should I buy this business for $60,000

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

  1. Oxmow

    Oxmow LawnSite Senior Member
    Messages: 488

    Most banks, I think, won't lend you money for advertising, but will for equipment. That is if you don't have 60,000 lying around. I guess you could collateralize what equipment that you do have...or your house.
  2. danillac

    danillac LawnSite Member
    Messages: 10

    What did that one in Elk River look like?
  3. TMlawncare

    TMlawncare LawnSite Bronze Member
    Messages: 1,199

    We are in the middle of purchasing another company as we speak. I have spoke to several different owners about what works and what does not. The final answer on how much the accounts are worth depends on the accounts. If the accounts are really nice and profitable you might expect 2-3 times a month gross. If the accounts are decent enough and still attractive for you company 1-2 months gross might be more in line. The one thing that has been repeated over and over is not to pay in one large sum. Pay it over 4-5 months with the agreement of an acceptable churn % and what happen when you go beyond that number. Also a 3-5 year non-compete clause is mandatory. Good luck.
  4. danillac

    danillac LawnSite Member
    Messages: 10

    Glad my buddy did tell me about this site. Everyone on here was a lot of help. I offered money up front for equipment, full price, $37,000. And after that 2x monthly contracts of however many customer signed the contracts that he already sent out. $6000/month would equal $12,000 more on top of equipment. He did not take offer, told me I was low balling him, he already spent $800 on a lawyer writing up the contract, yada yada yada. In addition, he did agree to 3 year no compete plus no compete on contracts signed this year. He wanted me to sign 3 year no compete on landscaping and pass all landscaping on to him. I can't do that. He did lower his price from $60,000 to $55,000 to $52,000. I am starting to wonder why he wants money up front so bad. Something fishy going on.
  5. danillac

    danillac LawnSite Member
    Messages: 10

    plus 3 more years on the contracts that were signed this year for a total of six years on contracts signed this year. Me not being able to make extra money on weekends doing landscaping is a major hang up. Looks like I'm moving to Wisconsin for the job I still have right now.
  6. JContracting

    JContracting LawnSite Bronze Member
    Messages: 1,878

    3 yr no compete on any installs, ha. What a shady prick. What's the company name?
    Posted via Mobile Device
  7. CowboysLawnCareDelaware

    CowboysLawnCareDelaware LawnSite Senior Member
    from DE
    Messages: 589

    I just re-read the original post, your offer was more than fair. If you do work out a deal, you need to fully separate from his company.

    DON'T keep the same name, and don't let him have any say in anything that happens to his business.

    Are you sure the income/profit numbers he gave you were just from the lawns and not lawns and landscape?

  8. zimmatic

    zimmatic LawnSite Senior Member
    Messages: 416


    Where you able to purchase the accounts? I see the seller has most if not all the equipment now listed on cl
  9. CowboysLawnCareDelaware

    CowboysLawnCareDelaware LawnSite Senior Member
    from DE
    Messages: 589

    I tried to buy a second company this offseason today, but it's currently a no go for now.

    He was asking $160,000, he had $20,000-$30,000 in equipment and will continue to do approximately $2,100 per week in the season. It would take 3 years to break even, maybe longer due to expenses for each season.

    I offered $25,000 for the equipment, even though I felt it was only worth $20,000. As well as 2 months income from the company which would be another $19,000.

    He declined, saying that he wasn't planning on going below $140,000. He will not be continuing due to health so he must sell, so I told him to call me in mid-March (knowing that he wasn't going to get a better deal).

    The only reason I did offer as much as I did was because I will need to buy a couple larger mowers anyway.


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