What should you ask the seller of a lawn care business?

As a business owner, there is always a rush to the thought of buying a lot of lawn care customers at once and growing by leaps and bounds. But there is a downside to it too. You never know how long these accounts will stick with you for. You also need to do a lot of investigating to see if the customers are worth buying in the first place. Let’s take a look at a discussion from the Gopher Lawn Care Business Forum and see how a possible purchase is broken down to see if it is a worthwhile investment or not.

One lawn care business owner wrote “I found an ad for a lawn care business that is for sale. Buying it could be a good way for me to build up the size of my business to where I’d like it to be.

The main thing I’d like to know is what types of things should I look for and ask the seller? Also, should I counter the price? The business is up for sale for $75,000. Equipment is a 2001 dodge 2500 pickup, two hustler 60” mowers with 450-600 hrs on them, a walk behind, two push mowers, two blowers, two trimmers and an 18ft trailer.

It also comes with 40 mowing accounts with an average of $6,000-$8,500 monthly gross income. No lawn care customers are on contract but the owner says they will stay as long as the job is good and they are easy to work for. His reason for selling is that he wants to go on to another career path.

A 1/3 of the total sale cost is equipment, 2/3 is for the mowing accounts. It seems high to me. I figure $6,000 monthly at 30 weeks mowing accounts bring in $45,000. On the higher end, $8,500 a month or $63,500 would make this purchase a lot more attractive.

I really don’t know what to do. Buying it would be a huge leap for myself.”

A second lawn care business owner said “this is what I would offer:

I’d say find the market value of the lawn care equipment plus up to $15,000 for the mowing accounts. Because none of the accounts are on contract, I would not pay for the accounts in full up front. I would have to ask him to take monthly payments because you are not sure they will stay with you. Essentially you would be paying an average of $375 ($15,000/40) for each account.

In short, I believe you can start up a lawn care business and get 40 accounts for much less. More of something like $5,000 $8,000.

A third added “when he says different career path it definitely sounds like he’s not making the money he needs or says. I would ask to see his books. He may have went in over his head. How much is he charging per customer? Have you looked at each property and estimating the cost to perform the work yourself to compare it to what he is charging? You need to know if these jobs are worthwhile. Not knowing could lead you to buying mowing accounts that are losing money. If you try to increase their cost, would they leave you?

How old are those mowers? It seems odd to have (2) 60″ machines for 40 accounts. For about $20,000 you should have no problem getting all that equipment and 40 accounts with a little advertising and some word of mouth with good service.

Buy what you need when you need it. As far as buying customers I would be real leery without a contract on them, unless it’s someone you know and trust.”

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