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View Full Version : Buying cusotmers- please help!


sixpixels
09-19-2010, 11:12 AM
Hey Guys,
So i came accross an oppurtunity to buy equipment and customers from a guy who's lokoing to get out of the buisness. I already have a landscaping co and figure this would be a great add on of customers. I need some feedback/aadvice on the value or what i should pay for the customers.
here are the details-
-40 grass cutting accounts- weekly and bi weekly. All properties are within a 10 mile radius
-The guy im buying them from has only been in business for 2 yrs..so his oldest customer is 2 yrs if that.
-The guy is lokoing to get 8-9K for the customers only which to me is ridiculous being his agreement/contracts with these customers are as of right now for this season only...and nothing stating any type of penalty if they decide to cancel. PLUS how do you put a high price on somethign you dont physically own?

Ive sene past post about paying him 3-4 weeks services per lawn, or 32 weeks of service or 5-10% of the annual income BUT again...there not even signed on for next season.
Im open to any and all advice...

Columbia Care
09-19-2010, 10:40 PM
I would tell the guy you would be willing to pay him for 2 months revenue from his customers. The clock would not start until next years cutting season. This way you can see if the customer will allow you to service their property. If they don't, you would not pay the guy for the lead.

seabee24
09-19-2010, 11:01 PM
Depends on a lot more, what's the estimated profitability? How big are these accounts, what's the revenue?

Odds are he's not going to drop his price much unless he gets desperate, and let's face it, for you to pick up 40 new accounts could take more than a full year. So if these accou ts brought in 60,000 for the year, then paying 10-20,000 wouldn't be out of the question. But no sale is going to be 100% perfect or 100% gaurrentee. That's just the risk you take. I would be more likely to pay more but have him offer a gaurrentee and possibly his help for next spring for signing them and managing them for a month
Posted via Mobile Device

sixpixels
09-20-2010, 03:25 PM
Thx for the help.
This guy selling the properties has 39 total and they bring in about 3k per month.Most of them are bi weekly. The guy wants like 9k for them and i told him he was crazy. I offered him $3500 max...

waiting on his reply

Marcos
09-20-2010, 03:39 PM
Hey Guys,
Im open to any and all advice...

Learn how to spell, or use the yellow 'spell check' button below.
Doing anything otherwise makes you look quite unprofessional, especially while seeking advice.

jdutcher003
09-20-2010, 03:41 PM
i purchased some lawns from a guy who was going out of business not to long ago. the amount i paid was equal to about 4 weeks of mowings for those customers.

sixpixels
09-20-2010, 03:51 PM
Learn how to spell, or use the yellow 'spell check' button below.
Doing anything otherwise makes you look quite unprofessional, especially while seeking advice.

Marcos,
I came hear for advice on buying accounts, not a spelling and grammer course.
Im typing fast because I am at my full time job and shouldnt be on the internet during company time so excuse my typos

sixpixels
09-20-2010, 03:54 PM
Learn how to spell, or use the yellow 'spell check' button below.
Doing anything otherwise makes you look quite unprofessional, especially while seeking advice.

Marcos,
I came here for advice on buying accounts, not a spelling and grammer course.
I'm typing fast because I am at my full time job and shouldn't be on the internet during company time so excuse my typos

seabee24
09-20-2010, 03:59 PM
39 accounts at 3 k per month = 76 dollars per customer average.

so if its almost a 50/50 mix thats 19 full time, 20 bi weekly = about 116 total cuts for the month (thats assumign a 50% mix) that means that hes charging an average of 26 bucks per account.

Now if 75% are bi weekly 29 bi and 10 weekly = 98 cuts - average price per cut is 30 bucks

so from there you have to figure out your cost to service these properties. to see if that 30 bucks will make you money, and exactly how much profit is in it for you

AA+ landscaping
09-20-2010, 06:08 PM
Thx for the help.
This guy selling the properties has 39 total and they bring in about 3k per month.Most of them are bi weekly. The guy wants like 9k for them and i told him he was crazy. I offered him $3500 max...

waiting on his reply

If you are interest I got 35 new accounts in the spring for half of that. It was very easy just took a little bit time. You are not in my town so it will not effect me. I would like to see if it would work in a different area.

seabee24
09-20-2010, 06:20 PM
[QUOTE=AA+ landscaping;3727181]If you are interest I got 35 new accounts in the spring for half of that. It was very easy just took a little bit time. You are not in my town so it will not effect me. I would like to see if it would work in a different area.[/QUOTE

how so?

AA+ landscaping
09-20-2010, 07:19 PM
[QUOTE=AA+ landscaping;3727181]If you are interest I got 35 new accounts in the spring for half of that. It was very easy just took a little bit time. You are not in my town so it will not effect me. I would like to see if it would work in a different area.[/QUOTE

how so?

Its all about marketing. Gave me a call I will tell you how to get started. 6105096966

lawn
09-20-2010, 11:34 PM
[QUOTE=seabee24;3727193]

Its all about marketing. Gave me a call I will tell you how to get started. 6105096966

AA+landscaping: I am selling my business too, can you email me pls?

Thanks

LawnGuy73
09-23-2010, 09:31 AM
Are these all under contract, and if so. For how long?

If they are under contract. The most I have paid for an account was one months worth of service. So if its a $50 per cut I pay $200.

If not, walk away....

MarcSmith
09-23-2010, 10:14 AM
don't pay for a customer list....as epic mentioned. a contract for lawn service is what you need to buy...

seabee24
09-23-2010, 10:50 AM
don't pay for a customer list....as epic mentioned. a contract for lawn service is what you need to buy...

question - whats the difference?

A. the customer signs the contract with the old guy, so hence contract does not apply to new guy

B. are you really going to drag someone to court over a lost lawn contract? customer decides not drop you, so instead of shaking their hand and admitting that you were just not the right fit, you tell them , tuff your in a contract so sue me? i doubt that, if you do that word will get around, plus even if it went to court all the cusotmer has to do is claim shes not happy with your work.

The list alone isnt worth alot, but if the old owner is willing to hold hands for a while and the entire process is done smoothly with little tranistion for the cusomters there should be little to no loss. and thats where the money is

wbw
09-23-2010, 11:15 AM
question - whats the difference?

A. the customer signs the contract with the old guy, so hence contract does not apply to new guy

B. are you really going to drag someone to court over a lost lawn contract? customer decides not drop you, so instead of shaking their hand and admitting that you were just not the right fit, you tell them , tuff your in a contract so sue me? i doubt that, if you do that word will get around, plus even if it went to court all the cusotmer has to do is claim shes not happy with your work.

The list alone isnt worth alot, but if the old owner is willing to hold hands for a while and the entire process is done smoothly with little tranistion for the cusomters there should be little to no loss. and thats where the money is

Bingo! We have a winner. Residential contracts are worthless.

MarcSmith
09-23-2010, 11:53 AM
resi contract are not worthless. Took my fair share to court and won and collected when they defaulted.

I can sell you a customer list for 5 bucks... A contract at least states that someone is locked into a contract for hire. and depending on how the sale of the business is handled, does not mean that a contract becomes null/void on the change in ownership of a company.

Six keep in mind and ask yourself the question.....WHY is he selling? Why is he honeslty getting out he business....I'd put money on the fact that he's not making any...so he's trying to cut his losses and run...

seabee24
09-23-2010, 01:27 PM
resi contract are not worthless. Took my fair share to court and won and collected when they defaulted.

I can sell you a customer list for 5 bucks... A contract at least states that someone is locked into a contract for hire. and depending on how the sale of the business is handled, does not mean that a contract becomes null/void on the change in ownership of a company.

Six keep in mind and ask yourself the question.....WHY is he selling? Why is he honeslty getting out he business....I'd put money on the fact that he's not making any...so he's trying to cut his losses and run...

yes and as i had pointed out in another post, there will be loss even if he doesnt sell, just becasue those people that are "sticking it out for the remainder of the season"

as for court - glad you won, but that word spreads around, they wanted to cancel for one reason or another. not sure why. but do you really think that your time in court is worth more than if you were just out making money cutting grass?? yeah you can win alot in court, and you can also drive back and forth 4 seperate times, with dismisals, continueances, thers no gaurantee and even if you do win, collecting is still a whole different issue.

If you repeat this process enough time, word will get around, and soon you will be known as the contractor that just likes to sue people.

Granted there are times for it....if they were on a seasonal contract and canceled halfway into it, and you just did a spring cleanup, and spring bush trimming....odds are you have done more work than what they have paid...that situation deserves a second look, and your contract should have something in there about canceling...

bignamelawncare
09-23-2010, 01:51 PM
I couldn't see myself buying a customer. I'd rather spend the money on building my brand or equipment.

MarcSmith
09-23-2010, 02:06 PM
.odds are you have done more work than what they have paid...that situation deserves a second look, and your contract should have something in there about canceling...

this an non payment. were the main reasons.. how many rainy days do we piss and moan about. that we can't do anything, got a drought and cant cut grass. there was plenty of time to deal with court. was I sue happy. no, it was a huge PITA, but i figured if I let them take advantage of me, then they'd do it to you or someone else...A property lien was good for 21 years in florida...@ 18%. thats a good return...Usually after all was said an done, with legal, fees, collection fees, ect. are good for another 4-500 on top of the original bill...I had a good cancellation clause that allowed both parties an out. It was a fair contract. it spelled what was to be done and what charges and when money was due...only one page long with about a dozen bullet points. I'm sure a good lawyer could have taken me to task in court, but the nice thing about smalls claims....no lawyers..

seabee24
09-23-2010, 03:05 PM
well non payment of anykind contract or not deserves its day in court. -agreed

What i wa refuring to in this case and doing a customer buy out, even if the customer is under contract for the full season (and they are paid in full to date) ...if they want to leave and no longer use the new guys services...do you really think that situation is worth going to court? becasue thats really what this is about, do you buy a customer list with out them being under contract? my vote is in reality the contract isnt worth anything for keeping the customer a customer

seabee24
09-23-2010, 03:14 PM
I couldn't see myself buying a customer. I'd rather spend the money on building my brand or equipment.

possibly, of course any type of advertising or marketing or building a brand, is the same thing...dollars spent for new business

buying a customer might cost more but the odds of sucess go up. 400 door hangers, your lucky to get 1 customer. and you have no past info on them.
so you spend the money for the door hangers and labor to pass them out

but the list...do nothing but type some letters, make some calls. get past history to make sure they pay up on time, and that they were a profitable customer. so you pay more, but you get more

like i keep saying, if you want to sell/buy a "list" its a gamble and its worth a small amount

If you want to buy or sell a list that has data to go with it, support by the old owner, profits, proof that he hasnt let the customers go to heck.....buying a true, well run COMPANY, then thats worth 10X more.

why is it that a retail business can sell for an average of up to 2YEARS of income? they dont have signed contracts with customers. all they have is their brand and reputation...... and your all thinking is that lawn customers are worth 100 bucks?

if your in my area, and want to sell out... he is my offer. i will pay $750 per account provided that it meets all my specs. might not make alot the first year, but the second, 3rd 4th.... yep. then they tell their friends so the cost for that one lead at $750 just got cut to $350. so if you live in the mchenry county area, and want to sell out please send me a message, and i will come with cash

MarcSmith
09-23-2010, 03:21 PM
What i wa refuring to in this case and doing a customer buy out, even if the customer is under contract for the full season (and they are paid in full to date) ...if they want to leave and no longer use the new guys services...do you really think that situation is worth going to court? becasue thats really what this is about, do you buy a customer list with out them being under contract? my vote is in reality the contract isnt worth anything for keeping the customer a customer
Id love to keep em, but I would not sue for th remainder of the contract. as you stated that stupid...why would I want a customer that does not want me...The contract is worth whats it written on. but Id rather have 100 contracts over 100 people's name on a list...any day of the week...