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View Full Version : High School Kid "selling out"


procut
06-23-2006, 05:18 PM
I know a high school kid who has been mowing for a few years, and now after graduation he wants to persue other things. He came to me wondering if I wanted to buy his accounts, which consist of 24 residentals, all in neighborhoods that I alreay service. However, none of them are under contract. Now I am in the posision to add a few more residentials, so I think it could be a good oppertunity for me. I was thinking 3X the weekly mowing price for each one that agrees to sign with me. Your opinions???

chesterlawn
06-23-2006, 05:42 PM
I think it should be ten percent of the cuts for the rest of this year .

SCAG POWER
06-23-2006, 05:54 PM
Lets see pay for yards in an area that you all ready mow in ???

This is what i would do , keep doing a good job for the customers that you all ready have in that area. Because we all know how home owners like too talk among the self's. Be patient and just may be some or most of them will wounder down and ask you what your fee is.

In buying accounts you need some type of grantee that they not only will use you but also stay with you during the whole year and not shop around for a cheaper price.

I have never bought any type of aacounts and my best ones came from me getting out there and getting them , leads from other guys in the business just do not seem to pan out, unless you like picking up junk.

mslawn
06-23-2006, 07:32 PM
I bought 18 accounts in Feb. for the price of 2 cuttings on each from a fellow getting out of the biz. I have kept them all so far and make excellent money off them. Give it a try, life is a gamble. It was a good addition to my other 150 or so accounts.

mslawn
06-23-2006, 07:34 PM
P.S. I have also spent way over what I paid for those accounts in advertising so far this year and still have not even come close to picking up quality accounts like those 18.

BSDeality
06-23-2006, 07:41 PM
I did the 3x price thing a number of years ago, I kept all of them the first year and dropped only one the second due to a problem with a scumbag not paying me. the others I still service. If they're in your areas then I would say go for it, it'll keep your route tight.

K.Carothers
06-23-2006, 08:33 PM
Pay nothing!

There is no customer loyalty in this business when the current lco leaves and a new one takes the place- it's all up for grabs! Even if someone buys those accounts, the customer will have ZERO loyalty towards the new owner.

Sit back and wait. When he sells, fly the neighborhood!


kc

Howard Roark
06-23-2006, 08:38 PM
Ask him for the house numbers so you can take a look, then start door tagging each one heavily.

Sandgropher
06-23-2006, 08:59 PM
Years ago when i was doing it before, i brought 130 customers people told me to expect to lose 10% over the year i lost one person, make shore you get introduced to each personally some you can build up a good rapport from day one, you may lose one to start with but very unlikely, one of the best ways to succeed is buy say 50 customers when you are starting out(or what you can afford) and you have a strong foundation to start with.....these are usually top notch custs/ pita usually weeded out......check each lawn with him and also the price make shore not under priced, some people sell customers and tell you some could do with a price increase :nono: this is where you lose new customers but putting up the price straight away..:nono:

garth1967
06-23-2006, 09:16 PM
thats for sure.the first thing i would be thinking about is the fact that this guy is a teen there is a good chance they may be under priced.if that was the case and you bought these accounts and then put the prices in line with yours chances are you will lose them.my advise is investigate the facts thoroughly

BSDeality
06-23-2006, 09:18 PM
i should add something. when I bought my accounts I was personally introduced to all of the HO's and knew the pricing and made sure they were priced as high or higher than I would like.

procut
06-23-2006, 10:15 PM
Thanks for the replies. I will be personally introduced to the home owners. I think he may have low-balled some of them. The ones that are too cheap, I won't take.

Jpocket
06-23-2006, 11:44 PM
Just pay attention to where the accounts are...and advertise to them once he officiall stops serviceing them. Cost you $100 or less.

topsites
06-24-2006, 03:49 AM
Ask him for the house numbers so you can take a look, then start door tagging each one heavily.

I certainly would see about picking some up but I would not do that, something
about what goes around comes around. As for what you do, that is your business.

But yes, I would let that stuff out in the free market myself without spending a dime.

LwnmwrMan22
06-24-2006, 09:02 AM
Break down the cost of paying for the accounts.

I have no idea what these accounts are worth in your area, but say they're $30 / mow.

That's $90 / account, or $2160 for 24 accounts, if you were to give him 3 mows.

What's your profit margin on a $30 account??

If you're profiting $10 / account, then it's going to take you 9 mows at each account just to break even.

If you're profiting $5 / account, it'll take you 18 mows (probably the rest of the year, if not more) to break even.

Also, how much do you normally pay in advertising?? Especially how much do you pay in advertising to acquire 24 accounts??

These are questions that you're going to have to break down yourself, since we don't have any idea what your numbers are.

bullethead
06-24-2006, 12:05 PM
As mentioned earlier, compare your advertising cost per customer acquired to your cost to buy them from this kid. My bet is that it will be cheaper to buy them if you are currently doing any serious advertising. The other plus is the proximity to your current routes, that's worth its weight in gold in my opinion. Further, by purchasing them you will have your foot in the door first - which is a significant part of the battle

Also, structure the deal where you pay him part of the purchase price upfront with remainder due towards the end of the year based on your ultimate customer retention rate. Bueno suerte.

procut
06-24-2006, 02:13 PM
Advertising to get 24 accounts of this quality in this area would be very difficult. You would spend a fortune, with no gaurentee it would work. These are all fit into my route very nice. One of them is actually right next to one of my accounts. He also has two others that are right next to each other.

I met with the kid this morning. He hasn't low balled too bad. Some of them are a little less than I would charge. However, there are a few that he is getting a good price out of. For example, there is one, where if I were asked to quote it today I would say $35-$40, but he is getting $50. Another I would put at $25-$30 he is getting $40, so it kind of works out. He took me by most of them, and they are actually pretty high end residentials. Four of them have irrigation systems. He also gets lots of requests for extras. He does have one commercial account, a small screen printing shop and he mows the islands for a HOA. So the origional plan still stands, I give him the cost of three mowings for each one that signs with me. Half up front, and then the remainder 90 days later. If any of them cancel for ANY reason, I do not pay the remaining half.

July 1st is the set take over date, which is coming up. If anyone esle has any suggestions or opinions, let me know. Otherwise, thanks for the replies, and I'll try to remember to post how it works out.

Likestomow
06-25-2006, 12:06 PM
3X seems too much for being this far into the 2006 season. I would offer 1X or even a flat $25 each.

jbailey52
06-25-2006, 03:12 PM
buyin accounts is ok.... if you have to cashflow.. we just reached 500 accounts... so buying accounts now would be a 75 account minimum with contracts extending 12 months.

Dashunde
06-25-2006, 04:21 PM
Tell him yes you'll buy them... with a personal introduction and a "Hi, this fella is going to take over my client list, he does a nice job and that is why I selected him to take over" type of conversation.
Contract as many as possible.

If the guy wants your money, he needs to be willing to do the validating walk-through and introduction. Otherwise you might get it in the arse if his clients dont understand whats going on. ;)

jbailey52
06-26-2006, 09:30 PM
Thats true.. nothing worse then a customer who feels they have 'just been sold' also... several guys around here have done the 'we had someone steal most of our equipment, and until we get everything settled... my friend X is going to be helping me out..... if he does a nice job.. noone ever asks when your going to be taking over again