Buying an already functioning lawn care business is a way to get started with a bang. The upside to it is you should immediately have cash flow and hopefully a positive cash flow at that. But there are plenty of downsides to it as well. You need to weigh the pro’s and con’s before you consider buying any lawn care business.
Let’s take a look at one lawn care business that a member of the Gopher Lawn Care Business Forum was looking into purchasing. Studying this example may help you if you find yourself in a similar situation.
The new business owner wrote “over the last month or so, my husband and I have decided to start a lawn care business. He currently works at a full time job, but is looking for a more flexible schedule. To do this we only want to replace his current income with the lawn care, but some extra money would be great (especially with 5 kids at home).
I drive a school bus and he would do the same in the winter. So that would help pay the bills during the slow seasons. He has talked for years about wanting to mow in the summer, and I think now is the right time.
The plan WAS for me to get the business going by starting out specializing in edging only (an old friend did that years ago, and she was quite successful at it) and doing the work myself, since my husband still has to keep his job. We would take on a few mowing jobs for my husband to do after work to get it going. Then, if we built up enough income in edging to replace his income, we could add the mowing/maintenance service and try to get 60 or so weekly mowing customers.
Since I am not new to the business arena (having run my own specialty painting/faux finishing business for 7 years) I started networking with some business contacts. By doing this I found a friend of mine who owns a contracting business had purchased a used lawncare outfit a few years ago (truck, trailer, mowers, equipment, plow, yard vacuum, etc.) to supplement his services. He has since decided to get out of it. He found that after the expense of paying someone to do the work, he wasn’t making much money.
He’s including the client list, will include marketing the business in a newsletter for 1 year to help me out, and will send any calls for business to me. His truck already has nice logo and I like the name of the business, so we would probably keep that.
I am currently waiting to hear back on the cost, but he said it wouldn’t be much since all the equipment is good, but used. He even said would take payments since we are friends.
Any words of caution, things I should look for, when considering jumping at this chance? Or, would I be better of starting from scratch, and keep going down the same road I was headed?”
One lawn care business owner responded “well the fact that the guy is willing to take payments implies that he is relatively confident you can make enough to make the payments and that is a plus. However, if he said he’s not making enough to make it worth his while, it’s probably not enough for you either. He may be under pricing the jobs or may be managing it poorly. You need to find out which!
If he’s under priced and you buy the business & jack up the rates, you may lose a good percentage of his current customers. You need to find out if his current customers paying per service or contracted monthly?
Another big unknown here is the cost. It’s impossible to even weigh this opportunity out until you know the cost. How much equipment does he have and what it’s worth? How many customers does he have? You said a snow plow is included but you said you want extra income in the summer only. If that is the case, there will be equipment you don’t need or want as you’ll be driving a school bus in the winter. Also you need to check if he includes plowing in the winter time for the current customers. Would you be locked into having to provide those services like it or not?
When I was getting started, I looked at other businesses for sale too and ultimately decided to start from scratch with no loan over my head. The business I looked at had about $10k in used equipment. Plus he had about 130 customers that paid per cut & no contracted customers. I decided against it because he wanted $60k for the biz.
I thought to myself, well many customers are going to be loyal to the guy who’s been servicing them so when a new owner comes in, I figured it was fair to guestimate I might lose 10-15% just because I wouldn’t be the same guy they were used to. I also knew most companies on average get lazy & do a lousy job & or become unreliable. So I figured that I could build my business from the ground up by doing a great job everytime, offering competitve rates & better service.
So that’s what I’ve done so far & it’s working for me. I was able to buy most of the equipment with some cash from savings. A used trailer, new trimmers, edgers, blowers, chain saws, pole saw & hedge trimmer. I financed what I couldn’t purchase in cash, which was a new commercial mower.
Instead of 60k overhead I only have about 1/8 of that debt. In less than a year my business is about half what his was already. Every situation is different and I wish all the best of luck to you! But keep in mind, you will have it easier than me. I had no other income and had to start from customer #1 & build it up. Luckily you are just looking to supplement your income, so this process could be easier for you.”