Expansion- Buying out the competition

[John464]

Thinking of expanding our territory and buying out a company who works outside our normal service area. Owner of this company would become another sales consultant. He wants to get out of the overhead, but is a very good salesman/consulting arborist.



Has anyone who has grown their company and did something of the sort? If not how did you go from servicing a few counties, to servicing the entire state?

Expansion is the topic, proper ways to go about it. Growing your tree care company from a few crews to 4 or more crews. Discuss

 

[ozarktreeman]

This will probaly not help muck,since I see your from jersey.And I,m from small rural are,s of N.E Ar.had the same opportunity last year to buy out my biggest competitor.Which was not much included old chipper,small dump bed,all other mics, equipment.Plus all his referalls.decided not to because of the overhead. lss.guy folded anyway.
I spent no money and still ended yup withh his business.
I guess It depends on wether you can afford to do It.And run the extra manpower.

 

[John464]

I wont recieve this work if he folds, because right now I am not driving that far outside our normal servicing areas. I am looking to have him sell in an area I haven't worked in much, run a seperate branch office/shop/yard. He would become that region's salesperson. Right now I only have two salesman who concentrate in under a 50 mile radius. Currently each recieves a territory. The only difference with this new venture would be a seperate location where more equipment would be and a seperate phone number(his).


He has some nice equipment, half of which Id sell and or switch it up, the other half id retain.

It looks to be a good opportunity. Still in it's early stages as we havent drawn any legal documents up yet.

Would love to hear from anyone out there with those medium size tree care operations.

Didn't the Care of Trees and companies like that start out as a small operation and grew to quite large branches throught the east coast? Did they buy out other companies? How did they do it?

 

[BC WetCoast]

That's how Bartlett and Davey expand. Buy out other companies. All they tend to look for is the customer list and the crew. Equipment is not a large concern.

Have talked to people who were working at companies that were bought out. The final sales price is often determined by the number of customers that can be brought to the new owner and by the number of crew retained.

The big challenge I see would be the change in corporate cultures between your company and his. Can you get the two cultures to mesh?

 

[PurdueJoe]

When I interviewed with the two big companies that are now one (no names) what I was told by the executive types when I asked about expansion and how they came to be where they're at today the simply stated. "All we look for when expanding is a repeat client list". When asked about price they put on equipment they said "by the time a company is ready to sell out their equipment is usually so old and beat up that it is no longer any use to us so we really don't care to much about it" They never mentioned about employees. Just what I experienced.

 

[046]

in today's climate... it'd take a pretty compelling deal to make the jump. loads of deals have been shelved due to uncertainties alone.

make a list of yes and no's

betcha .. more no's will apear

 

[BuddhaKat]

Get a look at their financials. If they're in the red there isn't anything to buy. Don't buy someone else's problems.