When entrepreneurs first decide to enter the lawn care business one of the first decisions that they have to make is whether to buy an existing business or go with their own independent start-up right from scratch. There are advantages and disadvantages to buying an existing lawn care business as opposed to starting your own. One needs to consider the following pros and cons:
Advantages of Buying an Existing Lawn Business:
1) There is naturally a lower risk in buying an existing successful business than starting a business of your own which has no reputation.
2) With an existing business the staff usually stays with the company and therefore you would not need to do any employment selection and training. This offers peace of mind in that the employees know their responsibilities and the day to day running of the business and the new owner can slowly fit in with the way that things are done and decide if changes need to be made.
3) The suppliers of the business are also in usually in place and therefore one does not need to be too concerned at the start about who would be the best companies to contact when it comes to buying lawn maintenance equipment.
4) If the existing business is well known and established, it can usually continue to generate a profit fairly soon after the take over of ownership without any hindrances or set backs usually experienced by new businesses that are less established.
5) The equipment is in place and apart from a few services or upgrades, business can continue without much delay from the hand over.
6) Contracts and paperwork are usually in place and apart from a few changes you would not need to have this documentation drawn up from scratch.
7) The business’s tax paperwork and documentation should be registered and up to date.
8) Lastly, and perhaps most importantly, with an existing lawn mowing business you will usually inherit a solid base of customers who should stick with you if you make sure that you continue to service them at the same level or improve on the previous owners service level.
Disadvantages of Buying an Existing Lawn Business:
1) If the existing business has not got a very good reputation or the owner did not have a professional mannerism, it could make the marketing and advertising of the new ownership difficult to breakthrough the mindsets of the customers.
2) The current employees may have bad habits and not work well as a team which you would only realize in time after the take over has been completed. This would mean implementing new procedures or replacing some staff members, which could be a lengthy and costly exercise for the business.
3) Old equipment could be a strain on the business cash flow. Repairs and replacement of equipment could hinder work performance and turn around time.
4) If the buyer does not have experience in this industry, he could pay too much for the business which would result in lower profit and higher expenses than expected. It is important to acquire a new lawn care business for the right price, otherwise you may as well use the money that you have to invest in your own independent business.
5) Should you wish to change the company logo or slogan it could be a very costly affair as new documentation would need to be printed, business cards, equipment branding and labeling etc.
6) There may be outstanding debt or tax due from the business that you were not aware of at time of hand over. Make sure that the seller is being transparent on all aspects of the business and that you are fully informed of what you are getting into.
As discussed above there are advantages and disadvantages to everything. It is very important to ensure you have done your research and know what risks are involved either in starting up your own lawn mowing business or purchasing an existing one. Professional advice and solid independent research is always highly recommended either way.
Source by Steve Sutherland