Need good advice on buying established business

Discussion in 'Starting a Lawn Care Business' started by mbrooks24, Aug 9, 2011.

  1. mbrooks24

    mbrooks24 LawnSite Member
    Messages: 4

    Hello, I am interested in buying a lawn care business in my area. I have been talking with an established LCO that wants to sell his business. He has a great name in the area and has been in business for 7-8 years. I am setting up a meeting with him to go over details. What information do I need him to gather up and bring to the meeting, I want everything laid out so i can over it and see if hes making enough money to pay the bills? I will right back once I gather info and post it to see what everyone thinks. Thanks
  2. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,724

    Equipment and vehicle lists the ages and condition this will be the bulk of the price. Your going to want customer list this is more difficult but come to an agreement first name and price your going to need to be able to calculate what they can make. Your going to want the last 2-5 years of tax returns. But more importantly you going to want to see his current monthly income and expenses. Your also going to want to know what he owes vendors or banks and know ahead of time whose paying that. Is he being sued is the state after him for back taxes you know the little things that can ruin your whole year if you didn't see them coming.

    Find out what he wants to sell with the business and what he wants to keep obviously if he has some junk you don't want its in your best interest to talk him into keeping it and getting the price lower. Once the assets are figured out your want to put a price on customer list typical is 4-8 cuts per client. So if they brought in 3000 a week in mowing the price would be 12-24k for the list plus assets. Now if he has land or a building the price just went up a lot more but you get the idea break it down and put a fair market price on each item.
  3. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    NO NO NO ...

    the only items you need copys of are the balance sheets from day 1...

    If he has no balance sheets. RUN ....

    YOu want the tax prepairers Discoloser statement " rather form the owner "

    importaint items are the Tax exzemptions from the equiptment.

    has he written off the entire ammount ?

    and be sure you'r NOT taking on the debt too.
    many businesses do this. they will sink the compnay in debt then sell it.

    If a company is NOT structured with MONTHLY balance sheets, you want NO part of it.

    It would surprise me if you or many others here even knew what a balance sheet is....
  4. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,724

    bohiaa I may have written this more from the point of view of absorbing another landscaping business. But you got me curious on a point I know when I have bought used trucks I get to depreciate the price of the truck over a set amount of time they keep changing the tax codes so the years keeps changing. But say you bought out a company and the equipment became assets of your current company wouldn't the depreciation start fresh then for you? Meaning if you spent 100k for used stuff you ought to get to write off 100k the new price was probably 250-400k and any money he got back against that should be the sellers tax issue. But you make a great point if you bought the company to run it as it is you would not get to count items already depreciated.
  5. willretire@40

    willretire@40 LawnSite Bronze Member
    from VA
    Messages: 1,390

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