PDA

View Full Version : Value of customers


peteloare
04-14-2007, 07:52 PM
A small landscape company with 30 customers grossing 15000.00 per year is selling just the customers with contracts for the 2007 season.
What do you pros feel this may be worth here in michigan?

FIRESCOOBY
04-14-2007, 08:26 PM
Is it year-round contracts?

$15k for 30 customers is ultra low, but maybe I am looking at it from my area. Even if it is seasonal, 30 customers would equal twice that WITHOUT leaf clean-up, aeration, etc.

I'd see if he was willing to let you look at his books from last year, contracts signed with price, etc.

bohiaa
04-14-2007, 09:26 PM
500.00 a customer ? hummmmmm

MOW PRO LAWN SERVICE
04-14-2007, 09:37 PM
$500 a customer is cheap,thatz $16 a cut on 30 cuts a year.

chris638
04-15-2007, 01:23 AM
I've always heard a rule of thumb to go by was one month's gross for all accounts you are buying.

supercuts
04-15-2007, 07:54 AM
I've always heard a rule of thumb to go by was one month's gross for all accounts you are buying.

ive heard this rule but could not imaging paying a whole moths sallary for it, perhaps the one cut price per lawn up to $50 a lawn, those prices sound really cheap though at 15K

topsites
04-15-2007, 09:01 AM
Yeah, there's likely a fair amount of below average turf, the kind with hardly any grass or otherwise weak lawns that only require cutting 8 - 12 times / year, that explains the $ / customer ratio. It's either that or they're totally underbid, or a combo.

You can try cutting those kind of lots weekly, but IME it's not happening, either way I'd want to see a good sampling of the lots.

Still money is money, $500 / customer isn't that bad (try $200-$300 / customer / year), lots like that used to make up close to half of my total customer base and the fact it is $500 tells me there's probably a good amount of nice turf, too... You have to start somewhere and grass is grass, just have to schedule them accordingly and the maintenance on the machines is a bit higher but otherwise there's still profit, up to you.

I like the 1 month's total gross, thou I'd shoot for an average because April or May's gross is likely to be higher than say, August.

SLCINC
04-15-2007, 12:31 PM
I bought out a similarly sized company last season and about 4,000 for the customers, about one months revenue

nobagger
04-15-2007, 12:44 PM
I've always heard a rule of thumb to go by was one month's gross for all accounts you are buying.

That's all I would pay for it and they would all have to be signed with us! We bought out a guy last year and his customer list was great on paper but 5 customer's didnt go with us right off the bat, second year...had 2 of his old customer's drop us. So to me its not worth much at all.