I'm in the market for your thoughts......

Discussion in 'Irrigation' started by turfed, Aug 25, 2010.

  1. 1idejim

    1idejim LawnSite Fanatic
    Messages: 11,292

    i could make airstream and pigtail jokes but, you and mike are part timers, doing what you want to do, traveling and pretty much enjoying life.

    what'd you do right, what'd you do wrong and what would you do differently?

    honest questions fimco, no bs.
  2. turfed

    turfed LawnSite Member
    from MI
    Messages: 24

    I hope to answer that question soon. I'll post what i find out. The current owners are clients and family friends of mine. I trust them, but i'm not going to pay an arm and a leg for their "help and advice"

    Messages: 18,668

    I wouldn't do anything different. If I hadn't gone through a gawd awful marriage I wouldn't have a daughter I absolutely adore.

    Having said that I wish I had focused on service contracts. The reality is that you will slow down in life and you need to always be pushing your biz to gross more with less work. I was physically killing myself trying to work like a 30 year old at 50. The money was great but life sucked. The only thing I've really done different is to eliminate all the overhead in both money and time in my life so I can live on a whole lot less and enjoy it.
  4. 1idejim

    1idejim LawnSite Fanatic
    Messages: 11,292

    great answer, pete
  5. Sprinkus

    Sprinkus LawnSite Silver Member
    Messages: 2,305

    Last company I worked for does exactly that.
  6. rlpsystems

    rlpsystems LawnSite Senior Member
    Messages: 472

    1500 cust. Thats awesome. Im dealing with 172 and going crazy....... You are the man. Long winterization period for ya?
  7. WalkGood

    WalkGood LawnSite Bronze Member
    Messages: 1,910

    I'd look more at how much (realistically) the truck, tools and parts stock are worth, rather than the customer list. You can never "own" customers, unless they have a lifetime contract to stay as customers. To me a customer list is almost worthless.

    Also you need a non compete clause with the old owners. You do not want them starting a new company or working with a competitor and taking the customers with them.
  8. DanaMac

    DanaMac LawnSite Fanatic
    Messages: 13,213

    Well, we don't work on all 1500 in one year. We have 1500 in the active list, and I weed out customers every year that have not had service from us in 3 years. We do about 800-900 blowouts. Haven't reached that 1000 mark yet.

    Weird thing is, I have one landscaper that we have been their service department for 10+ years, and this year he decided to do most of it in house and hired a guy. We did probably 10%-20% of what is usual for him. But my gross sales are much higher. I thought we'd be down quite a bit, but just the opposite. Partially because I was always giving him a discount due to volume. But I will probably not have his blowouts which could mean 100 less, but then again I can fill in other new customers at full price because I might not have his to do and more time available. Less blowouts - same gross income. Works for me.
  9. Sprinkus

    Sprinkus LawnSite Silver Member
    Messages: 2,305

    In the market for my thoughts?
    Well.......I think I burnt me finger.
  10. SoCalLandscapeMgmt

    SoCalLandscapeMgmt LawnSite Silver Member
    Messages: 2,129

    You need to look at what you are really buying. The inventory is what it is. It's worth no more than you can currently buy it for so that's not a selling point. The vehicle and the equipment aren't worth any more to you than their depreciated value. Ask to see the balance sheet. Don't pay any more than what the depreciated value is listed at. Inventory, trucks and equipment aren't really selling points. You can go out and buy any of those things very very easily and with the current state of the economy probably very cheaply as well. The only thing that is of any value is the customer list and at that it's only worth a percentage of whatever it generates. If there are 1500+ names on the list but only 700 of them have paid for any kind of service in the last couple of years then the value of that list should be based on that. Like somebody said it's not like the current owner has a lifetime contract with all 1500 people on the list. The seller should have no problem giving you copies of any financial information that you ask for. Have an accountant and an attorney review everything and most importantly have an attorney draft the sales agreement.

    People often have an over valued view of what their business is worth. The work many many years, sometimes for very little pay and so to them their business is worth a fortune when in reality it is worth much less. Also, never buy a company outright. Buy the assets and the intellectual property and form a new company with a similar name or make it a corp or a llc or whatever. You don't want to purchase somebody else's potential liabilities.

    I've looked at buying companies in the past. I still haven't ruled out the potential of buying one sometime in the future but I do know that it would have to be one hell of a good solid deal before I'd part with any cash!

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