Question on Buying a Business

Discussion in 'Lawn Mowing' started by lsylvain, Mar 21, 2001.

  1. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    How much would you pay for a business with

    73 accounts residential and small comercial year round

    3 exmark w/b with sulkies 60",48",36" all under 20 hrs
    16' enclosed trailer
    86 Dodge 1ton dump
    1 vericut
    All the little stuff


    The price it's listed for seems cheap. Wanted some prices to compare.
     
  2. Joe W.

    Joe W. LawnSite Member
    Posts: 37

    What is it listed for? I would question the "under 20 hrs",they didn't do alot of mowing for all that new equipment.
     
  3. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    Do a search on this subject. But for just the accounts, I'd pay no more than 2 months gross.
     
  4. awm

    awm LawnSite Gold Member
    Posts: 3,354

    If he is selling a buisiness he should be able to show you last yrs records,bills of sale or titles etc.
    If I were going to buy hed have to visit the customers
    or at least let you pick some out at random to visit.
    If most are good money makers,dont give him more for equipment than you think you can sell it for.If you know
    an honest dealer he can probably give you ballpark figures.
    Add up all projected income from accts .Some probably not worth much.some worth alot.Visit the ones that look the
    best, and see if you think they really will stay with you.
    As far as how much to pay .That depends totaly on the figures you came up with . Also how bad you wantum and
    how bad he wants to sellum.GOOD LUCK
     
  5. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    2 months on Monthly income .....year round ....is good ;->

    I bought 50 about 3 years ago (guy was moving up north) we still mow about 40 of em' ....they were bidded good .....all they wanted was good service ....BUT that first month or two a few still sent him the check or a few had pre-paid with him ....so be sure to check each one with the seller BEFORE you pay

    also depends on how long they been doing em' ....do they know what's going on ..are they willing to work with you while you meet the customers ....all you ever get in a deal like this is the opportunity to show them what you can or can't do ....after the first impression they will stay or go

    good luck
     
  6. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    He said he will stay with me until everything is settled basically he'll take me to all of the accounts and introduce them to me. I'm going to try and convince him to let me work with him for a few weeks to get a feel for how he has been treating his customers.

    I havn't seen his financial statements yet so I'm not sure what his gross was.

    Thanks for the info
     
  7. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    How much is he asking for them?
     
  8. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    okay, I talked with him last night here is the complete list

    73 accounts Totalling $60,000 per year last year
    he gets them mowed in 4 days with 2 guys

    1986 Dpdge pne ton dump
    16' enclosed trailer
    60" Exmark 20 hrs mulching kit and velke
    48" Exmark 16hr with bagger
    32" Exmark 12hrs with mulching kit and velke
    Shindiawa pole edger
    shindiawa t-27 whip
    shindiawa t-230 whip
    2 sthil backpack blowers
    Lwsco Hedge shears
    Sthil chain saw
    Back pack prayer
    Lesco blade grinder
    Lesco spreader
    Verticut machine (Robin)
    Sod cutter and trailer
    Auger

    He and his crew will work with me for 1 month to get me settled.

    about half of the accounts he has had for about 10 years

    The deal is he has 1 large business and is getting rid of all his residential and small comercial accounts and keeping all the big one's and opening a nursery. That's why all the new equipment he just got all new equipment.

    he is asking $38,500 $30,000 cash

     
  9. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    He also just picked up 9 more accounts this week
     
  10. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    this is a ?? only your going to be able to answer you'll get lot's of input ....

    even with 2 months gross ...10K all that equip depending on the over all "real" condition might come in at another 10k-15k

    him & worker for one month ....williness to help ...he's been doing them for many years ....calls are coming in ....he'll float $8.5k

    sounds like he is sincere ....maybe a quick "peek" as his last 2-3 years books will help you decide ....I'm not saying don't try to "haggle" him down aleast 5K ....especially if you can show him you have the $$ to back you

    Good Luck
     

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