 accounts a day.....can you handle that with one crew. how many crew does he use? I like Larry's in Alabama's idea about riding around with him. and my last question is.....what is a weed whip?

    gaturf
     
  6. DK lawn care

    DK lawn care LawnSite Senior Member
    Posts: 763

    Does he still service those accounts or is it just a list of people he use to service?
     
  7. dgarfied74

    dgarfied74 LawnSite Member
    Posts: 5

    Thanks for the quik response. The 137 is a customer list from last year that will have to be re signed this season. We would send out letters to last years customers for an 08 season service agreement, as well as ditributing fliers. I can assume based on what I have read and heard that I could expect to loose 15-25% of last years base.

    The Zmaster has 1500 hours, and the others are in the same arena of use. They all seem to be well maintained and are in good running condition. I figure the equipment is in the 10-12K range, so I am looking at paying 8-10K for the business name, number, and unsecured accounts.

    The current owner states that he is moving out of state to be with his daughter. He seems to be a trustworthy individual.

    He ran the 137 accounts with a two man crew last season, and he would help out during catch up periods.

    There is not a truck included in the deal, but I already own a truck.

    Weed Whip=Trimmer

    Thank you all for your advise, keep it coming!
     
  8. BUCKEYE MOWING

    BUCKEYE MOWING LawnSite Bronze Member
    Posts: 1,169

    Add a no compete clause to the purchase contract between you two .
     
  9. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 17,326

    Personally I prefer to work alone, I once service 65+ accounts with only 2 biweekley by myself. Mabey he would be willing to split the business, just a thought
     
  10. Gaturf

    Gaturf LawnSite Member
    Posts: 128

    Maybe its just me but 8-10 k is alot to pay for a name and 137 customers that you may or may not have? But if the guy has been around for a while and has a good rep then that is a plus for you. But now that i think about it....even if you loose 25% that still leaves you with around 100 customers. you could easily make your money back in a season. And make sure you get a no compete clause. The last thing you want is him to take your money then start up again. My last question is (and maybe you already covered this) are you brand new to the lawncare business?

    gaturf
     

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