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View Full Version : buy lawn service vs. spending that money on adds


sirsweatsalot
10-21-2002, 11:56 PM
i was pondering which i should do: buy an existing lawn service for its customers or go on a rampage of direct mailers, adds, flyers, ect. which do you think would return better.
the lawn service has 35 clients which gross $20,000 yearly.

JimLewis
10-22-2002, 12:55 AM
Well, if you can get them for a good rate, I'd buy up the existing customers. It takes a while to get 35 customrs. And if they are fairly established, it may well be worth it. Plus, once you have these customers you will now have a decent operating capital and can probably afford to still do some more advertising.

This is all assuming you get a good rate for the customers you're buying. (that sounds bad :) )

Personally, I'd pay what's equal to 1 month's service for each customer. And I'd pay 1/2 in advance and the other half in 6 months when I see how many of them stuck with me. For every one who drops out in that 6 months (unless it was my fault) I would not have to pay at all for them.

If the price of the customers were more than that, I'd rather just go out and get my own via advertising. Hopefully that makes sense.

JimLewis
10-22-2002, 12:59 AM
Wait a minute! $20,000/yr. for 35 customers??? That's $571 per year per customer. That's pretty lame! I wouldn't pay much at all for those customers. What's he got them on; $29 per mow, every other week, for 40 weeks (20 paying weeks) ????

sirsweatsalot
10-22-2002, 01:05 AM
right around 20 paying weeks a few more maybe.

JimLewis
10-22-2002, 03:23 AM
So is that the industry around where you live??? People only mow their lawn about 4-5 months out of the year? Man, if that's the case, I'd find another business.

Anyone else from this area who can lend a hand here? Is this normal?

Lawn Cops
10-22-2002, 03:18 PM
I agree with Jim.

I'm just in my second year, part time, I have only 18 current weekly accounts and will gross above that......I would not touch them.....

I would spend 500 on flyers and saturate the area you want to be in. I had pretty good luck with flyers . I only passed out 75 one day and got 5 customers off of them.

Jim
Lawn Cops

MJStrain
10-22-2002, 03:50 PM
Personally I wouldn't touch them either. I'd pass out the flyers. I've always have great success with them.

musselman
10-22-2002, 04:30 PM
I would look at the accounts if they are all very close together and small...15-20 minute type accounts it may be a good start. If you want to earn $40 an hour and these accounts will allow that and the price for them is low I would get them. If you think your only going to make $10 an hour then dont do it.......it all depends on what you want and need to run your LCO. I do one account for some elderly people for only $12 a cut... It take 5-10 minutes total including time to load and unload (Im already next door) these types of account can make money in the right situation.

LLMSERVICE
10-22-2002, 06:05 PM
In the past, I bought out two companies for their clients only because their assets were worthless. I trippled my client base but I'm not sure it was really worth it.

This year I paid $600 ($400 US) in advertising and got 25 new clients, turned away some and put others on a waiting list for next year. I set out targets to grow my business in a managed method to minimize my stress.

If you have good equipment already, than I'd recommend advertising as a better investment.

One thing I do is track where customers come from, helping me identify where my marketing budget should be focused.

LB Landscaping
10-22-2002, 06:11 PM
I thought about buying a company when I got going. I opted out for several reasons. Reason # 1 was that I wanted to get the equipment that I wanted. I didnt want to buy someone elses set up with its problems. I wanted certain equipment for my business, stuff I new would make me money and no matter who had a bus for sale it never seemed that they had the stuff I new I would prosper with. Take a look at his equipment, is it stuff you'd buy??

mowngrow
10-22-2002, 07:19 PM
to me it does NOT sound like a good investment to purchase the company. i would advertise with the money as long as you can handle the new clients

Mow&Snow
10-22-2002, 08:29 PM
It's really not possible to give good advise on this subject. There are so many variables that none of us know.

I bought a snow plowing list when I first strated plowing for myself. list had 65 names on it, all fairly close together. I paid 1200.00 (via sealed bid). I ended up with about 45 after the second year. I lose a few customers every year, from the list and other, but I now have about 20 from the list after 9 years.


I think my investment was well worth it. You need to descide if yours will be.

How much are you looking to spend on this anyway?

sirsweatsalot
10-22-2002, 08:39 PM
good advice! thank you

hustlers
10-22-2002, 09:32 PM
Sir,
what part of MN are your from,

Do you know alot about lawn care or just mowing??
Are the accounts under any contract????
What kind of hrs. did this take a week.

sirsweatsalot
10-22-2002, 11:47 PM
western MN. he didn't say anything about contracts but as it looks i don't think any of them are. no one likes lawn contracts around here the only contract they will go for is like a 12 month contract. the guy said it takes him around 4 days a week to complete them, but there im not sure it would take me that long hes running all john deere equipment and he's a differnt kind of guy im not really sure how effeicent he is.

joshua
10-23-2002, 01:10 AM
if it were me and i had the chance, i would, if you already have a business going. my situation, 45 customers, and 90% chance going to buy out a business this winter. The other business has 65 customers, both at 30 cuts per. season. i would say 90% or more of his lawns are within routes i already have. plus i will buy equipment, 52lazer hp, new engine with ultra vac, w/b- piece of junk(sell it), tralier, truck with e-z dump, and trimmers and blowers. he does almost no add-ons, edging, shrub maintance, ect....

just a side note, if you do plan on buying a busness have a account look over the books, have everything apraised, have the person selling sign a contract stating if he comes back in business he can't get his lawns back for a certain period of time, and get the new customers under some kind of contract for the 1st season.

bruces
10-23-2002, 08:51 AM
We haven't seen a price have we?

That would have a large bearing on my opinion.

lawnworker
10-24-2002, 05:30 PM
Dont pay anything for those lawns, The gross is way out of line . I would run from those yards as fast as i could.

goose
10-26-2002, 05:08 PM
Its hard to ask the whole country a question on what a good price is because my bottom 35 residential customers pay about $100,000 a year and thats with a 36 visit schedule.This is based on about $50 per man hour.
If you decide you have to have the business and it matches what you charge then , "jimlewis" has a good idea on how to pay for the business. Look at the bottom line , are you going to make you profit that you need to make. The lawnmaker might have the best idea though.

Mow&Snow
10-26-2002, 11:27 PM
Your worst 35 lawns pay 80 dollars each every time you go there?


Sounds alittle high to me.....

How many of these can u service in a day?

goose
10-26-2002, 11:52 PM
Mowandsnow all of our properties pay year round so its hard to say exactly what they pay per visit , but they do pay around $240 a month . But included in that is also shrubs , fert , natural areas etc. but I would say a good avg is about $60 a visit . All of these properties are in one neighborhood and a 4 man crew can usually do about 20 in a 10 hour day.

bdemir
10-27-2002, 01:39 AM
My advice is start slow and do something else on the side while you grow that way you can see ifyou like doing this and continue on .



Bedros