Your Opinion of buying another Company

Discussion in 'Lawn Mowing' started by bmarotta, Dec 29, 2007.

  1. bmarotta

    bmarotta LawnSite Member
    Posts: 28

    I have not been doing this for very long. I started my landscape business about 7 months ago. I only have 36 Residential accounts and one larger Commercial account. I am in the process of purchasing another Maintenance company and have it narrowed down between two different companies. Here is my dilemma. Both Invoice about the same amount. One has half the amount of clients but the invoice amount is quite a bit larger per client. Is it better to have more clients for the same money.

    Here is my thinking (I have gone back and forth on this)...The business with less accounts is done in a day and a half less than the one with more accounts. That would allow more time for marketing. However, if I lose a few accounts during the transition, the sting would be greater than losing a few of the lower dollar accounts. There seems to be more risk involved with having less accounts.

    What are all of your thoughts?

    Also, the smaller amount of accounts business has much better equipment than the larger. However, the larger comes with two F150's with only about 60,000 miles. The larger comes with a van with 115,000 miles E150. This is confusing me.

    I have read some real good feedback on this forum and I would like to get advice from those who might have more experience with this than me.

    Thanks:confused:
     
  2. KS_Grasscutter

    KS_Grasscutter LawnSite Gold Member
    Posts: 3,335

    I'd go for the one with fewer, higher dollar accounts. Actually, if I was in that position, and they were priced right, I would buy BOTH of them...
     
  3. bmarotta

    bmarotta LawnSite Member
    Posts: 28

    I wish I had the money to buy both. Unfortunately I only have the money to buy one. The density on the less account business has high density as well. However, they are located only in one small area. The other has high density, but in basically four different areas. I almost see that as a positive in that it is higher exposer. I go back and forth.
     
  4. ACA L&L

    ACA L&L LawnSite Bronze Member
    Posts: 1,108

    You nailed that one! And go with your gut.
     
  5. bmarotta

    bmarotta LawnSite Member
    Posts: 28

    What pros and cons do you guys see that I (unseasoned) might not have thought about?
     
  6. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    Forget about the vehicles they will come and go. The fewer accounts the easier it is to pay attention to them. Also fewer people to complain. Fewer bills to mail out and fewer checks to sign. If you have concerns about keeping the clients happy maybe this is too soon for the purchase.

    Your guys only produce income when they are on a job and while driving around will get you noticed it will also expose you to more risk. I know who ipod and Nike are but I don't own any of their products. Being known is good for the ego but it dosen't pay the bills.
     
  7. bmarotta

    bmarotta LawnSite Member
    Posts: 28

    Az Gardener...Thank you for your input. Very good points.
     
  8. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    You really need to take a deep look into those accounts, either or both could be under priced, then it could be the guy with more has them all tight while the other guy covers the entire county, but as a rule of thumb less for more wins.
     
  9. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    You are researching too shallow in my opinion.

    You're evaluating the surface of each business at this point.
    That can be very confusing, misleading, and dangerous.

    Really, you have to be enough of a qualified buyer to be able to afford to bring in a neutral 3rd party advisor... if the seller is not motivated enough to just open his books to you. Know what I mean?

    The important decision making factors often lie deep in the nuts and bolts details of the operation and finances.

    My wild guess is that you will find the lesser business to have more attractive internal details. Smaller, tighter, lighter, leaner, with less overhead and less time invested.
     
  10. bmarotta

    bmarotta LawnSite Member
    Posts: 28

    I have dug as deep as I possibly could. I have quickbooks transaction list, memorized list, P and L's. I also have 2005, 2006 tax returns. W2's for 2006. I have done route drive alongs with both. I have tried to be as thorough as possible. Even though I have not been in the Landscape business for long, I have had other business.

    it seems the concensus is less for the same is better.

    Envy, You are correct in that the lesser has a higher quality client.
     

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