Discussion in 'Starting a Lawn Care Business' started by mike007, Mar 2, 2007.

  1. mike007

    mike007 LawnSite Member
    Messages: 36

    Hey guys, Ive started a Landscaping business that I want to focus on and an opportunity has presented itself to purchase a "turnkey" lawn service from an acquaintance of mine. Hes got primarily commercial accounts with some residential. I haven't seen the books or equipment yet but he said "if" he sells the bus. is worth @25k. Since he knows and likes me and I did him right on a truck awhile back he said 14k to me only. He grosses @42k / yr. As far as equipment I know hes uses J.D. Lawn tractors (more $ than you could buy at lowes). I know this guy and hes a straight shooter. He works for me at me full-time job and hes retiring the bus. I talked him into at least starting this year and selling the bus. instead of just quitting (which is why hell cut me a deal). I know zeros are the way to go, and Ill add 2 new j.d. zeros (I was going to buy anyway). But what do I do with 7 mower and 6 trimmers? Its all new or 1 season equipment. This will definitely pay for itself in about 1.5 months. Plus he said if I wanted he would work for me this season to show me what each account is looking for and to "hand-off" to the customers. What do you guys think? Money doesnt exactly grow on trees but I cant turn this down. Any opinions or advice? Mike
  2. toac

    toac LawnSite Senior Member
    Messages: 349

    Why is he getting out of the business?
  3. mike007

    mike007 LawnSite Member
    Messages: 36

    Hes retiring from both full-time job and business. He was going to just call the accounts and stop but I talked him into one more season.
  4. prizeprop

    prizeprop LawnSite Senior Member
    Messages: 822

    Find out what he nets from that 42k gross. If he's solo its probably a pretty good net. Sounds like its got potential for a good deal,depending on equipment included,how long he's had the accounts, and the smoothness of the transfer of customer base from him to you. Say he nets 30k, you could be making a profit in about 4 months(assuming a 8-9 month season). Just from what you described, its something to look into further in my opinion.Truck and trailer?
  5. JeffW0011

    JeffW0011 LawnSite Member
    Messages: 182

    I was in a situation very similar to yours when I first came here. A guy was wanting to sell me his existing business and customer base. I was already getting into this business when I came across him. In that case he was selling mostly residential with only a few commercial and was claiming he did about $20k off those residentials. He seemed like a straight shooter too, and he was going to help me get started this summer da da da....At any rate he wanted $5-6K for those 15 accounts. Or about 20k for his whole set up. My first question on this board was what should I do? About 15 guys replied, and everyone of them said don't do it!!(buy the customers). I also called two longtime friendly acquantainces I know who have been in this game a long time and have done very well. They both gave me a resounding No!! It's to easy to get customers in this business....they all said... I ended up buying nothing from this guy. I went with all brand new equipment and 2 weeks after turning him down, already have 6 customers through word of mouth alone and I have not even started to advertise yet. I spent about $1000 on marketing/advertising materials that are just starting to arrive at my house.....if I even get a 3% return across the board in terms of regular customers and generate some steady vacation cuts throughout the season off my marketing, I will be maxed out. The good news is, it only cost me $1000 to get thos customers. In my case I got about a 30 account capacity for this summer. I don't think I will have any problem reaching my goal. If I would have bought his people I would be half booked for the summer and it would have basically taken all my profit on that half to pay him.

    In this case, if you have some good commercial accounts in this deal, with signed contracts the people plan on honoring, there may be some real value...
    I would be very careful buying accounts though. I was told by these guys it's way to easy to get business in this game and they were all exactly right.
  6. mike007

    mike007 LawnSite Member
    Messages: 36

    Well, hes about 90% commercial, but hes got some really nice jd equipment that I could use for my landscape gig. He nets about 50% of gross and hires help rarely (his wife helps). He grosses roughly 2k/week and I figure hes got 10k or better in equipment so the accounts would cost 4k. I would rather have a Zero but I figure to buy one as well just to speed things up and make time for more accounts that I get on my own. Like I said if he sells to someone else hes asking 20k, but Ive known him for a few years. We're not exactly best friends, but probably more than acquaintances. He has no kids to give this bus. to and want to retire from it. My instincts say go for it ( so does my wife). I would definitely get a list of equipment and look at the books first. Oh yeah, hes prepaid for a year business phone.
  7. the undergraduate

    the undergraduate LawnSite Member
    Messages: 51

    Most likely those commercial accounts are contracted yearly... what happens if you lose half of them next year?
  8. clcare2

    clcare2 LawnSite Member
    from indiana
    Messages: 224

    How much equipment are we talking? I can equip. a 2 man crew for 14k. and both mowers are new. If he has mostly commercial accounts, you probably have even less of a chance to keep the accounts. Most of my commercial jobs have contracts. You would probably have to re-bid. Save yourself some money and give him a grand just for the client list, so tha you know when they come available. and buy your own equipment.
  9. mike007

    mike007 LawnSite Member
    Messages: 36

    Thanks, I think Im just going to keep getting my own accounts and buy new equipment. You guys have been doing this longer. Thanks for everyones advice.
  10. prizeprop

    prizeprop LawnSite Senior Member
    Messages: 822

    If you have more time,dont be in such a rush to turn it down.Look at his books first and do a search for other threads on buying accounts,etc. Research it a little more. Sure its pretty easy to get accounts @ $25-30 a cut, but it takes at least a couple years or more to get quality,well paying accounts. My gut tells me from your post that if he's doing this part-time and making a good net, There's probably some good paying accounts on his list.Just my opinion.Good Luck.

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