What Would You Do?

Discussion in 'Lawn Mowing' started by His Scapes, Jan 13, 2007.

  1. His Scapes

    His Scapes LawnSite Member
    Posts: 35

    O.K. I have had my own company for 4 years and am doing well for my self.I mostly do maintenance but also do Hardscapes. We moved about 16 months ago about 25 miles north of my service area which is no big deal for me.Where we moved is a rural suburb of Atlanta and there are not really any current lanscapers up here.I was approched this week by someone I have met since living here to take over his maint. division which is all in the area.The catch is he had someone else try this who had no experiance what so ever and he was unable to keep up with it.They want me to buy his equipment, which is REALLY GOOD equipment, for 30K and they will give me the entire maint. division. They only took it over about 5 months ago and I took a look at their numbers and I wasn't real impressed but he was unexperianced.It was about 20k for 4 months.I gross about 80k a year myself.My concern is wether or not to get a loan to buy them out or not.What I am looking at adding to my budget is about 500 amonth in loan payments and 300 a month in rent to share the shop space.I know that I can improve the business they are doing due to my own growth in a VERY populated landscape area.I just want to know WHAT YOU WOULD DO?
     
  2. carcrz

    carcrz LawnSite Silver Member
    Posts: 2,085

    I wouldn't consider buying business. The equipment, yes; business no. There is never any guaruntee that the customers will stay w/ you.
     
  3. Stillwater

    Stillwater LawnSite Platinum Member
    Posts: 4,837

    I will sell you my clients for 30 grand and just go back to my clients a month later and say hear is 200 dollars I want to mow you again fire that guy. you are out 30 grand and I have a fist full of dollars my clients have a fist full of dollars and you coulden't do a thing about it. Now is that not scarry or what. does this answer the question?
     
  4. firefightergw

    firefightergw LawnSite Gold Member
    from Texas
    Posts: 3,340

    I wouldn't touch this with a 10ft. pole. Here's why: You said that there are not really any current landscapers up there, sounds to me like with your experience, you could really tap into this market, yourself. The other thing that concerns me about this guy that approached you is why in the world would he take over something that generated 20K in 4 months and then try to sell it five months later for 30K? He knows he can make more money than he thinks he could by keeping it himself. If a guy with no experience can generate 20K in 4 months just think what you can do. Obviously, you already have equipment and you have been generating 80K a year. Why go in debt $800 a month while you can keep what you have and go after this market yourself? I think it is a no brainer. I think that if this guy ever does find someone, you could easily get a lot of their customers. You already know the name of the company and the problems they have had. Just say NO!
     
  5. PTP

    PTP LawnSite Bronze Member
    from Tulsa
    Posts: 1,383

    If the equipment is worth close to the 30K and you need the equipment, then go for it. The accounts are a good foot in the door and you can use that income to keep you afloat while you build things up.

    The business would be worth substantially more if it was properly run but since it is not (according to you) then it seems that the value of the equipment would be a fair price.

    Now, if you don't need the equipment, then I would simply decline the offer and go after the accounts on my own.
     
  6. newbomb

    newbomb LawnSite Senior Member
    Posts: 391

    I see so many guys here of late talking about buying out someone else. I would only consider that as a last resort. If you have an established business and experience Just keep rolling. Save that money for your needs. Buying someone else's business is hairy at best. As earlier stated, with out contracts it's just promises and sometimes with contracts too.
     
  7. dhardin53

    dhardin53 LawnSite Senior Member
    Posts: 711

    This guy is ofering you the low end of his business and trying to keep you out of his high end. Dont fall for it. He come to you remenber, and the reason he come to you is to better himself In my oppinoin.
    Or is he just being a nice guy? I dont think so.
     
  8. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    My first problem in a nutshell, is the guy approached you!
    As a rule, I don't like that because experience has taught me the chances of it being a bad deal are fairly high.
    Every time someone approaches me, I'm thinking like 'yup, here we go again.'
    It would be different if you had approached him, at least in this case.
    Because I prefer the chances being a little more in my favor.

    More likely than not, it's no good because I can already hear myself saying 'nah, pass it up.'

    Good luck.
     
  9. J&R Landscaping

    J&R Landscaping LawnSite Fanatic
    Posts: 5,096

    If there is not much competition, why not just advertise in the area and land the jobs yourself. If you have the right equipment and a good work ethic (which it seems you DO) why go in debt. Seems like a scam to me. If somebody screws us and grosses 20k, thats quite amazing.

    I've screwed up on some things butt I have yet to screw up like that!!! LOL.
     
  10. jeffex

    jeffex LawnSite Bronze Member
    Posts: 1,933

    it never hurts to make a counter offer! what WOULD you pay?? You could get him to sign a non-compete that prevents him from legally taking back the lawns for say 2 years. Its only as good as your willing to back it up with a lawsuit if he cheats but it may make him think twice.
     

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