question on business?

Discussion in 'Starting a Lawn Care Business' started by grand93am2003, Jul 24, 2006.

  1. grand93am2003

    grand93am2003 LawnSite Member
    Posts: 9

    I have the opportunity to buy a lawn care business that nets inbetween 85 and 95,000 a year. He wants 250,000 for it, comes with a couple of trucks ocuple of trailers, lawn mowers, weed eaters, leaf blowers and comes with 50 jobs, is it worth it?
     
  2. Joey bag a' donuts

    Joey bag a' donuts LawnSite Member
    Posts: 146

    50 jobs are netting between 85 and 96k?? I'd research this one before you go any further with it.
     
  3. wski4fun

    wski4fun LawnSite Senior Member
    Posts: 323

    no way. How many years of profit is that. Why so many trucks for 50 jobs? You could do that with yourself and one other guy. Sounds like a waste of time.
     
  4. martinfan06

    martinfan06 LawnSite Senior Member
    Posts: 631

    Might want to do some hardcore research on this that number sounds really high for only 50 accounts. It smells fishy to me.:confused:
     
  5. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Posts: 1,776

    This sounds extremely fishy. 1. The net profit margin does not coincide with the contractual income. 2. That is a high resale value for a (couple) trucks and equipment. 3. You will be dependant on a market that (obviously) the owner could not be dependant on. 4. You have no repor with the clients. And so on...
     
  6. jake65

    jake65 LawnSite Member
    Posts: 75

    He can't guarentee the 50 accounts will sign up with you. You may want to place a dollar ammount for the equipment only and counter offers until you both agree. Then, based on how many accounts sign with you within a given time, you can determine a dollar amount based on how much these lawns that id sign will net you.
     
  7. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Just do the Math--
    You are making an investment and the investment is PROFIT only,
    He has two trucks doing 90K a year- way off so I would guess that he is not close to being right with profit. But just for kicks lets say he is. Most Businesses run between 10 and 15% profit. At the high side -15% is only $13500.00 a year. or a 5% return on your money. You will do much better in a bank as you will earn interest and still have the 250K.
    If you buy this business I believe you will lose much of your principal.
    Bad deal here. Ask him to show the basis for his price. What will be the cap rate of this -- again DO THE MATH
     
  8. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    True words of someone who obviously understands and knows (this) business.
     
  9. grand93am2003

    grand93am2003 LawnSite Member
    Posts: 9

    they are all or are mostly commercial jobs, dont know if that makes a difference, i am also confused on the return on investment that you were talking about, if you net 85,000-95,000$ were do you get a %5 return? Plus it is a single person doing it so you would not be paying an employee
     
  10. mr.we.mow.grass

    mr.we.mow.grass LawnSite Member
    Posts: 47

    spend $4000 you could make $90,000, and start out with new stuff instead of someones head ache!
     

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