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Biting Off More Than I Can Chew?

3K views 15 replies 14 participants last post by  creeksidelc 
#1 ·
First time poster here. Love the site. Just found it googling around!

I have the opportunity to purchase and take over an 8 year old lawn maintenance service. The company has great name recognition in the area. The deal would include 37 residential contracts and 3 commercial contracts in place for next season. I have spoken with the guy selling - a current co-worker of mine, and he said that I could handle the workload with myself and one employee. He also said that if I didn't add any contracts that I would be looking at around $400-$500/week income, which to me isn't too shabby for just starting out.

My question to the pros is am I biting off more than I can chew? I have little prior experience in the field, and am not a landscaping guru at all. My expertise would be in cutting and edging lawns. I am currently employed full-time and would have preferred to start the business small and part-time while still working my "job". But I think this deal on the table is a great opportunity and I would welcome the challenge of taking the current client base and putting my fingerprint on it and building it into something quite bigger.

I'd welcome any feedback you all have to offer and look forward to getting involved more with the forums.

MM
 
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#2 ·
$400 - 500 a week income? I'm hoping you really meant income, not gross sales. however even for 40 accounts that number seems very low for income after all expenses.

in order to determine the possible profitability we would need to know equipment included (age/hours,) vehicle?, size of accounts, etc.

Edit, Welcome to Lawnsite too, wear boots, because it gets deep in here.
 
#3 ·
Great name recognition and only 40 accounts????

Sounds like a good deal to take over buy not to purchase. No way to have an employee to work that few of jobs and if the work only pays 4-500 a week how can you pay someone. He is a co worker so this business is only part time, And he wants out?? This whole deal does not sound right.
If you want to cut grass look into buying some equipment and doing it yourself
 
#4 ·
PMLAWN said:
Great name recognition and only 40 accounts????

Sounds like a good deal to take over buy not to purchase. No way to have an employee to work that few of jobs and if the work only pays 4-500 a week how can you pay someone. He is a co worker so this business is only part time, And he wants out?? This whole deal does not sound right.
If you want to cut grass look into buying some equipment and doing it yourself
I gotta agree!!! Eight years in Bus and only 40 accounts. He should have been much larger by now (if he wanted to). Why is he selling? That would be my first question. I might woudl consider buyign the equipment and takign over the accounts, but no purchase on the accounts without a signed service agreement. Even still, depending on the scheduleing, you should be able to do that may properties (with a helper) in the evenings and weekends and then grow it to leave your job.
 
#5 ·
I think I may have stated my original comments wrong. The business up through the end of this season is much larger than the accounts I mentioned. However, as he is either selling or closing entirely he only has the number I referenced lined up for next season at this time. I re-read my post and what I should have put was that I would be purchasing the equipment and he would be giving me the contracts. What he has available are 3 commercial walk behind mowers (2 w/ 52" decks and not sure of the other), 2 trailers (1 enclosed, 1 open), and various tools and equipment, along with all the software he uses. I supply the truck.

The income projection he gave me was based after all expenses and after that 1 employee's salary would be paid.
 
#6 ·
Honestly, 40 accounts seems like a little much to jump right into. I doubt if it can really be done part-time with good service to your customers. Starting my own company, I want my customers to feel a nd know that they are important to me. I am choosing to start on a smaller, profitable, customer base that can grow with my expertise.

Also, $400-500/wk. seems a little low. I know that YOU are just starting out, but you are talking about an existing business that should be profitable. I would be questioning the quality of accounts. Don't ever take someone's word for it when it comes to buying their accounts. Even if they are a friend. Business is business. Ask for proof of expenses/gross income. And I would want to meet all of my potential clients BEFORE I buy anything.:)
 
#7 ·
If you are keeping your other 40hr+ job then I would say 40 accounts is biting off more than your can chew.

However, if you are quiting your other job and plan on doing this full time then 40 accounts is not enough.

To further help you we need to know:

How old is the equipment? How many hours are on the mowers? And, most important, how much is he asking for the business?
 
#8 ·
Give him fair market value for the equipment and get started. What alot of people fail to realize is the cost of advertising. You can grow the business from here. With an employee and that small of # of accounts that net of 400-500 per week is probably about right or even a little high, that is about 30% of 1600.00 (40 small accounts? x 40.00 = 1600.00). If they are small accounts also consider not even hiring an employee until you get this rolling and add more customers. That will certainly increase your bottom line.
 
#9 ·
mslawn said:
Give him fair market value for the equipment and get started. What alot of people fail to realize is the cost of advertising. You can grow the business from here. With an employee and that small of # of accounts that net of 400-500 per week is probably about right or even a little high, that is about 30% of 1600.00 (40 small accounts? x 40.00 = 1600.00). If they are small accounts also consider not even hiring an employee until you get this rolling and add more customers. That will certainly increase your bottom line.
Without any prior business experience, that is the best answer imo...
Otherwise you're just asking for it, there are no guarantees in this world, whether 40 acct's or 4,000, you could be down and out by July or August with no experience, man, I wouldn't sink more into it than what the equipment is worth.

And don't plan on cutting every account every week, surely you've put your hipboots on by now?
 
#10 ·
Working a full time job 37 residentials and three commercials will probably be way to much for you alone. As others have state you better think this over,come late july you'll be beggin for winter. How old is the equipmnet if its as old as the business get your own,no kidding !!
 
#11 ·
JMO but your better off starting your own company building it yourself you'll enjoy it more and be alot more proud of what YOU built. Which turns into a great work ethic and business ethic and your business will profit from this attitude.
 
#12 ·
why is the person selling? is all the acct. on a signed contract for 07. is the person going to sign a non-work contract for 2-3 year? which is saying that the person wouldn't start another lawn care in your area for 2-3 years. that would be the first thing I would talk about. you really need to list all the equip. in detail. how long does it take him to mow all the acct.
 
#13 ·
What about insurance? You would need....I think a million dollar policy for the commercial accounts....I am also just ABOUT to start in this biz but with that kind of income from 40 accounts I may never be able to quit my full time job. Not knowing all the specifics I think I would rather start on my own. My 2 cents
 
#14 ·
paul vroom said:
What about insurance? You would need....I think a million dollar policy for the commercial accounts....I am also just ABOUT to start in this biz but with that kind of income from 40 accounts I may never be able to quit my full time job. Not knowing all the specifics I think I would rather start on my own. My 2 cents
Sledge hammer, um what is that for, lol:laugh:
 
#15 ·
Thanks to everyone for giving their input so far. I apologize for seemingly being vague and lacking detail but at this point I'm pretty green and very new :confused:

Anyway, I'm going to look at the equipment tomorrow and see if its what I'm looking for. If you all don't mind my asking questions I'm sure I'll be back tomorrow or the next day to get further advice. If I may now, though, I have a couple of questions that go beyond my earlier ones:

1. How do all figure what amount you will charge for a job? Do you base it an hourly rate? Example being you charge $50/hour and a job takes 30 minutes. Do you then charge $25/job?

2. Are you involved in land scaping and lawn maintenance or just lawn maintenance?

3. For those of you that have been around for a while, are you still out there doing the work yourself or have you grown to a point where you can pay others to do the work while you still profit?

Again, I apologize for being naive. But you all seem helpful.
Thanks.
 
#16 ·
First of all I recomend riding with him a day or two to get a feel for the business. This will let you know how it will be(time, effort and you can see the yards) I think 40 contracts and a job are way to much. If you figure on cutting 30 of those 40 per week that is an additional 30 hrs.(6 hours a day, Mon-Friday) wow. I am not trying to discurage you, just think this through. I know where your coming from, because I am a college student right now. I go to school 3 days a week, and cut about 20 per week. That keeps me plenty busy. If it seems like a good deal, maybe cut back on your current job and try things. Also if you cut 30 a week averaging $40 per cut that is $1200 a week. Good money.
 
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