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View Full Version : Buying accounts, help making offer...


sancho_man_orlando
06-08-2007, 09:26 AM
I have been contacted by a local gentleman who wants to sell part of his route. What questions should I be asking such as how much the average invoice receipts per month, are they on contract or verbal for an example.

Also, how do I come up with an amount to offer?

I was told once 2 x's monthly receipts per signed contract.

Any advice for a first time contract buyer?

KTO Enterprises
06-08-2007, 10:17 AM
I would say no more that 10% of the annual revenue of said accounts. Even if they are signed contract customers, they can still ditch you. Figure at least a 10% loss rate.

sancho_man_orlando
06-08-2007, 10:24 AM
An example would be that he has a $125 a month customer, the contract is good through Dec 31st so that means 6 months left x 125 x 10% = Offer?

KTO Enterprises
06-08-2007, 10:25 AM
[QUOTE=sancho_man_orlando;1856918]An example would be that he has a $125 a month customer, the contract is good through Dec 31st so that means 6 months left x 125 x 10% = Offer?[/QUOTE

bingo.
this message was too short so i have to do this

Prestige-Lawncare
06-08-2007, 11:15 AM
An example would be that he has a $125 a month customer, the contract is good through Dec 31st so that means 6 months left x 125 x 10% = Offer?

In other words:

6 x 125.00 = $750.00 x 10% = $75.00

martinfan06
06-08-2007, 11:39 AM
In other words:

6 x 125.00 = $750.00 x 10% = $75.00

Yeah im definitely getting those racks there awesome

topsites
06-08-2007, 02:12 PM
I would say no more that 10% of the annual revenue of said accounts. Even if they are signed contract customers, they can still ditch you. Figure at least a 10% loss rate.

Yeah, and don't forget just over half the season's cuts are done by now, all the fair weather stuff is gone, it gets HOT slow and miserable from here on out, at least until september, then you get another small boost but that's it.
You can do some core aeration and seeding, but forget mulch, that to me is done, I get a few requests for it late in the year but it doesn't make sense because then the leaves come down right on top of it...
On that note leaves *might* do ok, but I don't like counting on THAT to make it.

So, 60% of the yearly revenue is gone, way I see things.
If you give that man 2x months, you'll hardly double that, might as well put an ad in the paper saying "50% off"

You need to, at the very least, go look at a good selection of the accounts in question, make sure you can see what you're taking on... You never know what kind of subdivisions, quality of turf, terrain, etc. And, you need to read the contract, to see how the payola is, maybe it's ok, maybe the customers pay the same month to month, but you have to see this for yourself, how is it worked out.

Then you should be able to make an informed decision.

mikecaldwell1204
06-08-2007, 08:16 PM
Maybe up by you topsites but down here its just getting into full swing, I dont see how he has already lost 60 percent of his income.

Bigray
06-08-2007, 09:34 PM
sancho, rule of thumb here in florida is:
3 to 4 months of gross service and / or
up to 50% of yearly if they are really good accounts and PAYING cust.. bus. ledger will show you that
plus equip.

Bigray
06-08-2007, 09:35 PM
anymore here in florida cust. will not sign agreement's / contract's they are few and far between