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View Full Version : What is a fair price to buy 40 accounts?


cmos123
10-12-2010, 11:04 PM
Hello, I have the opportunity to buy 40 residential accounts. He charges $25-$30 a yard. What would be a fair price? Thanks.

LibertyFarmLandscaping
10-12-2010, 11:47 PM
Hello, I have the opportunity to buy 40 residential accounts. He charges $25-$30 a yard. What would be a fair price? Thanks.

Weekly or bi weekly?

Extras? Hedge trimming, annuals?

Size of the yards?

cmos123
10-13-2010, 12:37 AM
They are weekly, and from the accounts that I have seen, he runs about 5-10$ less than I would charge. They are average sized yards, nothing special.

THEGOLDPRO
10-13-2010, 12:41 AM
im always hesitent about buying accounts, unless you talk to each and every customer and they give you the go ahead to continue the work on their yards its a tough thing, also make sure he signs a non compete aggrement

944own
10-13-2010, 12:41 AM
offer 2 weeks worth of cuts whatever that would pay

cpel2004
10-13-2010, 12:43 AM
It should range any where from one month gross or up to 6 months gross. Personally for me it depends on the route density, avg age of accounts and if they are priced correctly. In addition, check with all the customers and make sure there expectations are within reason of the per cut pricing. Make sure the guy isnt alresdy losing the accounts. Good Luck

LawnEnforcement25
10-13-2010, 01:50 AM
yeah i wouldnt take the reigns until i knew exactly how many would stay once they noticed you taking care of their yards. only then can you put a price on the amount of yards and accounts you are purchasing from him!

cmos123
10-13-2010, 02:18 AM
Thanks for the advice, I was thinking that I would pay a percentage of every lawn for a predetermined amount of time. That way if someone did not want me to continue then I do not loose any money, but I am not sure that he will agree with that.

LawnEnforcement25
10-13-2010, 02:42 AM
sounds like a good idea. it works out for both of you. its worth a shot anyways. seems fair to me.

cut level
10-14-2010, 03:20 PM
Man we have got folks on far opposite ends of the spectrum here!

Cajun Cleanin'
10-14-2010, 03:36 PM
Are you really buying anything here other than some good leads?Who knows which ones are gonna keep using you after he is gone?How do you know they are even profitable if you say he charges less than you.They may not take to the price increase and they all could bail out.

cmos123
10-14-2010, 03:44 PM
I would keep the prices he already has set up, and take the quantity over price. I believe he mows all his yards for $25 a week if you are weekly. These are .25 acre lots or smaller, so it is not too cheap if you have a bunch of them. I need to talk to him more on the subject, I will probably see him this Saturday.

DitchDr
10-14-2010, 05:17 PM
Ok take it from someone who has been around business (not just this one) for more then a week.

No matter what good, or services are being sold, they are only worth what someone is willing to pay. You may have a product that you paid 500 dollars for, it sat on the shelf for 5 years and was never used. Does this make it worth 500? No its not worth one cent more then someone is willing to pay. If your buying then I would first learn the art of bargaining, then ask him what he wants. Take his offer, and come back at 50% of his. This is a good way to start out. Also money talks, and BS runs the marathon. If you have cold cash in hand you will sweeten the deal more for you. CASH IS KING!!!

georgiagrass
10-14-2010, 07:14 PM
The last time I bought accounts that were not under contract, the negotiations went something like this: For price, I offered the gross value of 2 cuts. He wanted the value of 4 cuts. We settled on the value of 3 cuts. I insisted that some amount of the purchase price be placed in escrow and that I receive a pro-rata refund if the customer canceled within 30 days or failed to pay for those 30 days. I asked for half the purchase money in escrow. He agreed to the escrow account idea (we let his attorney escrow the money) but I agreed that only 25% of the purchase price would go into the escrow account. I was willing to agree to the 25% escrow number because all but a couple of the accounts had been with him for at least 2 seasons. As it turned out, none of the customers canceled or failed to pay so all of the escrow money was paid out to him in about 60 days. The deal also included a non-compete.

Mr. Mow it all
10-17-2010, 12:04 PM
IMO Accounts aren't worth anything.......they could be gone tomorrow! these days people are fickle, as soon as the guy with a mower in his trunk offers to cut (butcher) the grass for 10 bucks......there goes the account you just bought...

maintenanceman
10-17-2010, 08:57 PM
Just my opinion here, but I think you would get greater value from spending your money in advertising and getting your own customers on your own terms. And as they always say "No one sells a profitable business", so be careful. Good luck!

MR-G
10-17-2010, 10:05 PM
we used to sell accts on a regular basis...as you grow in the number of guys needed on a crew, you find that accts that were profitable with only 1-2 guys are no longer worth doing with 3-4 I know it sounds kind of wrong but believe me it happens...we used to sell these accts to guys just starting out or guys with smaller crews that could make money on them...we would always get 6 months worth service and would absolutly guarantee them for 6 months...if ANY cancel service early we would either refund some cash or replace the acct for them....we never had any real issues and to this day we get calls from guys asking to be contacted when we have any for sale...if they cant give you a deal similar to those terms dont waste your money....get them on your own....:usflag:

gasracer
10-19-2010, 09:26 AM
I got a call back in August from someone who was starting up a Lawn service and had found someone getting out of the business wanting to sale there accounts. From what this person told me there was around 40 accounts($100 each). They wanted about 23 of them because the rest was more travel time than they wanted to deal with. The person didn't want to split them up.They asked me if I wanted to take the others,I declined the offer.Being that it was already August I''m not sure they would make there money back just on the 23 they wanted by the end of the season. Turns out we didn't have any rain for almost 8 weeks after that.

Texas Lawn
10-19-2010, 11:29 AM
I would pay a months worth of cuts for every contract signed. 2 cuts for everyone that says they will switch but not sign a contract. Its the only way to do it without it back firing

Richard Martin
10-20-2010, 07:14 AM
When I sold my accounts in MD I got 3 weeks gross. Two different LCOs bought my accounts. I took each of them around and they picked which account they wanted. I then introduced them to the homeowner and got the "Okay" for the new LCO to take over. None of these were contract accounts.

The agreement was for 3 weeks gross if the account stayed with them for the entire season. They took over the accounts in mid April of '06 and the checks for the accounts were due in November of '06. I was available for any questions or complaints from the homeowners through the end of '06.

All in all it worked out very well except I did have to wait a little longer (until Feb '07) for one of the new LCOs to pay up. The first LCO was very prompt in sending me a check along with a detailed accounting of what he did with his accounts (money wise).

RamsayLawnCare
11-04-2010, 10:43 AM
The going rate for weekly accounts is 2.5x the price of one mowing service. i.e. if you are buying 40 - $30 accounts then it would be worth $3,000. Make sure that before you give him any money you have a signed contract or some type of written agreement with the new customers including the new rate that you want to charge. Before I did anything I would ask Joe Smoe the account seller to show me the properties and invoices for the accounts so that you know for certain what he is charging and what you are getting into. Be very careful when doing this. If you are in doubt get out before you lose your wallet!

I hope this helps.

JandDMaint.
02-08-2011, 02:37 PM
I'm looking at buy some mowing accounts where i'm located in Ny this guy wants $3500 for 16 accounts i think that is a little high when 10 of them our rentals under one guy and those ten only pay him 150$ a week. I think the best way to buy accounts is to have the seller sign a non comp. clause and pay for whatever customers agree to sign your contract for the year so if this guy only gets 10 people to agree on my prices i will buy him for 10

RECESSION PROOF MOWING
02-08-2011, 07:55 PM
If the guy wants something for 'em, tell him staight up that halfway into the year you'll give him 25% of gross up to that point. Take it or leave it. That way you have a history with the clients, they know you and your work, and you've made some money. Buying somebody else's relationship, and that is what accounts are, is risky business. People are fickle. They'll drop you because they don't like your cologne that day. If you make $4000 off those 40 by halftime, give the guy $1000. IF he laughs, walk away and forgetaboutit.

MR-G
02-09-2011, 10:08 AM
buying accts. can be a great way to expand rapidly...be careful and know what your getting....as far as worth, the norm in my area is 3-6 months worth of billing....6 months usually comes with some equipment...the customers need to be informed of the change and should sign an agreement of pricing and items covered in the maintenance...pay for only the ones who agree to the terms.....