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buying a business

Discussion in 'Starting a Lawn Care Business' started by nodlew, Apr 29, 2003.

  1. nodlew

    nodlew LawnSite Member
    Messages: 1

    i am interested in buying an existing lawn maint business in southern california. The owner has been in business for 18 years, 80% commercial, all work is within a 30 mile radius, its ran by owner and one. The company does $8000 a month and nets $4500 on a 40 hour week, assets are $20,000. He's selling the company because he's moving out of state. Questions I have are:
    1. What is the most I should pay for the company?
    2. What are some important questions I need to ask?
    3. What ins and outs of the company do I need to know to make a sound decision?
    4. What do I need to know about the customers and what should i ask them about the company?
    My thinking is that I could start with this small but existing company that would allow me to learn at a small scale. I currently work in the construction industry so i understand manpower, equipment use, cost analysis, budgeting, etc.
  2. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Messages: 833

    How much do you make per hour in the construction biz?

    That $4,500 is probably the owner's take home right?

    Chop off 30% of it for federal taxes and maybe 5% for Calif taxes.

    That 40 hours week is the employees hours NOT the owners. YOU will be working closer to 60 hours.

    $4,500 / 60 hrs/ 4 weeks = 18.75. Subtract 1.40 for the employer share of SS/mc and it's about equivalent to making $17/hr as an employee. BTW YOU will not get paid overtime working for youself. Do you get OT now as a construction worker? Health ins? Anything else? Workers comp if you injure your back?

    Despite YOU working 12 months a year, the biz will surely drop a little in the winter months, I know it So Calif. but I bet it drops some due to Christimas if nothing else.

    What are you going to do if the helper quits? Or worse if he quits to start his own biz and takes some of your accounts?

    He's not giving it to you so you have to invest prob $50,000- $100,000. If you invested that money in bonds, you would get $5,000 or so. That's another 400-500 a month that you should require from the business....

    And you know HOW MUCH about the lawn biz?

    Questions 1-4 after you say your current wage rate....

    Additionaly use the SEARCH function at the top of this page and you will probably be able to answer your questions.


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