Buying another lawn Co.?

Discussion in 'Lawn Mowing' started by JD GROUND SERVICE LLC, Feb 5, 2006.


    Messages: 22

    A guy I know has around 35 accounts (NO CONTRACTS). Hes probably got around 30000 in equiptment including his 2001 F350 v10 dually stake bed truck. Asking 50,000 for it all, again nothing in contracts. How would you look at this , too risky or what. My partner and I were thinking 40,000 but might not be worth the risk. Thanks for any info.
  2. Jpocket

    Jpocket LawnSite Silver Member
    Messages: 2,282

    I'd give him whatever the truck and equipment is worth, and give him a few extra$$$ to take you around and intoduce you to the clients AND draft a letter to them. say like $1,000
  3. Soupy

    Soupy LawnSite Gold Member
    Messages: 3,125

    First off, do you think the equipment is worth $30,000 to your operation? Do you need it?

    Since there is no real industry standard for pricing it could be hard to say what those 35 lawns are worth. Do they fit in with your pricing?

    The real question is. How much would it cost you to obtain 35 equally profitable lawns? That is what they are worth to you.

    Then you need to ask yourself if you need the equipment. I understand you may need to throw another crew together to service new lawns. But do you need that equipment. Can you put together a cheaper more efficient setup.

    You then balance the above questions to determine what the company is worth to you. I would say it's worth more to a new start up looking for a foot in. To an established company it might be easier to just market for 35 new lawns and buy the appropriate equipment.

    None the less, you should make an agreement to purchase each account separately. If it cost you $200 for every new customer you gain, then that is what you should offer. Lets say you offer $7,000 for 35 clients. For every client that does not give you a fair chance of keeping them then you would deduct $200 from the $7,000.

    The above is just an example. Use whatever your cost per customer is. Don't forget your time as an expense.

    If I was lucky and it does cost you $200 per customer and you did need/want the $30,000 in equipment. Then I would say the company is worth $37,000 to you. That doesn't mean it isn't worth more or less to someone else.
  4. Soupy

    Soupy LawnSite Gold Member
    Messages: 3,125

    Those 35 clients are worth more then $1,000 if they fit your pricing. If you have some magical marketing plan that obtains 35 clients overnight for $1,000 then I want to know about it.

    I do agree that they are not worth $20,000.
  5. Metro Lawn

    Metro Lawn LawnSite Silver Member
    Messages: 2,116

    As a rule. We buy accounts without contracts for the sum of 2 cuts. ie: average lawn $30.00 x 35 customers x 2 cuts is $2100. We double the price for those with contracts or $4200.00.
  6. Jpocket

    Jpocket LawnSite Silver Member
    Messages: 2,282

    Give me $1,000 and I will get 35 new clients in MY MARKET, if not close to it.

    I got close to 20 last year, and it cost me just over $400.

  7. lawn_pro

    lawn_pro LawnSite Senior Member
    Messages: 284

    $30,000 in equipment for 35 accounts?? no wonder this guy wants out.
  8. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    Have you priced a Ford F-350 V-10 dually stake bed lately? They ain't exactly giving those babies away. A friend of mine bought a used F-250 V-10 extended cab last year for $27,000.
  9. meets1

    meets1 LawnSite Gold Member
    Messages: 3,857

    I have bought out other LCO's. I viewed as a way to expand RIGHT NOW but the money has to be there in order to make things work. Right now - only thing I would do differently would be to dump his equipment ( if it isn't much) you don't want to pay for junk, run a year with it, nickel and dime it to get by and then justify to upgrade. I have yet to retain 100% of cliental. I think it stems from there happy with past LCO but now is a good time to jump ship to someone else or simple start doing this service themselves.

    40K is sounding steep - actual value of the FORD is unknown to me. If that truck is worth $25K, I would offer him 25K for truck, $2400 for accounts, $2600 good will - totaling $30K. I am assuming all accounts are res. not 15 acre commercial accts?
  10. freddyc

    freddyc LawnSite Senior Member
    Messages: 578

    The substantial amount of the business cost is to buy the truck. You can buy a truck anywhere. Unless you have no equipment yourself, adding on a $30K debt (or purchase) just to maybe get 35 lawns sounds wrong to me. You're in lawncare, not the used car business.

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