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K.Carothers
06-27-2006, 10:37 PM
I met someone that paid $1200 for 10 basic lawn accounts.
Are there more people that are willing to do this? If so, I think I might just go out and build multiple 20 accounts per route and sell for $2400.

Personally, I would never pay that.


kc

topsites
06-27-2006, 10:42 PM
Me, either... For the main reason that it's not my problem.
Even if the Lco were willing to go door-to-door with me and talk with the customers to see how it goes, I'd still not pay more than what it costs me to advertise for mine / conversion factors, minus a 20-odd percent loss rate as well, maybe 500 dollars tops, 250 down and 250 after I earn at least 1,500 off the whole lot.

So, it costs me $1,000 / year to advertise and next year will be closer to $1200 but this gets me 20-30 new customers every year so we're talking $40 - $60 per converted, paying customer. Granted, I waste a lot of time giving free estimates but at the same rate I like to go out anyway because it's easy work lol and for an excuse to take the car out for a ride and to keep my mind sharp.

Sandgropher
06-27-2006, 10:45 PM
In Aussie a basic round sells for 50% of total income for the year, say $25000 for a gross of $50000, for this you get the equiptment to, if a rounds really compact with high prices it could be worth up to 100% of the gross, where else can you buy a business that pays for itself in the 1st year ??

MMLawn
06-27-2006, 10:50 PM
Sounds like nothing more than 1 months revenue.....actually a decent deal if they are under contract and if you need the business. If they service them say 9 months out of the year then they walk away with $10,800.00 for their $1.200.00 investment.

K.Carothers
06-27-2006, 10:52 PM
If you pay 100% of gross, how do you pay for all the other expenses?

This will not get paid off in the first year.

I wish we could get that for accounts in the states, I would of made my second million by now.


kc

Sandgropher
06-27-2006, 11:04 PM
If you pay 100% of gross, how do you pay for all the other expenses?

This will not get paid off in the first year.

I wish we could get that for accounts in the states, I would of made my second million by now.


kc

Yes you are right you would 'nt get your money back from 100% gross, but should be close at 50% and it would take you years to get there advertising from scratch in a lot of areas if you didnt buy the business, 99% of people buy into a business if they want to be successful in Aussie because all the hard work has been done for them, you get up to 4 weeks training as well.

K.Carothers
06-27-2006, 11:07 PM
Yes you are right you would 'nt get your money back from 100% gross, but should be close at 50% and it would take you years to get there advertising from scratch in a lot of areas if you didnt buy the business, 99% of people buy into a business if they want to be successful in Aussie because all the hard work has been done for them, you get up to 4 weeks training as well.


I agree about what it takes to actually build a business. People just don't put a value on that.

We all take on here about no paying for someones accounts and at the same time want our businesses to be worth millions(myself included).


I've built 4 pizzerias and sold them. The sale price was different for each one. It had little to do with gross sales.


kc

AintNoFun
06-27-2006, 11:08 PM
i agree...

Sounds like nothing more than 1 months revenue.....actually a decent deal if they are under contract and if you need the business. If they service them say 9 months out of the year then they walk away with $10,800.00 for their $1.200.00 investment.

jsf343
06-27-2006, 11:13 PM
Sounds like nothing more than 1 months revenue.....actually a decent deal if they are under contract and if you need the business. If they service them say 9 months out of the year then they walk away with $10,800.00 for their $1.200.00 investment.

Mike is right on, form what I have read and seen a good going price is typically 1 to 3 months gross . Of course there is always a lot of variables, are they on contracts? are they prime accounts? in good locations? on and on. I guess it depends on what you are after and what you are willing to pay AND how it would help your business.

K.Carothers
06-27-2006, 11:15 PM
Mike is right on, form what I have read and seen a good going price is typically 1 to 3 months gross . Of course there is always a lot of variables, are they on contracts? are they prime accounts? in good locations? on and on. I guess it depends on what you are after and what you are willing to pay AND how it would help your business.


They are basic cuts.

I think I might just start selling customers.

No more headaches.


kc

All_Clear
06-27-2006, 11:22 PM
They are basic cuts.

I think I might just start selling customers.

No more headaches.


kc

Being the middle man isn't always profitable...

K.Carothers
06-27-2006, 11:25 PM
Being the middle man isn't always profitable...


I agree but this would be.


kc

Surf'n'Turf
06-28-2006, 12:52 AM
$1200.00 for 10 is not bad....hell, would you be willing to pay 12k for 100 acccounts provided they were decent? or spend 12k (be sure to include your time running around doing estimates, paperwork and communicating with potentials) in advertising and marketing and see if you get 100 reliable clients all in one shot.

lawncuttinfoo
06-28-2006, 10:11 AM
Me, either... For the main reason that it's not my problem.
Even if the Lco were willing to go door-to-door with me and talk with the customers to see how it goes, I'd still not pay more than what it costs me to advertise for mine / conversion factors, minus a 20-odd percent loss rate as well, maybe 500 dollars tops, 250 down and 250 after I earn at least 1,500 off the whole lot.

So, it costs me $1,000 / year to advertise and next year will be closer to $1200 but this gets me 20-30 new customers every year so we're talking $40 - $60 per converted, paying customer. Granted, I waste a lot of time giving free estimates but at the same rate I like to go out anyway because it's easy work lol and for an excuse to take the car out for a ride and to keep my mind sharp.


Where do you advirtise? I paid $2700 this year for 80,000 1/2 page inserts in local newspaper and got 6 accounts. 2 years ago I paid $800 for 1/4 page ads mixed with full page inserts and landed 1 customer.

One of Three
06-28-2006, 12:29 PM
Where do you advirtise? I paid $2700 this year for 80,000 1/2 page inserts in local newspaper and got 6 accounts. 2 years ago I paid $800 for 1/4 page ads mixed with full page inserts and landed 1 customer.

Ouch...that's gotta hurt. I would stay away from that sort of advertising. Not that it's not effective in whole, just in your area.

smburgess
06-28-2006, 01:27 PM
The very general rule of thumb is the selling price for a business (equipment included is 1 to 10 times annual revenues. This is what a business broker told me a few years ago. I've bought a couple lawn care operations, one I paid $75,000 for that was grossing about $250,000 a year. The other one I paid $15,000 for and it was grossing about $125,000 per year. I felt both were good deals based on client lists, equipment included and profit margins.

I feel that taking the asking price into consideration and if the profit margin is there for just buying accounts, why not? As long as you can provide the same or a better level of service there shouldn't be a concern.

old dog 80
06-29-2006, 10:04 PM
Sounds like nothing more than 1 months revenue.....actually a decent deal if they are under contract and if you need the business. If they service them say 9 months out of the year then they walk away with $10,800.00 for their $1.200.00 investment.
I bought a business lock,stock,and barrel for $13000 sevearal years ago at 15
accounts.Payable in three yearly installments.The owner,an older gentleman
failing in health taught me far more than 13,000 worth!!!He worked with me a couple days a week all that season as part of the deal.It also got me in another
class of residential clients that has been a gold mine for the last 15 years.
It would have been a bargain at 3 times the price

mslawn
06-29-2006, 11:42 PM
I met someone that paid $1200 for 10 basic lawn accounts.
Are there more people that are willing to do this? If so, I think I might just go out and build multiple 20 accounts per route and sell for $2400.

Personally, I would never pay that.


kc

You must not advertise much. You would probably spend way more in advertising just to get those 10.

nfarr
06-30-2006, 07:47 PM
Where do you advirtise? I paid $2700 this year for 80,000 1/2 page inserts in local newspaper and got 6 accounts. 2 years ago I paid $800 for 1/4 page ads mixed with full page inserts and landed 1 customer.

I have spent about 4K this year and picked up 59 Weekly mowing and about 10K in mulching, edging, spring cleanup business. I live in the community that I target so I paid attention last year to types of advertising that caught my attention. I service clients that have homes and neighborhoods like mine.
I figure what works to get me works to get them. I did 100K direct mail pieces targeted at certain zips, mailbox fliers( before the fight starts, I asked the mailman in each neighborhood if it was illegal, if the answer was no, I stuck them on the side, they all told me it was ok if I did not place them in the box) and postcards.

I tried inserts in local and regional papers last year, spent $600.00 got one customer.

nfarr
06-30-2006, 07:53 PM
I feel that taking the asking price into consideration and if the profit margin is there for just buying accounts, why not? As long as you can provide the same or a better level of service there shouldn't be a concern.

I agree, it seems comparable to justifying the purchase of equipment. If the equipment pays for itself and generates additional profit then it makes sense. Otherwise you should not.