PDA

View Full Version : Purchasing price of clients?


DuckDuckGoose
02-18-2009, 01:12 PM
There's a guy trying to sell 21 clients with a yearly gross of $37,280. He's asking $21,000 for them but there are no written contracts, only verbal agreements. All but two are residential. Are the clients worth that much?

IntegrityGuy
02-18-2009, 01:21 PM
Ask if he cares if you have all of his customers sign contracts and the ones that dont sign you dont want.

DuckDuckGoose
02-18-2009, 01:25 PM
Thats a good idea. Does the price of $1000 a client sound reasonable or is that too much?

Fife Lawn&Lane
02-18-2009, 01:39 PM
Can you afford to service those clients for the $16280 for the first year? ($37280-$21000=$16280) or $775/client average.
His pricing works out to $1775/client I would be looking more in the 25-30% of total / client than his 56%. You also need to convert those to written contracts with you.
Try countering his asking price with something like a %. So for every contract that signs with you pay him a % of the total seasonal amount.

lawnwizards
02-18-2009, 01:54 PM
Thats a good idea. Does the price of $1000 a client sound reasonable or is that too much?

i'd give him 3k if they signed an agreement and they stayed the whole year. also have a clause to if they cancel you get a prorated portion back. goodluck. just think what 21000 in advertising would get you. a whole heck of a lot more than 21 customers.

burge19
02-18-2009, 02:25 PM
Yeah i agree with lawn wizard if you advertised with that much money it would get you a lot more. Plus i think that seems way high for only 21 accounts

Woody82986
02-18-2009, 02:39 PM
I don't think they are worth near that much... and especially without written contracts. Without a contract on them and a contract from each of them okaying the switch, I wouldn't pay more than $100 each for them.

Dave_005
02-18-2009, 05:52 PM
I would pay ONLY the amount of 3 cuts and ONLY for the ones who signed with me. if he doesnt have Contracts for these accounts then what are you going to pay for ? $21,000 for just 21 accounts that may go else where anyway ?

nickroqs
02-18-2009, 05:52 PM
Generally I don't like buying accounts, as there aren't really any guarantees that come with it. Money like that is probably better suited on advertising.

Rayholio
02-18-2009, 08:25 PM
The REAL question is.. could you spend $1000 on advertizing and get 1 customer?? I think so... I think $100-$300 per customer is a more reasonable number.

IntegrityGuy
02-18-2009, 09:32 PM
holy cow. 1000$ is alot of money and way too much. I buy accounts from 50-150$. I give them what they get for a months worth of work from the customer.

tradeyouraccounts
02-18-2009, 09:44 PM
Some other things to consider is retaining a percentage of the purchase price until all commitments on both sides have been completed. This can be held in escrow. Also the accounts should be guaranteed for an agreed upon time period. During this time if a customer cancels service other than negligence of the new account holder these accounts should be replaced with accounts of the same value or the amount paid returned. After negotiating down the price see if the seller would consider sweat equity.

LouisianaLawnboy
02-19-2009, 12:24 AM
There's a guy trying to sell 21 clients with a yearly gross of $37,280. He's asking $21,000 for them but there are no written contracts, only verbal agreements. All but two are residential. Are the clients worth that much?

WHAT!:hammerhead::hammerhead::dizzy:;);)

I just bought about 25 accs for 4,000.00. I thought that was high, but 21,000 is highway robbery.

capnsac
02-19-2009, 11:27 AM
There's a guy trying to sell 21 clients with a yearly gross of $37,280. He's asking $21,000 for them but there are no written contracts, only verbal agreements. All but two are residential. Are the clients worth that much?

What the crap? He wants 21,000 for 21 contracts? $1,000 a piece? Whatever that guy is smoking get me some. :hammerhead:

Seriously though, offer him 2 cuts at his current rates for each client. That is as high as I would go for just prospects, because they could switch lawn companies instantly if they find out someone else will be servicing them.

Rockin Cajun
02-19-2009, 01:41 PM
I bought 30 accounts from one and then i bought 22 accounts plus equipment from another. none of them had contracts, but i gave a deposit and i made a deal to where i called each and every customer and told them that i would be taking over there lawns and i got 100% to stay. so to me it was worth spending the money for garenteed work.

capnsac
02-19-2009, 02:38 PM
I bought 30 accounts from one and then i bought 22 accounts plus equipment from another. none of them had contracts, but i gave a deposit and i made a deal to where i called each and every customer and told them that i would be taking over there lawns and i got 100% to stay. so to me it was worth spending the money for garenteed work.

What were your aquisition costs of the accounts?

Rockin Cajun
02-19-2009, 06:09 PM
less than 10k

RTEnt
02-20-2009, 09:13 AM
A few years ago a guy tried to sell me a snoplowing route as he was going more into the commercial market. He wanted .50 on the dollar with only a verbal guarantee. I offered him .10, needless to say we couldn't come to terms. Long story short- he didn't find a buyer and I picked up 40-50% of the clients for nothing. I did however already have a pretty solid customer base in the area so I was fairly visable. If you are already working in the area the clients in question are probably already aware of who you are. If you play your cards right it may not cost you anything to grab the work

RTEnt
02-20-2009, 09:18 AM
A few years ago a guy tried to sell me a snoplowing route as he was going more into the commercial market. He wanted .50 on the dollar with only a verbal guarantee. I offered him .10, needless to say we couldn't come to terms. Long story short- he didn't find a buyer and I picked up 40-50% of the clients for nothing. I did however already have a pretty solid customer base in the area so I was fairly visible. If you are already working in the area the clients in question are probably already aware of who you are. If you play your cards right it may not cost you anything to grab the work

tcalb2
02-20-2009, 10:18 AM
I would be careful with this one, I had another company I know try the same thing with me. He wanted 15k for roughly 14-16 accounts. Some commercial, but nothing huge. It’s ridiculous that they think their accounts are worth more then anyone else’s. In my opinion take it for what it’s worth. 21 accounts is a part time route, and he is asking the kind of money for a full time route. I'd tell him thanks but no thanks. There’s plenty of maintenance work out there, don't need to buy it.

gmlcinc
02-26-2009, 10:50 AM
less than 10k

If you don't mind my asking, how did you work out the deal? A percentage? So many cuts per customer? I'm in a similar situation and am trying to figure out the best way to do it.

TheCanadianLawnRanger
02-26-2009, 12:42 PM
I think his price is too high.. I bought contracts last year and paid on 16%. which is about 4 cuttings.

Rockin Cajun
02-26-2009, 01:03 PM
Ok when I make deals I look for both parties to benefit. So first of all you need to know the reason the business is for sale. Does the person not have enough time? Is he tired of cutting grass? Once you know this then you will know what the person is in need of. If you can work out a deal to meet their needs and still stay within your budget, then you just made the deal beneficial to both of you.

TheCanadianLawnRanger
02-26-2009, 07:51 PM
ok when i make deals i look for both parties to benefit. So first of all you need to know the reason the business is for sale. Does the person not have enough time? Is he tired of cutting grass? Once you know this then you will know what the person is in need of. If you can work out a deal to meet their needs and still stay within your budget, then you just made the deal beneficial to both of you.

great advice

DuckDuckGoose
03-09-2009, 12:47 PM
Thanks for the advice yall. Deal never worked out and I'm using the money for more advertising and update some old equipment.