should I buy this business for $60,000

Discussion in 'Business Operations' started by danillac, Feb 6, 2013.

  1. JContracting

    JContracting LawnSite Bronze Member
    Messages: 1,878

    Subscribing. I saw the listing for this on craigslist, I found another in Elk River that I'm going to call tomorrow.
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  2. CowboysLawnCareDelaware

    CowboysLawnCareDelaware LawnSite Senior Member
    from DE
    Messages: 583

    The equipment isn't overkill, the 2003 60" is a full-time back up mower and when your on the large commercial properties you can break out both 60's to get the job done.

  3. clydebusa

    clydebusa Inactive
    Messages: 1,660

    This is what I do also.
  4. dnc19694339

    dnc19694339 LawnSite Member
    Messages: 208

    equipment + 1 months earnings is a great deal for the buyer.
    Not so much for the seller.

    I dont know about you guys but I would NEVER sell my accounts for 1 months earnings. Just my opinion but I think that is ridiculously cheap!!

    I have bought out 3 competitors in the past 10 yrs. I paid around 2 months earnings for two of the biz and 3 times for another and I still think these were cheap, I would buy them all day long at that price!
  5. clydebusa

    clydebusa Inactive
    Messages: 1,660

    ^^^ I understand what you are saying but in the Tulsa area this is about the best you can hope for.
  6. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Messages: 4,358

    True to a point.

    You as a seller don't want to sell so you would want higher dollar. If a seller wants out then he is going to take what is offered, unless he wants to keep them. The buyer wants to offer just enough for the guy to sell, not any more.

    Other thing is in this case the buyer has no other accounts to help spread the cost of the loan or been in the biz to be most efficent. He's going to be paying $600 plus a month for the orginal $40k loan for the next 5 yrs which is going to be a major drag on the company until its paid. The equipment will need major repairs or replacement over the 5yrs which will be hard to keep up with.

    Best case senerio would be buy it see sales double and then should be able to get out of the hole. I just see the loan and the buyer being used to $40k income (his current job) having a hard time being net positive especially if he keeps the employee around for $17/hr.
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  7. dnc19694339

    dnc19694339 LawnSite Member
    Messages: 208

    Right, Every area is different.
  8. danillac

    danillac LawnSite Member
    Messages: 10

    what part of the country do you operate out of?
  9. dnc19694339

    dnc19694339 LawnSite Member
    Messages: 208

    Im in New York
  10. zimmatic

    zimmatic LawnSite Senior Member
    Messages: 416

    Here is a thought

    If you where to take the 60K and spent it on advertising would you be able to secure the same amount of accounts as what the seller is selling? Or spend even 30K on advertising and 30k on equipment. If you think you cannot then buy the company. If you think you can then do so close to where you live/opperate vs traveling 45min accross town.
    If I was in your situation I would not buy the company from what has been discussed on this thread.

    Or if you are set on buying then arrange a face to face with your check book out haveing him see you write out the check with the only thing left is the amount, and drive the price down as I would not want you to spend anymore money than you absolutly have to.

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