Potential To Purchase Business

4614 Views 220 Replies 32 Participants Last post by JFGLN, 6 h ago

PearlWhiteGT

Discussion Starter · 20 d ago

My buddy called me and told me his yard guy is retiring and moving. Said he’s going to sell his equipment and potential to take over his contracts. Has about 50 clients that he takes care of. His equipment is less than 3 years old. 52” ZTR has less than 50 hours and the 32” has 75 hours. All service has been done on the equipment at the local dealer where he bought the equipment and trailer which is a 6x12.

He hasn’t put it for sale or told anyone else about it yet so told me to think about and let home know. He didn’t give a price yet either. Majority of his work are residentials with only a couple of larger properties. His residentials are about $40-$50 range but always gets a tip.

What do you guys think would be a good offer to take everything off his hands?

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monoshock

· #2 · 20 d ago

Guess it all depends on the price.

wmitchell

· #3 · 20 d ago

PearlWhiteGT, Didn't you recently post about starting a side hustle " Going in with my buddy" ?
So, i seems you have no experience, you can't really be serious about buying this company. Please correct me if I am wrong.

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PearlWhiteGT

Discussion Starter · #4 · 20 d ago

wmitchell said:
PearlWhiteGT, Didn't you recently post about starting a side hustle " Going in with my buddy" ?
So, i seems you have no experience, you can't really be serious about buying this company. Please correct me if I am wrong.

You are correct. But I want to do this alone. The owner is willing to help me out with everything he can. I wouldn’t be able to take on all his clients but I’d like to do the ones in my area. He has about 20 or so real close to me. Small yards which I have lots of experience with doing my own.

He would take me to meet all his clients and then up to me to get their work.

PearlWhiteGT

Discussion Starter · #5 · 20 d ago

monoshock said:
Guess it all depends on the price.

My buddy said that he told him $7500 but he didn’t give me a price yet. Told me to think about it and let him know if I’m interested and will go from there.

Scott87

· #6 · 20 d ago

Something doesn't add up 125 hours on both machines a couple years old?. there should be a lot more hours on that stuff if it serviced 50 accounts annually. It looks to be in good shape and $7500 for the equipment and accounts is one of the better business for sale offers we have seen around here.

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SouthEastTurf

· #7 · 20 d ago

I share the same concern. If he has 50 accounts, the equipment should have more hours.

Also that is cheaper lower line commercial equipment.

BTW 7500 for equipment and accounts sounds like a good deal.

You probably can't get hurt too bad on that deal.

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PearlWhiteGT

Discussion Starter · #8 · 20 d ago

He’s only been doing it for less than 3 years. Pretty sure he wasn’t doing 50 yards the entire time. He lives real close to me and said he has 15 yards in his neighborhood. Those are the ones I’d be interested in. That’s about 2-3 miles away from me.

I know the equipment isn’t high quality but feel that $7500 for everything even if it didn’t involve the potential clients is a good deal. Here in my area I could sell everything individually and make a decent chuck of money. But I’d like to try giving the mowing business a try. 20 yards would be max for me.

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Toro44

· #9 · 20 d ago

Sounds like a deal you really couldn’t lose on to me. If you could keep the 20 customers it would save a bunch of time trying to build a route.

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Toro44

· #10 · 20 d ago

I know nothing about world lawn mowers, but if they are halfway decent they are worth $7500

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Mike N

· #11 · 20 d ago

Toro44 said:
I know nothing about world lawn mowers, but if they are halfway decent they are worth $7500

Made in China. The company itself is based in Nebraska and the eastern half of the USA seems to have dealers all over...... yet I don't think I've ever seen a commercial LCO with one, at least not where I live.

They look like a bridge between homeowner and commercial units, but for the initial startup $, they may be worth it.

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Bf services

· #12 · 19 d ago

Scott87 said:
Something doesn't add up 125 hours on both machines a couple years old?. there should be a lot more hours on that stuff if it serviced 50 accounts annually. It looks to be in good shape and $7500 for the equipment and accounts is one of the better business for sale offers we have seen around here.

Agree, but does anyone know anything about this world lawn eguipment? I haven’t seen one of their mowers around in ten years. Thought they went out of business actually.

Rick1111

· #13 · 19 d ago

Well the “clients” are worth nothing they are a dime a dozen so focus on the machinery.!

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brydan

· #14 · 19 d ago

PearlWhiteGT said:
He lives real close to me and said he has 15 yards in his neighborhood. Those are the ones I’d be interested in. That’s about 2-3 miles away from me.

That could be a good customer base to start from. Some years ago a friend wanted to sell his business and individually he had good paying customers but it didn't matter the prices were high because the route density was crap. Couldn't make any money on it, probably why he was selling

wmitchell

· #15 · 19 d ago

In your initial post you say he is retiring and moving. In a later post you say owner has been doing business for less than 3 years. Is the owner financing any of this equipment? With him being new in business odds are his properties are under priced. So every time you mow a property you may be losing money. Are these 20 accounts that you want ,weekly or bi- weekly mows? How many of these will you have to double cut in the spring or longer? How long do you think it will take you to mow this route each week? This is critical since you have a full time job and given your level of experience. Are you ready to be a banker and float your slow pay clients?

If a company hasn't even been in business for 5 years, that's another sign you might not want to buy the business. Watch out if the company has a revolving door of clients. You can check this by looking at his client billing records over 3 years. Do not buy this deal thinking if it doesn't work you can sell equip for a decent chunk of money. You need to get a complete equipment inventory of what's for sale, equipment, tools customer list with email, phone #. Does he have a website and a CRM?

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Mitty87

· #16 · 19 d ago

go do 2 days mowing with you and the guy. If you aren't doing 1200 in work per day or 24 lawns, then they might be worth zero. You will have to raise prices on all of them.

Rick1111

· #17 · 19 d ago

Why?

JFGLN

· #18 · 19 d ago

I would buy for the $7500 if the lawns are priced right.

Mark Stark

· #19 · 19 d ago

Looks like the dude doesn't mow his own lawn....hence the low hours on the China machines.

Regardless, if he's asking $7500 tell him you could do $4000 now and $60 per client retained at the end of the season.

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Derwood

· #20 · 19 d ago

I agree with others who say not to buy with the mindset of selling the equipment and still coming out ahead, if mowing isn’t for you. Also agree you should mow with him (kind of like demo’ing the equipment AND the clients).

No idea if the price is good or not. I wouldn’t want those mowers for half the price he’s asking. But that might just be me - perhaps I’m a fool in that regard. I am also pretty selective on my accounts. I don’t just take on any and all yards/people. I’m selective because some yards suck, and some people suck lol. I don’t do either.

Lastly, there’s little to no guarantee ANY of those clients will stick with you once the company is yours. I’m sure you’re good at mowing your own lawn. Taking on a slew of clients is a whole different ballgame. You just don’t know, what you don’t know. So, if you really wanna do this, work a week with him (or at least the accounts you would want). Try out the customers and the gear you’re buying.

Just my two cents. Good luck with your decision!

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