Is this a good buy????

Discussion in 'Starting a Lawn Care Business' started by luisv1, Aug 24, 2009.

  1. luisv1

    luisv1 LawnSite Member
    Messages: 1

    I have the opportunity to purchase some lawn equipment with 17 accounts for $18,000
    The package includes

    2007 Toro Z Master Commercial - Zero Turn 48" with 233 hours 2 years left on warranty

    6 by 12 utility trailer
    Echo Weed eater
    Echo Edger
    Echo Blower
    The 17 accounts will yield 1700 a month.

    The owner is a friend of mine who is selling half of his business. The agreement is that we will work together until July 2010. He will help me service my 17 accounts and I will help him with his 14 accounts. He is going to take care of all fuel expenses until July 2010 for all our accounts together. We will also be using his equipment "only" until July 2010 to service all our accounts. Therefore I will have the equipment he sells me to myself to gain my own accounts.

    Does this sound fair for $18000
    opinions please
  2. Sean Adams

    Sean Adams LawnSite Gold Member
    Messages: 3,597

    The short answer, in my opinion, is no, this does not sound like a good deal. I am not saying that the equipment, trailer, etc. is not worth money, but it is everything else you described that makes me weary.

    Buying accounts in general can be tricky and their value often for me at least depends on how they fit into my business and business plan and whether or not they are under contract.

    And the fact that your friend will still be in business is recipe for disaster and the possible loss of a friendship.

    If you have $18,000 to spend, I would say go out and find some decent used equipment and market your service inexpensively to start - there are plenty of ways to do this and in the end they will be clients you will be able to work with from the start and know what they expect and set your prices for the kind of work you do.
  3. hate2work

    hate2work LawnSite Member
    Messages: 90

    Is this a good deal?

    It sounds like he's trying to sell you some blue sky. No doubt HE put the $18k value on the equipment.

    But the truth is, the answer is in the details. Is this a verbal agreement? Will you have a contract with him? How well do you know him? When do you have to pay him? Will the $1700 go to you from now til next July?

    Keep in mind the equipment will be one year older next July when you go on your own...I'm just sayin'

    Most importantly, how do YOU feel about this deal? If he is trustworthy, there is some merit in taking over an existing business, especially if you think the experience you will gain from working with him has some value.

    I'm not sure if more friendships have been sunk by money or girls, it might be a toss-up. Be careful :)
  4. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    how much debt is involved ? and how much of it will you be purchaseing
  5. MarcSmith

    MarcSmith LawnSite Fanatic
    Messages: 7,157

    you are in florida, there is a huge market for LCO's its a year round (for the most part) in tampa.. 17 clients is barley a days work..

    mower 3-4K
    trailer 2K
    2 stroke eq- 500 so even if you value the equipment on the high end... maybe 8k

    you are spending 10K on clients. No contracts plus you still are having to compete with your friend.

    1700 per month gross mean you are netting about 5-800 in profit.. is that 1700 each month or only in the summer? in Tampa you end up only cutting 1-2x in the winter months...
  6. dvog

    dvog LawnSite Member
    Messages: 91

    Invest the 18,000 in your own company.
  7. LouisianaLawnboy

    LouisianaLawnboy LawnSite Silver Member
    Messages: 2,199

    OK, let us break it down.

    The equipment is basically worth NOW about 7-8 thousand dollars. So you would be paying 10,000.00 for 17 customers.

    With that type of money, I think you could advertise and get a WHOLE lot more than 17 clients.
  8. SLMGT

    SLMGT LawnSite Member
    Messages: 245

    Sounds like the best way for one of you to lose a good friend. Read the advice that these guys have shared and do your own thing.

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