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View Full Version : Purchase Price - Accts and ZTR??


lcncapo1
10-13-2008, 07:26 PM
Hey Guys, there is a local co selling off his residential accts as well as a ztr.

the info he has given me is that there are 22 accts avg price of $25 per mow, none under contract. also 13 Plowing accts as well. they are all located within my customer route or very close. also the ZTR is a 2005 ferris 60" w/suspension, 1000 hrs. so far he wont separate. what is this package worth?
he doesn't have a price in mind but he said he will accept any reasonable offer. my main interest is just the accts, but could use another ztr.


btw, i don't mean to be a dick, but given the nature of some of the people and posts on this site, PLEASE no smart ass comments or meaningless B.S.
To those that can offer helpful info, thank you and it is greatly appreciated

Thank You,

Rob

djchiodo3
10-13-2008, 07:39 PM
The 22 -$25 per cut accounts are worthless if they are not long term contracted accounts. I can't help you on the plowing. I don't plow. The only thing you are guaranteed with the purchase of this small business is a used mower.

dura to the max
10-13-2008, 07:40 PM
his prices seem low, they better be some small lawns if you want to make anything off them. thats $550/week IF theyre all weekly. thats IF you can keep the accounts. im not attacking you personally, but you have no guarantee that you'll be able to keep the customers, customers are so fickle...sounds like a risk w/ a lot of chance and not a great chance at a good reward.

most i would give is $3500 (or the price of the ZTR). IMO the lawns really arent worth giving him a dime for.

Scagguy
10-13-2008, 07:45 PM
It's worth whatever the Z is worth. Nothing under contract is a deal killer imo. So the question is.....do you need another mower?

Richard Martin
10-13-2008, 07:50 PM
Make him up an offer where-by you pay for the mower now and the customers that stay with you for a set amount of time. This is how I sold my uncontracted accounts in MD and it worked out real well for both myself and the 2 companies that bought my accounts. I sold the accounts in May and they owed me for the accounts that they still had at the end of September. They paid up with no problem.

dura to the max
10-13-2008, 08:07 PM
^^^^^^^^sounds like a plan to me...

lcncapo1
10-13-2008, 08:45 PM
i pretty much figured thats what the general response would be which is what i agree with. say we can set it up like you had said , where i pay him for each acct in july or august (provided that they are still current and paying customers), what would each acct be worth? how do most price contracted accts? fyi, the usual mowing season for me is roughly 30 cuts.

Thanks Again,
Rob

Alpha Property
10-13-2008, 09:21 PM
60 inch mower to cut $25/cut properties? seams like a funny combination no?

dura to the max
10-13-2008, 09:24 PM
i would think if you can hold them that long 50% of the yearly value is about right. (this should include only normal maintenance. extras such as straw, mulch, flowers, pruning, etc...are all yours, he need not even know about them.)

Richard Martin
10-14-2008, 05:31 AM
I'd start at as small an amount as possible. Say one month's total receipts. It's a negotiation, don't let him get mad and walk away. This is how it's done.

LushGreenLawn
10-14-2008, 06:27 AM
I'm not making a smart comment here, but do you really want to mow lawns for $25? Is it worth it to drive from one to the next for that price?

Most would go out of business cutting even tiny lawns for $25 that are legitimate businesses, unless their all in the same development.

PearceLawn
10-14-2008, 06:49 AM
I have lawns for $20 that are right next to each other in Rochester. They take a hour or so to complete 4 cut,trim and blow. I also am able to use my 50" to do them. That type of stuff is almost the norm. until you get to the outer suburbs here.

supercuts
10-14-2008, 07:32 AM
my min prices for mowing and plowing is $35 in Ct, the only exceptions is postage stamp sized lawns that ive had over 10 years but even they are up to the $30 range. perhaps thats whey he's getting out, he wasnt charging/making enough. let that be a clue. i agree with richard martin. if your going to be pay, which i would never, for accounts i cant see paying more then 1 mowing price of each account. good luck

supercuts
10-14-2008, 07:35 AM
I have lawns for $20 that are right next to each other in Rochester. They take a hour or so to complete 4 cut,trim and blow. I also am able to use my 50" to do them. That type of stuff is almost the norm. until you get to the outer suburbs here.

being next to eachother you should really be able to cash out on them, $80/hr is not doing that. i think $100/hr should be min solo, much more for 2+ people

PearceLawn
10-14-2008, 07:37 AM
These are postage stamps. $80 per hour without moving the truck is good for a solo. And prices vary everywhere, what goes in Ct. may not fly here. FYI- I would not pay for accts either.

delphied
10-14-2008, 08:39 AM
Even if a $25 lawn is worth doing. Its not worth buying.

brandtb1
10-14-2008, 11:02 AM
I would look at the yards with him and figure out what you would charge. Tell him you will go up to that price on the yards, and if the customer stays, you will pay him for that yard. $25 yards and a 60" mower do not make sense to me either, we are missing something here. Most of the $25 yards I see, a 36" walk behind is almost too big. If they are way under priced, it might be good to walk away from this one.

If the yards are profitable, I would price the mower at what you can sell it for and give 4-5 cuts on the yards for weekly, and less for a longer cut term. If you need a 60" mower to do $25 yards, I would look very closely at the deal. I would also want the payments for the yards stretched out so if people leave you, you are not stuck paying for them.

LushGreenLawn
10-14-2008, 11:22 AM
It seems like every new guy getting into the business cuts out the most profitable part of the business.

When lawns are close, next to each other, easy to do, ect, thats where you make your money.

Does your trash collector offer you a discount because some of your neighbors have the same service? You guys doing small lawns/lawns close together are throwing money out the window for yourselves and everyone else in the business.

delphied
10-14-2008, 11:46 AM
It seems like every new guy getting into the business cuts out the most profitable part of the business.

When lawns are close, next to each other, easy to do, ect, thats where you make your money.

Does your trash collector offer you a discount because some of your neighbors have the same service? You guys doing small lawns/lawns close together are throwing money out the window for yourselves and everyone else in the business.

Im starting to learn that lawnboys dont always make good businessmen.

rsp1961
10-14-2008, 11:46 AM
My experience was that I bought accounts that were not contracted too, and got lucky. I agree that it really depends on where you are in the country that determines price. ALL of the accounts I purchased wanted me to service them, but I did not choose to service all of them. The owner took me around and showed me all accounts, but what I would have done if I was to do it over is to have him introduce me to all the customers. The range of attitudes was so wide and varied, there is no way of what to expect.

It is important for me to look at the different variables involved. Is this customer wanting other services such as landscaping, clean ups, etc.? How far do I have to drive for this account? Are they a good referral source? Many customers only want the basic service for nothing and those are the ones that I weed out ASAP.

I'd offer the sum price of all the accounts for one cut...(this way you will immediately get your money back by just making the one cut, it's a Guarantee!)(20 x $25) or whatever it is plus what you think the mower is worth, IFF you need it. But as advised only after the customers allow you to make first cut. If they do that then yes you should pay for them...It will be your job to keep the customers, raise the prices, or dump them as you feel lead to do. If they do not contract with you then do not pay for them. I told my new customers that I would mow the first time at the previous guy's rate and then decide what the new cost will be. They agreed to that.

slave2lawns
11-28-2010, 10:38 PM
I would have to agree with rsp.

MOturkey
11-29-2010, 10:43 AM
I bought some accounts, non-contracted, this spring. The fellow needed out ASAP due to health problems, and I was the first person he called. He just wanted the price of one mow, payable at the end of the season, for all the accounts that stayed with me. There were about 30 accounts total, some bi-weekly. I lost two immediately, as soon as he contacted them and told them he was getting out I lost one other after one mowing, started doing it themselves, the rest I retained all season, and most all have told me I do a better job than the previous guy, so I'm reasonably certain I'll have all in 2011.

If I had a "do-over", and was starting at the beginning of the season, like you, which I didn't, we were two months into the season, I'd do a couple of things differently. First of all, we'd look the accounts over, and if we agreed any needed a price increase, I'd let him handle that before I took over. I got stuck with a couple that are well underpriced, but felt I had to service them for the remainder of the year at his prices. The "new" guy raising prices is not a good thing. Gives the customer an easy excuse to cancel.

Also, I'd just start the season as if the other LCO was still servicing the accounts. Maybe have him go with you the first couple of mows, talk to the customers that are there, etc. All he has to do is say you are helping him out for a while. Let him do the billing for perhaps the first month, then both of you simply contact each customer and say you are taking over the business. Once they have met you, and you have serviced the property a couple of times, it is much less likely they will fire you.

Also, I am continously amazed how people from different parts of the country try to compare pricing. I have a $25 minimum as well, and a correctly priced $25 yard makes a much higher profit margin per hour than do most of the $50 and up properties I service, primarily because of way less time on the Z. I tried to stay with a $30 minimum, but found I was losing business. Just way too many guys out there who will do it for less. Cost of doing business is also a factor, I don't have to make as much per hour as someone in a part of the country with a much higher cost of living.

hackitdown
11-29-2010, 06:52 PM
I bought a mower and some accounts from a guy this spring. I paid $3800 for 2005 Lazer HP 52" ZTR with collection system with 475 hrs. Then I gave him $125 for each account (there were only 11) that signed up with me. The lawns were typical $50 lawns. It worked out with 9 of the customers, they stayed all season. The true test is whether they renew next spring.