Buying out a business?!

Discussion in 'Lawn Mowing' started by 2k1yzfr1, Sep 30, 2004.

  1. 2k1yzfr1

    2k1yzfr1 LawnSite Senior Member
    Messages: 539

    A good friend of mine mentioned to me today that after 18 years of part time mowing he's not going to do it next year. He only has about 10 residentials, 5 decent sized commercials, and a couple large groups of duplexes. This year with just mowing alone he said he did about $30,000. The 5 commercials and duplexes are on 12 month contracts and the rest are just billed monthly. My question is how much would something like this be worth??
  2. spin2098

    spin2098 LawnSite Member
    Messages: 131

    I would offer him $3000 maybe $3500 if you want it bad enough. If his equipment is involved another story. He is only bringing in $30,000 right. Is that just grass or is it mulching, pruning and other stuff? I think $3,000 is a good price considering he wont be doing anything and he is going to give it up anyway. Hope that makes sense and helps a bit.
  3. pjslawncare/landscap

    pjslawncare/landscap LawnSite Bronze Member
    Messages: 1,410

    May want to chat with his customers to make sure they are ok with it. Worse case scenerio is they become uncomfortable with u and dump you after u pay 10%
  4. Soupy

    Soupy LawnSite Gold Member
    Messages: 3,125

    I wouldn't pay much at all. He has to few customers, If half of them drop you then you are out big time. Sounds like he has a basket full of eggs there.

    I would rather pay for 50 small clients that brought the same amount, in the same amount of effort. If you lose a few of those, you could easily replace them.
  5. out4now

    out4now LawnSite Bronze Member
    from AZ
    Messages: 1,796

    If only a few accounts are on contract then not much. How much longer do the 12 monthers have to go? At the end of contract even if you fill the obligation they may dump you for a lower fee and then you're out some cash. Get all the residentials to sign 12 month contract and get an extension on the others maybe it would be worth it.
  6. i_plant_art

    i_plant_art LawnSite Senior Member
    Messages: 558

    also make sure you have a contract draw up by a lawyer with a no compete it in that says he cant do any type of lawn or landscape for for X (5) number of years with an X(150) miles radius of your office/ zip code..... that way he cant just " decide " one day to get back into the business and go and low ball ur new customers who he has a repor with and take them form you.this protects you. i did it when i bought a few accounts from a guy and it worked out nice
  7. 2k1yzfr1

    2k1yzfr1 LawnSite Senior Member
    Messages: 539

    He told me it would probably be in the 3-5k range, but I'm not really sure when the contracts are up. I'm sure he would introduce me too all of his clients prior to purchasing so I can get a better idea if anyone has any intentions on dropping me. I just wanted to get an idea as to what something like this might be worth.
  8. Soupy

    Soupy LawnSite Gold Member
    Messages: 3,125

    Are you buying just the clients?
  9. Mikes Lawn Landscape

    Mikes Lawn Landscape LawnSite Senior Member
    from Texas
    Messages: 458

    He said 3 to 5 thats a fair price. But I would pay it as a % of revenue you generate over the next season. That way if the customers dump you, you don't pay.
  10. Five Diamond Lawns

    Five Diamond Lawns LawnSite Member
    Messages: 197

    Do some calculating and split the profit with him the first year. After that there all yours. Pay him as you get payed and he gets a little income throughout the season.

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