Should we Buy this Business need advice please

Discussion in 'Starting a Lawn Care Business' started by Vanessa31, May 25, 2005.

  1. Vanessa31

    Vanessa31 LawnSite Member
    Posts: 16

    Hey guys I need advice on a business that is for sale, I am not sure how much to offer
    here are the details

    SELLER WANTS $49,000 AND THE MOST HE WILL GO DOWN IS $2000.00

    SELLER HAS 66 ACOUNTS THAT ARE IN THE SAME AREA GROSS $5,230.00

    ADDITIONAL WORK-FERTILIZING.MULCHING ETCC IS ABOUT $1500.00




    HE SAYS HE HAS THE FOR ABOUT 10 YEARS OR SO. TEH WORKDAY IS FROM 7.AM-1PM 5 DAYS A WEEK-NO WEEKEND OR HOLIDAYS

    EQUIPMENT-HE SAYS ALL IS COMMERCIAL GRADEE

    6X12 ENCLOSED TRAILER W/REAR RAMP DOOR AND SIDE DOOR

    2005 GRAVELY 44 INCH ZERO TURN MOWER W/ 19 HP ONLY 2 MONTHS OLD


    2/2005 STIHL LINE TRIMMER

    2/2005 STIHL STRAIGH SHAFT EDGER

    2001 GREYHOUND 39 INCH WALK BEHIND HYDRAULIC MOWER

    2/2002 ECHO LINE TRIMMER

    2/2002 ECHO BACKPACK BLOWER


    let me know what you all think, I am new to this kidn of biz so i want to make sure i am making a good choice, I offered him 42k and he said NO. he seems not to want to lower mcuh form the 49k





    he says he does 72k gross a year
     
  2. Toy2

    Toy2 LawnSite Bronze Member
    Posts: 1,924

    Sounds pricey, but then again I'm new to this, I would make sure its in writing that he can't sell to you and then start it up again.....are all of these customers on contracts?
     
  3. Vanessa31

    Vanessa31 LawnSite Member
    Posts: 16

    yes it is pretty pricey but he swears he is giving it away, the customers are not under contract but he has had them all for a long time. the reason for selling the biz is because he says he is moving away. humm
     
  4. dvmcmrhp52

    dvmcmrhp52 LawnSite Platinum Member
    from Pa.
    Posts: 4,205

    Hate to rain on your parade but, To me it's not worth much more than 15,000-20,000.

    With the equipment he's got I'm not sure I believe he's been in business for ten years.

    Buying accounts or businesses in this industry is something to be careful about...........
     
  5. SOMM

    SOMM LawnSite Senior Member
    Posts: 426

    There's only ONE WAY to know if it's really worth the negotiated price:

    Ask for copies of his past 2 or 3-years worth of federal returns on the business - not personal taxes
    (with any personal social security numbers obscured before your copies are made). Go over it with your accountant if necessary, and get your questions answered.

    If he won't show you these he's all smoke and no fire, and not worth dealing with in good faith. If it's worth dealing with, then it's also worth him signing a non-compete agreement for at least 2 years.
     
  6. qwikv6

    qwikv6 LawnSite Member
    Posts: 63

    Why not spend a thousand or two on a good advertising campaign? Newspaper inserts, mailbox flyers, newspaper display ads, etc.

    $49k is TOO much. If he's been "in biz" 10 years, why aren't any of his clients under at least a signed agreement?
     
  7. Tider6972

    Tider6972 LawnSite Senior Member
    from Alabama
    Posts: 649

    Vanessa31, stay away from those business brokers !!!!!!!!!!!!

    As you have been informed, they grossly over-value lawn businesses.

    The principles to purchasing are the same as the last time you looked to buy.

    It is possible you could pay this guy $49,000 and have every single account refuse to do business with you, and you'd wind up with about $6000 worth of equipment for your $49000 !!

    If indeed the customers have been using the seller's services for this long, they are loyal to <i> him </i>, yes, but not <b>you</b> !

    Stay away from this !
     
  8. SOMM

    SOMM LawnSite Senior Member
    Posts: 426

    awesome points A.M & qwik!
     

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