Thinking about buying my buddies buisness advice needed

Discussion in 'Lawn Mowing' started by tinkz71, Jun 16, 2008.

  1. tinkz71

    tinkz71 LawnSite Member
    Posts: 16

    I have been offered a fairly resonable deal from a good friend of mine. He has around 45 accounts that pay him $5500 a month and several year round contracts he is asking 35,000. My only problem is that I work a full time job that pays extreamly well that I would be crazy to let go. I currently have around 13 yards of my own. Im at the point I have had to pay a high school student to help on the weeks Im behind. In the price includes a 16ft lawn trialer with a Lesco ztr with low hours and a toro walk behind. He also has a dandy dump trailer in prettty fair shape. I currently have a Leso ztr with just 130hrs on it and its paid for. There are weedeater,s blowers etc. I feel this is a fair price for the amount of income he has coming in plus the amount of equipment. Even though it isnt brand new or extreamy fancy I would think the accounts alone are worth that. I know the accounts because he is the one who helped get me my small buisness start. Plus he is trust worthy because he was my best man at my wedding. I think the only thing that would cost me would a good quality worker and Fuel cost being the biggest overhead. I have a truck and could trade the two older mowers for a new one that would be more productive. I know I have left out alot of little details and questions but overall how does it sound. Any advice from the big LLC guys would be great because you know the overhead for a buisness this size. I will be doing my usual 5 to 6 hrs a day helping the other worker so there is some money saved. Thanks for your help
     
  2. Charles

    Charles Moderator Staff Member
    Posts: 7,866

    Yea that would be many a dream on here. Work a full time job and run a $5500 month lco biz on the side. Too bad its just a dream. The chances of you finding a quality independent worker who would produce that much volume without supervision is not likely. Taking into consideration you helping part-time.
     
  3. KGR landscapeing

    KGR landscapeing LawnSite Bronze Member
    Posts: 1,544

    with 60 accounts its a full 5 days of work pending no weather issues just food for thought.
     
  4. Scagguy

    Scagguy LawnSite Bronze Member
    Posts: 1,522

    If you're not prepared to quit your other job, then don't do the deal. 35K is a lot of money to invest and then not be there daily to protect and increase your investment.
     
  5. derbydon

    derbydon LawnSite Member
    Posts: 82

    Have you internalized a customer loss percentage on this deal?

    There will always be some customers that leave as soon as he sells - always - the question is how many?
     
  6. k911lowe

    k911lowe LawnSite Senior Member
    Posts: 526

    sound kind of greedy.gonna work your self too much and burnt out from worrying.
     
  7. hef37087

    hef37087 LawnSite Member
    Posts: 33

    The only way I would consider it would be to talk to the customers with him and get their input to the deal. Make sure that you would get the jobs, otherwise the price just dropped, because the equipment alone would not be worth the price.
     
  8. supercuts

    supercuts LawnSite Silver Member
    Posts: 2,784

    if you think all that is worth $35k, come out here and ill give you a deal! what are you nuts?? your going to do a full summer worth of work and give it to him?? maybe one week or possibly a month at the most ($5500) worth of work to be paid over is still a lot, plus equip, which isnt even worth all that much. what is a used trailer, ztr and wb worth??maybe $8k??

    i wish i had customers as dumb as this!
     
  9. AI Inc

    AI Inc LawnSite Fanatic
    Posts: 25,298

    Im with this guy, those accounts are not worth a penny over $6k. One months gross is the norm. Flame away.
     
  10. thomaslawn

    thomaslawn LawnSite Member
    Posts: 88

    First off ask yourself if this is really what you want. If you're currently working a full time job and having trouble keeping up with your 15 accounts, just imagine adding 45 more to your schedule.
    The biggest challenge you are facing is hiring the right person to service these accounts without supervision while you are working your regular job. Trust me, this will be a challenge. It is extremely difficult to find good employees that can be trusted to take on that much responsibilty.
    You will most likely be working 7 days a week, become so stressed out that you lose sleep and STILL never be fully on schedule.
    If you are looking to grow the business do it slowly, it sounds as though your regular job pays well and is tolerable.
    Picking up 45 accounts is not that difficult, certainly not worth the 35k. Why don't you double your clientele number and see how that works out. Trust me the numbers sound great, but after all expenses are taken out your $5500 per month revenue is going to equate to roughly $2000 per month. Ask yourself if it is worth the headache for this amount.
     

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