purchase vs starting new??

Discussion in 'Starting a Lawn Care Business' started by southfla, May 28, 2007.

  1. southfla

    southfla LawnSite Member
    Messages: 45

    Hello everyone and thanks for taking the time to read my post...

    I have been out of the industry for about 4 years and have relocated to Fl.
    I want to ditch my corprate job and get back into the lawn/landscape industry.
    I have been looking into purchasing an existing lawncare company. At this time I have limited info on them but there yearly sales are 352k and the adjusted net to the owner is 157k per year. They have 5 emp that have been with the company for 4 years. The company itself has been operating in the area for 11 years and everything is sba approved. The prior owner got approval for an E2 visa via the us government.

    The asking price is 300k with 60k down. Again the sba has approved everything and the loan is 10 years. What does everyone think????
    75% of gross sales is lawncare ( they handle large commercial prop - same ones for 5 years ) and 25% is landscape. They do no marketing and have no website. The owner is there 50% of the time as his crews are very experianced and know the area.

    Just looking for a little input. Thanks in advance for any advise
  2. southfla

    southfla LawnSite Member
    Messages: 45

    does anyone have any valid input
  3. privatelawn

    privatelawn LawnSite Senior Member
    Messages: 301

    First id say if I spent $300k on advertising id have a billion customers...
    Second its hard to net $157k from 352K gross...
    and even then it would take 2 years to recoup your money as if you start your own from scratch you can just buy the equipment and spend $10k on advertising and be on your way
  4. southfla

    southfla LawnSite Member
    Messages: 45

    Privatelawn - thanks for the reply...
    just wanted to make it clear they did not spend 300k on advertising that's the cost of the comany ( of course that's what they are asking). They back backed up sales with 10 years of tax records thats why the sba has approved it. I know it cheaper to purchase equipment and start your own but I need to get a return to pay the bills if I quit my corp job. starting new I might not have that and everyone has a lawnmower down here and willing to undercut you. I feel better getting into the bus ( down in s. fla ) on the commercial side - which I hope would make some of the small undercutters go away because of the insurance/ lic etc

    Any one else have any thoughts
  5. MeadowsLawnCare

    MeadowsLawnCare LawnSite Member
    Messages: 192

    IF you can really make that in a year it doesnt sound too bad. 2 years to recoup your losses when buying a business that large is not at all unreasonable. When one of my previous companies would build a new store it would take 10 years + to pay off the new expenses completly. I would talk to some of the clients and make sure they will resign with you if you assume control and maybe get a little feedback how the company does business.
  6. Cutman007

    Cutman007 LawnSite Member
    Messages: 81

    I bought two smaller lawn Service companys in Broward County. Six months apart. Things have worked ok. I repeat ok. Things change when a new owner takes over. I was also in the biz before. If you can make a profit from the start it dosen't matter if it's $30,000 or $ 300.000 IMO.
    Good Luck!
    I'd be very careful dealing with people in South Florida.

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