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what should I ask?

Discussion in 'Lawn Mowing' started by spin2098, Jul 7, 2003.

  1. spin2098

    spin2098 LawnSite Member
    Posts: 131

    Well here is the story. I found and add in a local paper for a small lawn business for sale. It is just perfect to add to my existing accounts. However I don't know what I should ask and what should be done. They are going to sell it to me for as much is it will bring in for the rest of this year. Does that sound fair? The contracts are good Thur the rest of this year and all next year. Which means I will see all profit next year. Does anyone have any advice on buying someone out? Any feed back would be great thanks.
  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    I'm not an attorney, but the contracts are with the current LCO. And I would be highly surprised there was some stipulation or legal clause in them that stated they carry over with a new owner/proprietor. My guess is that new contracts would have to be drawn up immediately after the sale between you and your new customer base.

    Best bet is to check it out thoroughly IMO.
  3. Runner

    Runner LawnSite Fanatic
    Posts: 13,496

    I sure wouldn't do it. Not for the rest of the YEARS income! By next year, these people could be getting offers from someone 5 dollars cheaper... Now wouldn't THAT be a coincidence!:rolleyes: Caviat Emptor!!!
  4. Phishook

    Phishook LawnSite Bronze Member
    Posts: 1,143

    Ask to see last years tax return on the Business. That'll give a better idea of how legit these acounts are.

    Then I'd offer no more than 10% of the business anual income. Probably less, it is July.
  5. roscioli

    roscioli LawnSite Senior Member
    Posts: 749

    4 X mowing price. Just put that into another thread too... I feel it should be a standard. Very fair for buyer and seller. Unless he has been in businesses 15+ years and has had the same customers producing the same money each year, it is VERY hard to figure what it would be worth if you look at it from a profit standpoint. 4 X the price of one mowing makes this a very simple equation. If you feel it is worth more to you, go for it, but that would be a special circumstance outside of my equation.
  6. redbull

    redbull LawnSite Member
    Posts: 182

    Make the other cutter sign a non compete
  7. mower_babe

    mower_babe LawnSite Senior Member
    Posts: 790

    I had bought 2 very good condo contracts from a local LCO that is slowly getting out and had the condos sign 2 year contract before I signed contract with LCO to pay him back a weekly fee. In the LCO contract it also stipulated that he had quit claim in the interest of said properties. We paid 1/2 of one years mowing. Yes, kinda high, but this area is gridlocked with other mower people and these are really good accounts.
  8. parkwest

    parkwest LawnSite Senior Member
    Posts: 678

    Spin dude,
    running a business shouldn't be the same as playing russian roulette. Too many unanswered questions but what you would pay for the accounts versus paying a salesman on commission... which one would be a wiser investment... look at the ROI's then do what's best.

    Tell him you'll split the net with him for the rest of the season. In this business, contracts for service are worth about what the cost of the paper.

    Never work for free. If you are to pay him, make it at the end of the contract term of his customers.
  9. Expert Lawns

    Expert Lawns LawnSite Silver Member
    Posts: 2,660

    right on
  10. Runner

    Runner LawnSite Fanatic
    Posts: 13,496

    Oh, eXACTly! And I wasn't even thinking in terms of the previous LCO coming back in,... that's all too obvious. I was thinking more in erms of someone (or others) that he knows.:blob4:

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