Pricing to purchase accounts

[hvphotog]

Wondering how one would price out accounts that do not have a contract.. My first thought would be to give 20% of the net for the first season with any account i make money on. This way if the account does not stay with me i am not paying for something i do not get..


Does this sound right, or does someone have a better way to price and buy possible accounts?

[mdlwn1]

Your thinking along the right lines. Keep in mind that small maint accounts are very rarely worth anything at all.

[Stillwater]

that is called purchaseing a lead so it is like tossing your cash in the wind you may catch some and pocket it but not all. you can contact the customers directly and tell them what you can do for them or you can toss the guy a token fee per account that gives you a shot. I would keep any cash exchange very modest.

[hvphotog]

The reason i am thinking for the 20% of net is that if i gross nothing then there is nothing to split and give 20% of.. I realized there is no contract hence the 20% of the NET

that is called purchaseing a lead so it is like tossing your cash in the wind you may catch some and pocket it but not all. you can contact the customers directly and tell them what you can do for them or you can toss the guy a token fee per account that gives you a shot. I would keep any cash exchange very modest.

[hvphotog]

There is one nice commerical account and a two $110 a week lawns i would love to get in there.. another landscaper i am thinking of doing this with has about 40 accounts they have had for years including several commercial ones. I wanted something that would safeguard me from paying out cash and getting nothing in return

[Creative1]

This is just my $.02 and I'm sure some will disagree. Last year I purchased some equipment off a guy w/ the understanding I would get his 12 accounts. I got a great deal on the equipment, thank God, so I didn't lose out.....but I only have 2 left. One is not worth the time to stop for, and the other has become a very loyal, and one of my favorite customers. Every account but these two turn out to be his family members who were using him, IMO, only b/c of their relation and second b/c he charged VERY low prices. One of them even said he never mowed there b4. He told me every account could have its prices raised w/ no problems and on and on..........I got the screws put to me royally and will probably NEVER purchase accounts again.
The main problem I realized was, we had 2 different business models. His was hideous work at cheap prices, and mine was charge fairly but give them better service than anybody else would. You see, a $50 dollar yard to you may be a $60 yard to me, b/c I may spend so much more time than the next guy (clean edges, etc..). So every one of us has a different work ethic and you have to find customers that want what YOU offer, and market yourself to them. It takes a while to do but once you find customers that want what you give, NOBODY:nono: will be able to knock on the door and take them from you! So if you are buying accounts, chances are you will never be what they are use to (which may not be a bad thing) and anyone who offers $5 cheaper than you will have your accounts.

[hvphotog]

But what did you pay for the accounts, was it a performance based price of a flat up front price you paid?



This is just my $.02 and I'm sure some will disagree. Last year I purchased some equipment off a guy w/ the understanding I would get his 12 accounts. I got a great deal on the equipment, thank God, so I didn't lose out.....but I only have 2 left. One is not worth the time to stop for, and the other has become a very loyal, and one of my favorite customers. Every account but these two turn out to be his family members who were using him, IMO, only b/c of their relation and second b/c he charged VERY low prices. One of them even said he never mowed there b4. He told me every account could have its prices raised w/ no problems and on and on..........I got the screws put to me royally and will probably NEVER purchase accounts again.
The main problem I realized was, we had 2 different business models. His was hideous work at cheap prices, and mine was charge fairly but give them better service than anybody else would. You see, a $50 dollar yard to you may be a $60 yard to me, b/c I may spend so much more time than the next guy (clean edges, etc..). So every one of us has a different work ethic and you have to find customers that want what YOU offer, and market yourself to them. It takes a while to do but once you find customers that want what you give, NOBODY:nono: will be able to knock on the door and take them from you! So if you are buying accounts, chances are you will never be what they are use to (which may not be a bad thing) and anyone who offers $5 cheaper than you will have your accounts.

[Creative1]

But what did you pay for the accounts, was it a performance based price of a flat up front price you paid?

It wasn't really either b/c I got such a good deal on the equipment. They were just an added perk. It would be more like flat up front price if I had to pick one, though. I see where you are going with this and would have to say you have the idea if you were going to purchase, to do it based on performance. I've just done enough business to see problems with that, too. How well do u know this guy? Does he know he can trust if you say you only did $1k worth of business, you didn't actually maintain, say $1500 worth of business and don't want to give him his full chunk of the pie? I'm not saying you ever would do that, but how does he know that. At least you're protected, though, that way. I'm just saying, protect yourself in ANY business transaction (even then, you will still be done wrong from time to time) and make sure you do everything as honestly and ethical as possible, then atleast you can sleep well!!:dancing:

[hvphotog]

Both people i would be doing this with are very close friends and i have no interest to decieve either of them and they know this. I was into commercial real estate for a long time and i know how pricing a deli goes and so on so i was using the same principals but based on performance being i dont know if the customers would stay with me or not. If they do we both make money, if not than we dont pretty simple and straight forward and no risk.

It wasn't really either b/c I got such a good deal on the equipment. They were just an added perk. It would be more like flat up front price if I had to pick one, though. I see where you are going with this and would have to say you have the idea if you were going to purchase, to do it based on performance. I've just done enough business to see problems with that, too. How well do u know this guy? Does he know he can trust if you say you only did $1k worth of business, you didn't actually maintain, say $1500 worth of business and don't want to give him his full chunk of the pie? I'm not saying you ever would do that, but how does he know that. At least you're protected, though, that way. I'm just saying, protect yourself in ANY business transaction (even then, you will still be done wrong from time to time) and make sure you do everything as honestly and ethical as possible, then atleast you can sleep well!!:dancing:

[Creative1]

and i have no interest to decieve either of them and they know this.

Please don't take what I was saying as that u would be deceitful. I think u have thought this through and have come up w/ a good way to do this for both of u. Like I said earlier, I got one of my best customers from a transaction like this and u will only be paying on people who turn out to make u money so I say go for it. Just be very clear on conditions beforehand. Let us know how it works out for u in the longrun.

[Creative1]

I wanted something that would safeguard me from paying out cash and getting nothing in return

SMART..SMART..SMART..Go for it!:clapping:

[hvphotog]

We will see what happens... If it works out no money will be exhanged until mowing starts in the spring time..