Question on buying an existing business

Discussion in 'Starting a Lawn Care Business' started by buildtothesky, Sep 26, 2006.

  1. buildtothesky

    buildtothesky LawnSite Member
    Messages: 4

    Just want to say hi! this is my first post but i'm a longtime lurker,,great forum with lots of good info,,my question for the experts is this,,I have an opportunity to purchase an existing business with around 80 year round accounts including 3 nice commercial accounts all in a nice exclusive area,,none of these are written contracts but they are longtime established accounts,,most of them for several years,,includes 3 decent commercial mowers,97 chevy truck,16' trailer,5 sthl machines,2 blowers and a bunch of misc equipment,,total sales on mowing accounts only are at 125K,,2 full time employess,,the mostly absentee owner nets around 60K on these accounts after all expenses,,he makes additional off other services mulching,,shrubs,trimming etc but i'm not considering that,,,,he is asking 107k,,is this too much? or is it in the right ballpark?
  2. Thirdpete

    Thirdpete LawnSite Member
    from Chicago
    Messages: 236

    eff that. they're not written contracts so for all intents and purposes, no agreement exists. there is also almost no way you could get commercial work without contracts.

    what i would say is, if he wants to visit all the customers and they all sign your contracts, maybe consider it. but no contracts, no money, period.
  3. Surf'n'Turf

    Surf'n'Turf LawnSite Senior Member
    Messages: 326

    Definately high.

    PMLAWN LawnSite Gold Member
    Messages: 3,534

    Think widget-- that is what this company is doing, making widgets,
    You are investing in this company-- What is the value of the equipment, what is the overhead, check into the books and have a good accountant go over them with a fine comb. What is the profit that this company throws off after all expenses, that is what you are buying sans equipment, figure a ROI from that and decide,
    As far as if the accounts will stay -- you will know that better than we would, but look into that.
    Bottom line is your accountant should tell you if it is a good deal, not us we do not have open books to look at.
    This is nothing but an investment-- is it a good one.

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