View Full Version : Buying Accounts
Kent Lawn Care
07-16-2002, 01:42 PM
I had another company offer to sell my all of their accounts. has anyone had experience with this, like is it a good idea, how much is to much to pay for them, etc.
07-16-2002, 02:02 PM
it could be good or bad idea.
I think most members will need more info before they can give you reasonable answers to your questions.
07-16-2002, 03:06 PM
I have also wondered about buying them just single, not a bunch at a time.
07-16-2002, 03:21 PM
Buying accounts is certainly a good idea if;
1) You are looking to expand
2) The accounts are within your current routes
3) The accounts are profitable
If the above apply then yes, you'd want to buy the accounts. Now the issues are under what circumstances, for what price, etc.
Personally, I wouldn't pay more than the equivelant of 1 month's service. And I wouldn't pay it all until the end of first or second month.
Other terms would have to be worked out with you and the seller. But I'd definitely be sure that the seller agrees to get in touch with the customers and explain that you will be taking over his accounts for him and that you will maintain the accounts just as good as he has in the past for the same amount. People need to feel comfortable with the new business otherwise they will jump ship.
Personally, I'd LOVE to buy some accounts. Wish I had that opportunity.
Kent Lawn Care
07-16-2002, 03:21 PM
lets see, umm more info. well, the gentlman informed me that it is 14 accounts and that it brings in $16,000 a year. (i know its not a ton of accounts but it will increase my accounts by about 20%) around here we average 29-30 cuts a year. as i think of more info that would help i'll let ya know.
Thanks Jim, that helped me out lots. my biggest fear at this point is just as you explained, that the customer would jump ship when they find out they are getting a new service. ive heard of other companies selling their accounts to another company, then the customers turn around and go right back to the original company because they didnt want the change.
the gentleman that is offering me these accounts i know will not take them back because of a job change and health reasons. once again though thanks for the input!!!!!!
07-16-2002, 06:16 PM
"Non Compete clause" Make him sign one.
The rest Jim hit on the nail.
I wouldn't pay more than 3 cuttings and any of the rest of the work that comes with it is a bonus for buying the accounts.
07-16-2002, 07:15 PM
I know here it is illlegal to work in an area for 5yrs if you sold a bussiness, so im sure its no diffrent anywhere eles so they wont go back to him anyways. Maybe you should work wityh him on the days he services those accounts so they see your work and they can meet you, Just an idea.
07-16-2002, 09:02 PM
we had a horrible experience with buying another lco last year. The owner understated the amount of revenue that would be brought in by a considerable amount (in the several thousands a month). By the way, we bought about a 100 accounts in addition to the 115 we had already. Also, the lawns had not been cut in 3 to 4 weeks because of his labor problems. This resulted losing a quarter of the accounts because they pissed at the prior ownership. You might want to scout location because the amount of travel may not be profitable, this was definitely the case with the accounts that we purchased. This situation may be the exception to the rule but i would defintely do your homework. Just remember that he's selling the business for some reason. Good luck.
07-16-2002, 09:57 PM
I know here it is illlegal to work in an area for 5yrs if you sold a bussiness, so im sure its no diffrent anywhere eles so they wont go back to him anyways.
I doubt that is true at all. And it definitely isn't true "anywhere else". In my state, I know for a fact you gotta get a non-compete contract. Otherwise, the person who sold the business to you can start up shop the next day.
07-16-2002, 10:06 PM
How and When do you go about trying to setup a commercial account for next year? I mean, not buying one, but just what's the best way to get the company's attention that you'd like to take care of their lawn next year? When should I contact them and what do I say?
07-16-2002, 10:11 PM
Maybe I can help. I bought 25 accounts 3 months ago. I was weary about customers jumping ship so I went to each individual house and talked to them. I was dressed in slacks and nice shirt. I introduced myself and let them know I would take over. 23 stayed with me. Many people down here figure each one you buy by multiplying its weekly value times 3. Add up all accounts and this is what they go on around here. Worked for me for I have already paid for my investment plus some.
You better go check these accounts out for yourself and make sure they did not underbid them. Especially if you are doing them for the same price. He could be doing them to cheap. If your operating cost are not exactly the same, your profits won't be either. There is also the equipment factor. What type of equipment is he running versus yours. If he had 60" zero turns and you have a 36" Murray (just as an example) the labor will be dramatically different. There are so many variables to figure in better look at every angle.
07-16-2002, 10:50 PM
first things first, are these props under contract? if not, whats keeping you, me, or joe blow, from going in there and telling the prop owner that the current LCO is going out of business and it will be take over by(__________<<<-----insert name here)?
07-16-2002, 11:17 PM
I think I have to agree with Lawnsmith from Louisville. If your other Lco doesn't find a buyer, some one is going to score those props anyway. Maybe it's time for an intensive flyer campaign in those areas.
07-17-2002, 01:11 AM
[QUOTE]Originally posted by dogger
[B]we had a horrible experience with buying another lco last year. The owner understated the amount of revenue that would be brought in by a considerable amount (in the several thousands a month).
Hey Dogger, I don't mean to "dog" ya, but I want to see if I'm reading it right. You mean you purchased these accounts on his word, rather then looking at his books?
>Also, the lawns had not been cut in 3 to 4 weeks because of his labor problems. This resulted losing a quarter of the accounts because they pissed at the prior ownership.>
So you didn't see these accounts BEFORE buying them?
> You might want to scout location because the amount of travel may not be profitable, this was definitely the case with the accounts that we purchased.>
Again, you didn't even see where they were before you bought them?
Maybe there's a piece to this puzzle that would clear it all up, but for now, I'm not sure I understand how this could happen.
Don't think I'm knocking ya, I'm not. Just don't understand how all that could have come about.
I'd buy accounts IF the RIGHT opportunity came along.
vBulletin® v3.8.6, Copyright ©2000-2015, Jelsoft Enterprises Ltd.