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Buying Boss's Company. Need Help

4K views 21 replies 12 participants last post by  greenbaylawns 
#1 ·
I've currently been working for my boss for the last three years and ive been bugging him to sell the company to me since last year. he's finally agreed and we crunched the numbers today and it would cost me about $60,000 to take over two trucks, two trailers, equipment and 120 accounts of all shapes and sizes. Were considering me slowly investing in it until it is 100 percent mine. Is there anyone with experience out there that bought their boss's company? Is the company worth it? any feedback would be awesome!

thanks! :drinkup:
 
#5 ·
That sounds like a really good deal what kind of mowers trucks and trailers are they? The accounts alone would sell for like 30000-50000 around here depending on how much he makes on each yard
It's a gravely 260, toro walk behind 48 inch, 60 inch bobcat. Two Stihl hand edgers, two Stihl trimmers, two Stihl blowers. Two enclosed trailers. A 99 dodge and a 25 dodge with a lot of wear and year aha
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#14 ·
Tell him for 3 years I'll pay you 20K each year, change motor oil every month or so and do all the maintenance on everything else yourself. Bust your azz and GO!! Get a cheap helper, 120 accounts with all the extras that will come with it no brainer pays probably 100K a year minus 20K for business payback = 80K Minus all the crap that comes with a business, 45K plus all the EXTRAS like Fertilizer, Mulch, Bushes, Tree trimming, SNOW, Icemelt and that might just put you back at a 100K! Go get it buddy I don't see a problem just scarred to jump off the fence. Good luck and I hope you do it!
 
#15 ·
Im sure its a short mowing season in MI but even 90k a yr strictly mowing is like $30/cut avg
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I looked at it the same way you did.

If the average cut is $30, something is off. Better ask him to see the #'s before you go any further.
 
#16 ·
Tell him for 3 years I'll pay you 20K each year, change motor oil every month or so and do all the maintenance on everything else yourself. Bust your azz and GO!! Get a cheap helper, 120 accounts with all the extras that will come with it no brainer pays probably 100K a year minus 20K for business payback = 80K Minus all the crap that comes with a business, 45K plus all the EXTRAS like Fertilizer, Mulch, Bushes, Tree trimming, SNOW, Icemelt and that might just put you back at a 100K! Go get it buddy I don't see a problem just scarred to jump off the fence. Good luck and I hope you do it!
Thanks a lot man! Most helpful advice I got! I'm seeing the numbers and doing the math tomorrow I appreciate you taking the time to help me out!
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#17 ·
Tell him for 3 years I'll pay you 20K each year, change motor oil every month or so and do all the maintenance on everything else yourself. Bust your azz and GO!! Get a cheap helper, 120 accounts with all the extras that will come with it no brainer pays probably 100K a year minus 20K for business payback = 80K Minus all the crap that comes with a business, 45K plus all the EXTRAS like Fertilizer, Mulch, Bushes, Tree trimming, SNOW, Icemelt and that might just put you back at a 100K! Go get it buddy I don't see a problem just scarred to jump off the fence. Good luck and I hope you do it!
120 lawns with 1 helper....how are you gonna have time for the "extras"?
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#18 ·
Thanks a lot man! Most helpful advice I got! I'm seeing the numbers and doing the math tomorrow I appreciate you taking the time to help me out!
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He didn't give you advice; just told you what you wanted to hear. Advice would involve discussion on who retains control of decisions while you are in debt to him, who has control of banking, payables, etc. What about your equity should things go south 1.5 years in. See? Jump right in. Nothing to think about.
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#19 ·
He didn't give you advice; just told you what you wanted to hear. Advice would involve discussion on who retains control of decisions while you are in debt to him, who has control of banking, payables, etc. What about your equity should things go south 1.5 years in. See? Jump right in. Nothing to think about.
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yea, this.

One of the things you need to make sure, is, once you make agreements to pay him. YOU become the "Owner" and HE becomes the "Debtor".

Just like buying a house from the bank, you make payments TO the bank, but they don't decide what color to paint the living room.

Once you are the owner (by virtue of entering an agreement and making payments) then you are running the show.

The agreement should also include his availability/retainer (for which I, personally would NOT pay extra, it would be included in the purchase price) to consult for a minimum of one year.
This way if issues come up like "where did this go" , "this customer says this happened" "This job didn't get billed" "this customer is requesting a refund"
"The customer called asking about a job you did for her last spring"
Then the original owner is available to you to answer those questions.

additionally be wary of any previous work done that might still be under warranty, once it's your business you're on the hook for any of that.

Like wise with debt/bills unpaid and especially taxes. (make sure there are no back taxes!)

Workers comp claims etc also can blow back on you.

So you have to check all the books and history back at least 3 years.
If these records are not available, red flag.

I personally believe it is always better to get a job at jiffy lube and start your own side business from scratch than to buy someone else's faltering enterprise.
Rarely is it a rose, more often, it's a turd painted red.

Doesn't mean you can't assume ownership, just means in REALITY… the business can OFTEN be worth less than if he sold all his gear on craigslist.

Once a company is dissolved, his skeletons stay with the entity/former owner.
If you become a NEW owner, you buy all the skeletons.

It's best (in my opinion) to make a bulk offer on his equipment and offer a sales commission for a year for any customers that remain as full paying customers. (no value in dead beats)
The value of the equipment plus a 5% sales commission often works out less than what he could sell his gear for on CL, because you are buying ALL the equipment at once, ad he doesn't have to wait to piece it out to individual buyers (which always fetches the highest price)

So figure the value of all his gear/trucks…. multiply it by .8 and that's the offer for the physical equipment.
Then offer him 5% on sales as I mentioned above.
Pick a new name, do your own articles of organization, and set up an letter/notice to all his current client base that you have bought him out and will now be servicing all the customers under your new name.

That's my advice.
 
#20 ·
I just skimmed through most of it, but has the owner even said that he would fiance the company himself? He might want the $60k upfront and tell you to go find a bank.

He is staying on as an employee? Have you all discussed non-compete agreements? I've mentioned on here before, but my BIL bought out a local competitor in Charlotte, NC. They had about 80ish clients. He held onto about 15 of them. Personally I wouldn't give .02 for "buying" residential clients. If you have commercial accounts with written contracts and you can work something out with them, that's one thing.

To my knowledge It's just about impossible to guarantee that you will keep the residential ones. Which granted if the company is "staying the same" just changing hands withing the company, that may make it easier since the clients will hopefully not see any impact on their service.
 
#21 ·
120 lawns with 1 helper....how are you gonna have time for the "extras"?
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Sub it out, Get another helper, find a way to make the promises done you said you'd do, work 7 days a week, done it all. Pull your hair out, cuss, yell at your windshield and go to the next job. lol I hate this career some days, but I love the mailbox when invoices are coming in.
 
#22 ·
He didn't give you advice; just told you what you wanted to hear. Advice would involve discussion on who retains control of decisions while you are in debt to him, who has control of banking, payables, etc. What about your equity should things go south 1.5 years in. See? Jump right in. Nothing to think about.
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Yep this is true, Don't forget about the business part of it either..This is the part where you'll start pulling your hair out!
 
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