View Full Version : Value of Business ??

10-14-2002, 07:15 PM
I have read allot of search topics on the value of a Maintenance Business but I have not found any threads on the value of fertilization / application accounts. How do you appraise the value of a fertilization customer base ? This is a 90 account business with 5 applications annually and options for seeding / aeration and disease/weed control optional applications. (No Equipment). Thanks.

10-14-2002, 07:43 PM
how much does it cost you to get a new customer? thats how i would do it

10-14-2002, 07:58 PM
A low ballpark figure might be the cost of 1 app on them all.

An average might be 2 apps.

Does that help?

10-16-2002, 02:07 AM
You could use the same formula as is used in buying lawn accounts ... 10-20% of the gross annual sales, but I honestly don't think accounts, in general, are worth as much as many ask for them ... if they don't like him, they will go to you, if they don't like you they will go to the next guy ... there si nothing to say that if you purchase these accounts that they will stay with you for more than a season (if you have a CONTRACT).

10-16-2002, 01:45 PM
The only way to increase the value of an acsount list is to properly transition with the former owner on a 1,2,or 3 year employment contract. Buy back clauses are appropriate sweeteners too.

A few years back a "very big lawn care company" offered $.70 on the dollar for one of my customers business'. After the buy back clasue though, he ended up owing them money. They promptly lost 40% of the clients the first year alone. The buy back kicked in at 20%.

For the record, they showed up with 7 lawyers & had my guys lawyer going ballistic. He got so confused, he missed the details of the buy back clause.

They've also been known to offer stock instead of cash, but I'm not going there.