new to the biz, thinking of buying a cheap one. what do I need to know/ask about?

juntjoo

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  • / new to the biz, thinking of buying a cheap one. what do I need to know/ask about?
I've got some money to buy, and she's got experience growing someone else's lawn care business. we may like working together. between us I've only mowed my own lawn a few times shabbily and repaired my equipment, no pro, but I'm mechanical. But that doesn't really matter as our idea is to go straight into commercial, and set it up (ideally) so that we won't be having to touch the equipment. But of course we could if need be, and I enjoy it myself, but I wouldn't employ myself to do it.

If we purchase this current one for sale, 10k cash, we'd get equipment and I assume crew, still have yet to meet, for 60 accounts, I believe mostly residential, then some commercial. I'll also assume we'll have a couple guys with licences with trucks, but for some reason she's planning that we'll need to hire someone. I'm wondering if this is currently in business why everything wouldn't already be in place. Supposedly we should be able to make our money back within a few months at most. Sounds about right, but we'll see.

So what should we look into generally, and specifically with this potential purchase? What are the a,b,c's of this? Thanks
 

juntjoo

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  • / new to the biz, thinking of buying a cheap one. what do I need to know/ask about?
the term 'P and L statement' is just something I've only recently read about. I'm also wondering about current accounts. Should we inquire about some records for them? Should I have a mech. inspect all the equipment or just give it a good amateur(me) look over. I can inspect deeper if anyone has particular tips on what to look for.
 

bertsmobile1

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  • / new to the biz, thinking of buying a cheap one. what do I need to know/ask about?
There has to be a reason why it is up for sale cheap.
Remember that you do not own the customers so the 60 on the books could all be friends & relations of the current owners.
Down here a lawn care run usually sell for about 3 years net profit.
With 60 customers, unless they are all on 10 acres you should be looking at a small crew .
Check the invoicing book very carefully for hours billed remembering you will be paying the crew for total hours depot to depot.
If they are not billing for at least 6 hours / day you will be working for free.
Check their insurance and make sure the purchase price is for the business unencumbered.
For all you know they may have trashed some ones Ferrari or Roller or have a massive compensation claim aout to drop at their feet
Buying a SERVICE business is always a risk as what your are really paying for is the reputation of the previous owner.
If you are new to the business I would suggest that you start out with a franchise so you have some level of support, or start from scratch.

A customer of mine, started off knocking on the door of houses with badly maintained lawns & gardens and offering a once only discount trial.
He ended up mowing a lot of lawns for free as a once off but gained enough customers to leave his day job and has never looked back.
He still uses this marketing technique.
 

Darryl G

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  • / new to the biz, thinking of buying a cheap one. what do I need to know/ask about?
No.

Edit: Ok, I'll elaborate. First of all, you don't have any real experience and you want to go commercial, yet the route is mostly residential. Good luck putting in big commercial bids with no real idea of how to do the job or bid it. So you're going to just buy a business in a field that you know nothing about and just have a couple of guys do the work that you don't even know how to do, let alone supervise? That doesn't sound like a recipe for success to me.

If the current customers aren't under contract all you're really buying is the equipment and a contact list of people you could try to get as customers. That's worth maybe one month's gross income, 2 if they're under contract. But you need to look at the quality of the current customers and how much they've been paying. The last thing you want is a spread-out route with a bunch of crappy under priced lawns. Then there's the equipment. If it's a bunch of run-down crap you should just pass on it. Your front line stuff that will be run daily needs to be dependable above all else.
 
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