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rmpettit
01-01-2005, 10:18 PM
I am considering purchasing a lawn care company that is for sale. It brings in $2500 a month. Is there a typical sale price for lawn contracts? Any information would be greatly appreciated.

shaughnessylawn
01-01-2005, 10:24 PM
well there is a couple of things to consider, what is the over head of that company a month,minus that from the 2500 are they signed cntracts 4 2005,what kind of equipment come with it and how are they asking for the company hope I could help

rmpettit
01-01-2005, 10:32 PM
well I havn't talked to the guy yet. I found out through a friend. The guy has some equipment but I don't know what...he has several contracts but I don't know if they are signed contracts. I want to get my ducks in a row before I talk with him so that I know if its a good deal or not.

In the past I've heard that the going in rate for contracts is 4 times a cut or 20% or a seasons revenue.

i_plant_art
01-01-2005, 10:48 PM
i wouldnt pay for not more than 10 % of the value of the contract for it .. equipment is a different story thats all different

jeffex
01-02-2005, 09:06 AM
Unless this is someone you know well I would procede like this; First download a non-compete form and a non-disclosure form from smart agreements .com. Call the seller and inform him you have a non-disclosure form which states you agree that if he takes you around to his customers you won't try and approach them on your own[ you won't steal his customers]. Ask him to show you verification of the income stated by looking at his books or just adding up what each customer pays. Average # of cuts in your area x price he says they pay[ talk to them and ask what they pay if you can]for example, 25 customers averaging $700 per season = $17,500 What you would pay for that POTENTIAL gross income is your decision. How desperate is the seller? My guess would be between $5,000 and $7,000 . If the seller wants all the money up front you have no guarantee the customers will stay with you. You need to get a lawyer to put the money in escrow to let the seller draw from at agreed times once you actualy take over the customers. If you loose some of the original customers after the first month then you can deduct that from the final draw on the escrow. After that your on you own. If I were selling my business and had to agree to this process I would probably want $7,000 to $8,000 for the hassle not to mention the lawyers fee. The non-compete form is for the seller to agree not to start up again in the area you just bought from him. Evaluate the equipment seperatly based on what it is worth used. You can buy your own new stuff!

packerbacker
01-02-2005, 10:31 AM
Ill say the same thing i always do about buying customers. Why would you pay for something you can get for free?

Buy the equipment but DONT pay for customers

hoyboy
01-02-2005, 11:07 AM
Packerbacker -

I take exception to what you have just said, as should most of the owners on this forum. I hope you are just talking and don't really mean that...

Some of us have spent considerable time and effer, even our lives putting together the hard earned equity we have in our businesses. To say that you can get customers for "free" is a gross misstatement. All the calls, the estimates, the weeding out of bad customers... What I (and others) have is a profitable list of exceptional customers. We have already sorted through the riff-raff and accumulated a list of customers who pay well, demand much, and are very comfortable with having us on their property.

That "sorting out" does not come free. If it does, than your (not mine) customers are worth exactly what you paid for them...nothing. But for the majority of us, they did not come free...and we will not sell them for free. Please use your words more wisely.

Dan

packerbacker
01-02-2005, 11:21 AM
Packerbacker -

I take exception to what you have just said, as should most of the owners on this forum. I hope you are just talking and don't really mean that...

Some of us have spent considerable time and effer, even our lives putting together the hard earned equity we have in our businesses. To say that you can get customers for "free" is a gross misstatement. All the calls, the estimates, the weeding out of bad customers... What I (and others) have is a profitable list of exceptional customers. We have already sorted through the riff-raff and accumulated a list of customers who pay well, demand much, and are very comfortable with having us on their property.

That "sorting out" does not come free. If it does, than your (not mine) customers are worth exactly what you paid for them...nothing. But for the majority of us, they did not come free...and we will not sell them for free. Please use your words more wisely.

Dan








So you telling me that you would rather pay a company to get its customers then taking some time handing out flyers or advertising? Makes sense to me!!!!!!!!!!!!!!!

Hell ill just go out and spend $10,000 on customers when i can spend 1/20 of that on advertising and get the same results!

The lack of thought by some people here is completely amazing!

rodfather
01-02-2005, 11:32 AM
But for the majority of us, they did not come free...and we will not sell them for free.

Dan

I would like to know how they come free as well? Besides referrals that is...

packerbacker
01-02-2005, 11:39 AM
I would like to know how they come free as well? Besides referrals that is...




We all know that they are not 100% free. Of course we pay for advertising.

When i got into business i bought someones used equipment. He offered to sell me a list of customers for what amounted to about 2 months of profit. It was about 30 houses. I said no thanks and did some advertising and with some word of mouth a couple months later i had 30 houses. In all i spent about 300 bucks on advertising.

Now correct me if im wrong but $300.00 is less then $8000.00.

Im sorry for not being more clear. Ill spell it out next time word for word.

But ill stick to what i say. To pay someone a substanial fee for something you can get by sending out flyers and opening a phone book is S T U P I D

rodfather
01-02-2005, 11:57 AM
Im sorry for not being more clear. Ill spell it out next time word for word.

Not necessary John. But I do understand hoyboy's sentiments as well being a business owner. That's all...

walker-talker
01-02-2005, 12:26 PM
It's going to depend greatly on an individual's market as well. A more competitive market means you going to have to be more creative or might have to spend more money gaining a client base.

STAN1366
01-02-2005, 12:34 PM
Paying for accounts can be a good thing or a bad thing. $300 for advertising VS $8,000 to buy them outright is more than just a $7,700 difference. How far apart were these 30 accounts that were for sale? How far apart were the ones gained thru advertising? Travel time has got to be a factor as well as loading and unloading. While I've only got 10 accounts and do this part time, I only have to stop at 3 places. Buying someone elses accounts doesn't guarantee no PITA's either. A "good" customer might be used to how the previous LCO worked with them :waving: . You might have a slightly different style
(day you come, time of day, etc) which might rub them the wrong way :angry: .

Drew Gemma
01-02-2005, 01:50 PM
I have bought accounts before. I just purchased 35 accounts that bring in 5,100 a month at least probably more. I went to the lawyer each time had a purchase agreement with a no compete drawn up. It states I pay him 50% of the monthly gross for 3 months. So that way I only pay for the clients that I retain. So he gets 3 payments of half the montly gross. Then he's done. But first check the books find out about each client the ins and out how they pay what type of property time versus amount charged miles of route total drive and mow time. I go through and get rid of all the acounts that pay per cut cause that eats up time. Get rid of all the late payers I already have enough of those types. Now if your gonna by equipment put that in the contract that will act as a proof of ownership since equipment doesn't have a title. So first go through the books and examine each account then go to a lawyer. Then have him send a letter stating that you will be helping him out by doing his accounts then send a letter saying who you are and how great you are. Then get out their and make it work or you just blew your wad on nothing. Just never tell the clients you bought them always make it sound like your doing them a favor and your helping them out. I have bought 25 before and i have 23 of them still. I got the mowing originally now I mulch weed and plant plus leaves for these ppl so it has really paid off. Good luck

biglawndog
01-02-2005, 01:53 PM
Packerbacker -

I take exception to what you have just said, as should most of the owners on this forum. I hope you are just talking and don't really mean that...

Some of us have spent considerable time and effer, even our lives putting together the hard earned equity we have in our businesses. To say that you can get customers for "free" is a gross misstatement. All the calls, the estimates, the weeding out of bad customers... What I (and others) have is a profitable list of exceptional customers. We have already sorted through the riff-raff and accumulated a list of customers who pay well, demand much, and are very comfortable with having us on their property.

That "sorting out" does not come free. If it does, than your (not mine) customers are worth exactly what you paid for them...nothing. But for the majority of us, they did not come free...and we will not sell them for free. Please use your words more wisely.

Dan


Well said hoyboy. As for packer backer, your lack of thinking it through amazes me. If you would have thought it through you would have realized that there are situations where a person can't wait for income. They have families and bills to pay.Also, not everyone is a good salesman and may not be able to sell themselves/services as well as others can. Please think things through more thoroughly and don't throw a blanket statement on things.

Youth, it's wasted on the young.

rodfather
01-02-2005, 01:59 PM
I have bought 25 before and i have 23 of them still. I got the mowing originally now I mulch weed and plant plus leaves for these ppl so it has really paid off. Good luck

Good % for retaining them...congrats.

Also, good point of the add-ons that you can sell to purchased accounts. Maybe the last LCO never did fert, aerating, mulch, cleanups, snow plowing, etc., which really now helps to offest the purchase price. I'll be the first to admit I may go low on mowing a lawn cause I will more than make it up by offering/supplying the premium services as I stated.

jeffex
01-02-2005, 01:59 PM
I didn't pay for lawn accounts to start my business. However, the question was on appraisal of value, not if it is a good idea. It is a fast way to get started. I have heard of people who paid for customers and they were up and running right away. I know of others who paid for customers by buying out their competition. If you think your business has no value oh well!! If your that good at knocking on doors and getting customers it probably isn't an option for you but this guy just wanted to know about what to pay if that was HIS decision. Bash away

Creative Lawn Care
01-02-2005, 02:05 PM
Packerbacker,
So you are telling me that at some point when you retire or decide to move on to some other business you will just quit and not try to sell your business?? If this is true then you have no business at all just some people you mow for? So the only value of your "company" is the mowers?

Fantasy Lawns
01-02-2005, 02:09 PM
That's what I'm talking about .... when I sell ... it's turn key ....been built up for when I sell .....n it ain't gonna be no 10% of even gross

JustMowIt
01-02-2005, 02:43 PM
Not calling anyone stupid one unwise...Just our experiences. We started out by thinking that buying accounts was a good idea, but learned that the business in our area is a revolving door & we must treat it as such. For example, we bought 125 customers in June 99 for $350 each & have 20 of them left today not from quality, but moving, divorce's, etc. Was not a good decision, but chalked it up to experience. We stated paying less but got real tired of trying to blend all kinds of billing terms, prices, & promises that did not fit our pipeline.

We average spending $100 to advertise (hiring everything done) to get a customer which is very profitable to us, knowing that we will have to replace that customer in 3 months or 3 years.

So, when someone calls us now to sell us customers, we offer $100 per customer, so long as the owner will have the customer call us & sign up with our price & billing terms.

As for the original question of worth, we have never heard of a standard to go by, so you have to take all the answers of this thread & decide how, & how much it is worth to you!

MJ

CuttingCrew
01-02-2005, 03:31 PM
I had a fellow who was going out of business approach me early last year wanting to sell me his last four accounts for $600. It was early enough in the season to make money off them (mid May, averaged $35 per lawn, solid customers) but I was not in a position to take on more work due to recent surgery so I turned him down. In August he called me again and flat out gave me the accounts cause he didnít want to leave these customers hanging in the wind after he had sold his last piece of equipment. Good news for me.
Anyway, the method for reaching the $600 figure was this,
$35 per account X 4 accounts X 4.3 weeks per month = one month gross revenue $602
Donít know if itís a good equation or not but itís a popular way of figuring account worth in our area. If I were in a position to buy them in May I would have. Turns out I got them for free and three of the four are solid customers.
Lucky Me! payup

Drew Gemma
01-02-2005, 03:39 PM
Both times I bought accounts they fit into my market blend into the route plus help make it tighter. As far as buying versus advertising. All of my advertising is for aerration, leaf work plus the smalllandscape supply business I am starting out at my farm. Evrytime I advertise for mowing I always get the bad customers and it gives me a headache. So mowing is mostly word of mouth or bid plus the buy outs. With the buy outs I go throught the books find out who the pains are and don't pick them up. Either way go with what fits your long term goal. I want to have to mowing crews one soft/hardscape crew plus my small nursery.

rmpettit
01-02-2005, 05:35 PM
So back to the first question. I was wondering how to determine the value of a lawn. I have heard:

- 4 times the value of one cut...or one months revenue

And

- A flat fee of $100 per contract

Are there any others...lets stay on topic and not discuss whether or not purchasing contracts is a good idea.

Fantasy Lawns
01-02-2005, 06:04 PM
fore us down here the average rate for just "buying accounts" & NOT a business is 2 months of monthly billing on resi n 3 months for comm

coarse length of contracts .... how long have they had it .... any extras they get ..... accual size of job vs the "present income" (is it bid correct or even better can I perform the job in less time than how it is presently bid)

these would be my concerns

packerbacker
01-02-2005, 06:29 PM
Well said hoyboy. As for packer backer, your lack of thinking it through amazes me. If you would have thought it through you would have realized that there are situations where a person can't wait for income. They have families and bills to pay.Also, not everyone is a good salesman and may not be able to sell themselves/services as well as others can. Please think things through more thoroughly and don't throw a blanket statement on things.

Youth, it's wasted on the young.





Then they should have a solid job, not starting a business.

packerbacker
01-02-2005, 06:32 PM
Packerbacker,
So you are telling me that at some point when you retire or decide to move on to some other business you will just quit and not try to sell your business?? If this is true then you have no business at all just some people you mow for? So the only value of your "company" is the mowers?






Damn right ill sell the customers! I can see just by the responses here that there is one born every minute! If some sucker wants to buy something he can get for free then more power to ME.

I on the other hand will advertise and use my good work to get referals.

And whats to say that the customers he bought will stick with him for more then a couple months? A contract? What if they dont do contracts? If theres an upside to spending money on something you can get for free i still havent seen it.

biglawndog
01-02-2005, 11:05 PM
Then they should have a solid job, not starting a business.


I'm amazed by your lack of intelligence. :dizzy:

mbricker
01-03-2005, 01:16 AM
Hey guys, maybe we should all move to Overland Park, Kansas. If it is that easy to pick up customers there, I would guess there aren't nearly enough lco's operating there.

As far as value of a customer list, here in NW Arkansas, the going rate is a month's revenue, more or less.

I got that information from another lco who sold out a couple of years ago, and from a business broker. Business brokers in this area don't usually mess around with something as small as a one or 2 man lawn service. but they are willing to give you helpful advice about what the going rate should be. Try a couple of business brokers in your area to get some idea of the appropriate value in your locality.

Lawnworks
01-03-2005, 07:36 AM
I am a believer in a advertising, but I don't think buying someone out should be ruled out. I would buy certain companies out around here because of their great accounts. Flyers are not the end-all to high end accounts. I mean one co. had 65 residential accounts that grossed 20k a month. It would prob take 5-10 years to get that calibur of client w/ flyers.

packerbacker
01-03-2005, 08:12 AM
You guys crack me up. Go ahead and pay for customers when i get them for next to nothing. Watse your money. It is yours after all.

And yes! Customers ARE easy to get. Do a good job and get references. Put your name in phone book. Send out postcards or flyers. Do some cold calling or just go door to door.

But why would you want to do that when you can waste money buying them! You have all revealed the secret of wasting thousands of dollars in one fell swoop! Thanks for sharing the info and showing me what NOT to do!

olderthandirt
01-03-2005, 08:13 AM
I on the other hand will advertise and use my good work to get referals
Then why do you insist on lowballing to get your customers ?

Mac

packerbacker
01-03-2005, 08:14 AM
I'm amazed by your lack of intelligence. :dizzy:





Funny, i was thinking the same thing when i read your post.

Having a family and kids and leaving a stable job to start a lawn care company isnt the smartest thing a person can do. If you were single on the other hand then go ahead and do it but when you have people counting on you, you better have stability in your life.

packerbacker
01-03-2005, 08:16 AM
Then why do you insist on lowballing to get your customers ?

Mac




ROFLMAO!!!!!!!!!!!!!!

Could you provide the post where i said i lowballed? Ill be waiting for it.

If your going to accuse me of things have the sense to back it up!!! Is that to much to ask for?????

Dropping your price 1 to 2 dollars IS NOT lowballing. Its called being competetive. If I dropped it 5-10 dollars a lawn then i would be a lowballer.

Cmon guys! Understand the difference!!!!!!!!

olderthandirt
01-03-2005, 08:32 AM
ROFLMAO!!!!!!!!!!!!!!

Could you provide the post where i said i lowballed? Ill be waiting for it.

If your going to accuse me of things have the sense to back it up!!! Is that to much to ask for?????

Dropping your price 1 to 2 dollars IS NOT lowballing. Its called being competetive. If I dropped it 5-10 dollars a lawn then i would be a lowballer.

Cmon guys! Understand the difference!!!!!!!!

No I won't waste my time finding the post you said you would just charge $30 a lawn instead of $35 and take it from another lco. You not here to learn, only show how little you know

Mac

packerbacker
01-03-2005, 08:37 AM
No I won't waste my time finding the post you said you would just charge $30 a lawn instead of $35 and take it from another lco. You not here to learn, only show how little you know

Mac




LOL, then ill assume you cant back it up and your doing nothing but making things up! I never once said any of those things!

What i said was if i can get a yard by underbidding someone a couple bucks then yes, i will do it.

And if your so against companies cutting prices on a few things ill also assume that you dont buy things from store on sale, you wont find a cheaper gas station and you wont accept rebates on brand new vehicles!

olderthandirt
01-03-2005, 08:52 AM
ROFLMAO!!!!!!!!!!!!!!

Could you provide the post where i said i lowballed? Ill be waiting for it.

If your going to accuse me of things have the sense to back it up!!! Is that to much to ask for?????

Dropping your price 1 to 2 dollars IS NOT lowballing. Its called being competetive. If I dropped it 5-10 dollars a lawn then i would be a lowballer.

Cmon guys! Understand the difference!!!!!!!!

Bobbygedd calls me a lowballer because i dont charge as much but the fact is , I dont have to charge as much. I dont have employees, i dont have astronomical gas bills, i dont have $40,000 wrapped up in equipment. And if doing a house for $50 instead of $55 is bad then i guess im a bad owner.

kinda sums it up, you don't know the differnce

Dropping your price 1 to 2 dollars IS NOT lowballing. Its called being competetive. If I dropped it 5-10 dollars a lawn then i would be a lowballer.

So in your own words you are a low baller and thats how you get your accounts

Your post above #33



Mac

rodfather
01-03-2005, 08:55 AM
Actually, if you're at a 50% net profit margin, buying accounts isn't all that expensive.

Let's say you and someone else agree to a price equivalent to 2 month's revenue. Actual cost will then amount to 1 month. Depending on the time of the year your purchase these accounts, your expense will be recouped quickly (even more so if premium services are offered).

I'm not saying advertising or flyers don't work. But buying accounts who already want and need your service (from you or anyone else) does have merit.

packerbacker
01-03-2005, 08:58 AM
Actually, if you're at a 50% net profit margin, buying accounts isn't all that expensive.

Let's say you and someone else agree to a price equivalent to 2 month's revenue. Actual cost will then amount to 1 month. Depending on the time of the year your purchase these accounts, your expense will be recouped quickly (even more so if premium services are offered).

I'm not saying advertising or flyers don't work. But buying accounts who already want and need your service (from you or anyone else) does have merit.






Maybe it does in your situation but as i explained before i dont make as much as some people here and im cheap with my spending. Its not justafiable to me to spend money on something like that. Your not going to get the instant results of having the yards but in the long run your SAVING and the goal of everyone is to MAKE money and spend as little as possible.

packerbacker
01-03-2005, 09:02 AM
.[/B][/U]

kinda sums it up, you don't know the differnce

Dropping your price 1 to 2 dollars IS NOT lowballing. Its called being competetive. If I dropped it 5-10 dollars a lawn then i would be a lowballer.

So in your own words you are a low baller and thats how you get your accounts

Your post above #33



Mac






LMAO, once again you take something, spin it and then use it for your own without knowing the situation.

Ill explain this as simple as possbile

A 50 dollar yard around here is hard to come by for me so i can afford to drop 5 bucks to pick it up. If a yard is 35-40 then i will drop 1 to 2 dollars to get it. There is a huge difference between a $50 yard and a $30 yard.

Now heres a quote from you!




No I won't waste my time finding the post you said you would just charge $30 a lawn instead of $35 and take it from another lco.



Looks like someone did waste their time...

rodfather
01-03-2005, 09:05 AM
Your not going to get the instant results of having the yards but in the long run your SAVING and the goal of everyone is to MAKE money and spend as little as possible.

How am I not getting instant results? I am purchasing a client list from someone who (another LCO) is providing similar services as my company provides. I can't go wrong other than screwing things up by something I might (or my employees) might do.

Advertising and flyers on the other hand is the same to me as rolling dice. I may or may not hit. And my "hits" may not be the ones I want too after I go and look at them.

packerbacker
01-03-2005, 09:08 AM
How am I not getting instant results? I am purchasing a client list from someone who (another LCO) is providing similar services as my company provides. I can't go wrong other than screwing things up by something I might (or my employees) might do.

Advertising and flyers on the other hand is the same to me as rolling dice. I may or may not hit. And my "hits" may not be the ones I want too after I go and look at them.




Your not getting the same results as buying them because your not getting the yards INSTANTLY. You have to wait for the calls. You dont get a list handed to you.

MY main concern that NOBODY has answered is whats to say the customer doesnt dump you a month later for someone else? A contract? What if they dont do contracts? Then does the price of the customer list go down for potential people who will leave you? Its a crapshoot also.

olderthandirt
01-03-2005, 09:09 AM
yeah you got me there packer I did waste my time. To prove you lyed or can't remember and now you want to make up excuses to cover what you said. The only thing you said thats been true and correct is your a lowballer and thats in your words. Now I"m LMAO

Mac

packerbacker
01-03-2005, 09:13 AM
yeah you got me there packer I did waste my time. To prove you lyed or can't remember and now you want to make up excuses to cover what you said. The only thing you said thats been true and correct is your a lowballer and thats in your words. Now I"m LMAO

Mac





Think what you want. You didnt prove i "LIED". Im not making any excuses for what i do. Thats how i charge. If you dont like it then dont bother filling out an application to work for me.

olderthandirt
01-03-2005, 09:17 AM
Think what you want. You didnt prove i "LIED". Im not making any excuses for what i do. Thats how i charge. If you dont like it then dont bother filling out an application to work for me.

Well you may not be a business man but you might make a comedian if you lowball enough of them :dizzy: BTW did you forget that you don't have employees or any of the "big" overhead thats how you lowball. You just keep stepping in it

Mac

packerbacker
01-03-2005, 09:19 AM
Well you may not be a business man but you might make a comedian if you lowball enough of them :dizzy:

Mac





Well well well, another "good ole boy" has turned this into a scrub thread! Surprise surprise!!!!!!!!!!!!!!

When he couldnt come up with a valid argument against me he turns to calling names and attacking. Thanks for proving my point all along. You make my job alot easier. Im done with you.

rodfather
01-03-2005, 09:24 AM
You dont get a list handed to you.


Of course I get a list John! What the hell else would I be purchasing? :dizzy:

I get a list b4 I give you a final check. This list will have names, addresses, and how much you are getting each week to mow each of these lawns. Then I will drive around to all these places and look at them. After my evaluation, I'll decide which ones I want and which ones I will pass on. It's real simple, trust me.

Finally yes, it too is a crap shoot. But as I previously mentioned, if things get screwed up or they dump me, the blame will probably be on my part. It is my job (and the prior LCO too as well) to see that the transition goes smoothly and to best minimize the probability of getting dumped....another reason to pay the money for accounts over a specific time period.

BUT, I'll take my hard-earned dollars any day buying accounts vs. door to door flyers or ads in the newspaper. Period

packerbacker
01-03-2005, 09:27 AM
Of course I get a list John! What the hell else would I be purchasing? :dizzy:

I get a list b4 I give you a final check. This list will have names, addresses, and how much you are getting each week to mow each of these lawns. Then I will drive around to all these places and look at them. After my evaluation, I'll decide which ones I want and which ones I will pass on. It's real simple, trust me.

Finally yes, it too is a crap shoot. But as I previously mentioned, if things get screwed up or they dump me, the blame will probably be on my part. It is my job (and the prior LCO too as well) to see that the transition goes smoothly and to best minimize the probability of getting dumped....another reason to pay the money for accounts over a specific time period.

BUT, I'll take my hard-earned dollars any day buying accounts vs. door to door flyers or ads in the newspaper. Period







I think your getting confused. You DONT get a list handed to you when you have to get the business on your own. Thats how your not getting instant results!

I said you dont get instant results when you have to get the list on your own

olderthandirt
01-03-2005, 09:28 AM
Well well well, another "good ole boy" has turned this into a scrub thread! Surprise surprise!!!!!!!!!!!!!!

When he couldnt come up with a valid argument against me he turns to calling names and attacking. Thanks for proving my point all along. You make my job alot easier. Im done with you.

You get mad when someone points out the truth ! Can't play with th big boys so now your gonna take your toy and go home, Well come on back when you grow up and want to learn something. Your only a part time professional in your OWN mind.
Now that I pointed out the obvious I'll wipe my shoe of you

rodfather
01-03-2005, 09:37 AM
Well, I think I've had enough of this for the time being...good day all.

packerbacker
01-03-2005, 09:41 AM
At least my main concern got answered!!!!!!!!!!


Until someone comes up with a valid reason of why you should buy a customer list when there is a chance the customer will leave you im not buying into the whole sham.


BTW if anyone in KC wants to buy a list of names i just copied the phone book onto my computer and will sell it for $100,000. I think over a million names is worth that much!

desert rose gardening
01-03-2005, 09:43 AM
3 x$2,500.00=$7,500.00, I would offer $7,500.00

hoyboy
01-03-2005, 09:50 AM
$300 isn't going to buy you crap. Course, maybe I'm wrong...maybe you spent $300 and did get crap.

Folks, I think this is a classic example of someone who doesn't know the true cost of doing business...or acquiring business. If this guy (and others like him) thinks he can get quality customers for almost free, is it any wonder that we face competition from people who are working at 1/2 our rate? They simply do not know what their costs are. They are not in business for very long, but unfortunately there are 3 other guys right behind him ready to give it a try as well.

A quality customer list is very valuable. You cannot compare a bunch of flier-responding, tire kicking, yellow-page inquiries ready to jump ship at any moment...with a quality, time tested core group of happy customers who have been with you for a number of years.



Dan

packerbacker
01-03-2005, 09:53 AM
$300 isn't going to buy you crap. Course, maybe I'm wrong...maybe you spent $300 and did get crap.

Folks, I think this is a classic example of someone who doesn't know the true cost of doing business...or acquiring business. If this guy (and others like him) thinks he can get quality customers for almost free, is it any wonder that we face competition from people who are working at 1/2 our rate? They simply do not know what their costs are. They are not in business for very long, but unfortunately there are 3 other guys right behind him ready to give it a try as well.

A quality customer list is very valuable. You cannot compare a bunch of flier-responding, tire kicking, yellow-page inquiries ready to jump ship at any moment...with a quality, time tested core group of happy customers who have been with you for a number of years.



Dan






LOL!!!!!!!!! Let me ask you something. You buy a customer list from someone. How in the hell do you think THAT person got the customers????? He went out and got them by advertising! Now he is turning around and selling something he got for almost nothing to some sucker he found that wants instant gratification.

And once again my question goes UNANSWERED

PaulJ
01-03-2005, 11:51 AM
[QUOTE=packerbacker]What i said was if i can get a yard by underbidding someone a couple bucks then yes, i will do it.

QUOTE]


packer ,
That is the exact definition of a lowballer.

Ane you have no qarentee they will stay wiht you when the next guy comes along a couple buck sheaper than you.

[QUOTE=And yes! Customers ARE easy to get. Do a good job and get references. Put your name in phone book. Send out postcards or flyers. Do some cold calling or just go door to door. QUOTE]


That sure doesn'tsound like getting clients for free.

And the ones you get will probably be looking for the cheapest, not quality.
But maybe that's you.

And if buying a cusomer list, most here said don't pay unless they stay. That to me means at least a one year contract. If you keep continuety of work,quality and price they don't have a reason to leave.

You questions have been answered. YOu just don't lie the answer.
Just becauses someone thinks or does things different than you does not make them wrong, and untill you learn that your opinions won't be worth a cra*.
Maybe you and far away should get together and go pick fights somewere else.

packerbacker
01-03-2005, 01:48 PM
[QUOTE=packerbacker]What i said was if i can get a yard by underbidding someone a couple bucks then yes, i will do it.

QUOTE]


packer ,
That is the exact definition of a lowballer.

Ane you have no qarentee they will stay wiht you when the next guy comes along a couple buck sheaper than you.

[QUOTE=And yes! Customers ARE easy to get. Do a good job and get references. Put your name in phone book. Send out postcards or flyers. Do some cold calling or just go door to door. QUOTE]


That sure doesn'tsound like getting clients for free.

And the ones you get will probably be looking for the cheapest, not quality.
But maybe that's you.

And if buying a cusomer list, most here said don't pay unless they stay. That to me means at least a one year contract. If you keep continuety of work,quality and price they don't have a reason to leave.

You questions have been answered. YOu just don't lie the answer.
Just becauses someone thinks or does things different than you does not make them wrong, and untill you learn that your opinions won't be worth a cra*.
Maybe you and far away should get together and go pick fights somewere else.







I dont mean to be a jerk but i have no idea what that says. Please take the time to form sentences and thoughts. It makes reading the boards alot easier when we dont have to decipher the posts.

PaulJ
01-05-2005, 12:49 AM
So Sorry I didn't use the spell check first.
I quess not everyone is as perfect as you think you are.



[I][QUOTE=packerbacker]What i said was if i can get a yard by underbidding someone a couple bucks then yes, i will do it. QUOTE]

packer ,
That is the exact definition of a lowballer.


And you have no guarantee they will stay with you when the next guy comes along a couple buck cheaper than you.

[QUOTE=And yes! Customers ARE easy to get. Do a good job and get references. Put your name in phone book. Send out postcards or flyers. Do some cold calling or just go door to door. QUOTE]

That sure doesn't sound like getting clients for free.

And the ones you get will probably be looking for the cheapest, not quality.
But maybe that's you.

And if buying a customer list, most here said don't pay unless they stay. That to me means at least a one year contract. If you keep continuity of work,quality and price they don't have a reason to leave.

You questions have been answered. You just don't like the answer.
Just because someone thinks or does things different than you does not make them wrong, and until you learn that your opinions won't be worth a cra*.
Maybe you and faraway should get together and go pick fights somewhere else.

GroundKprs
01-05-2005, 02:07 AM
Man, oh man, how the small minds can hijack a thread!!

The question was how to figure purchase price if buying, not whether or not to buy. Even when the original poster asks again for the information, the small minds need to argue about something else. Oh, for the good old days, when people just argued about whose truck had the largest pen1s.

In general in the green industry, maintenance contracts are purchased at 10-15% of annual revenue, with up to a 6 month retention condition. To state a number of months is not very functional, because some of us mow for 7-8 months and others mow for 10-12 months.

But in the fert-n-squirt part of the trade, it is 100% of annual revenue, and I've heard of it even going up to 150% in high competition areas.

Soupy
01-05-2005, 05:00 AM
At least my main concern got answered!!!!!!!!!!


Until someone comes up with a valid reason of why you should buy a customer list when there is a chance the customer will leave you I'm not buying into the whole sham.


BTW if anyone in KC wants to buy a list of names i just copied the phone book onto my computer and will sell it for $100,000. I think over a million names is worth that much!

Good customers are hard to find. You could flyer everyone of my customers and not get one of them. The only way you are going to get my good customers is if I sell them to you!


Another reason to buy customers is because you want more then 30 measly customers. You go out and you buy up all the accounts you can and start making money right away. You can spend one year running around and lowballing and gain some accounts. Or you can be making money all that time that you can use to pay off the accounts with.

Why do you think TGCL, Scott's etc. buy accounts all the time. It cost a lot of money to advertise etc.

You are not getting your customers for free. You spend a few dollars on a cheap flyer - you travel around handing them out - you lowball to get the accounts (which are bad accounts). You just spent money + time (which is money you could have been making on your ready made accounts) + the loss revenue every cut by lowballing (which will add up to a lot over time).

How many times do you think your cheap flyer, lowball antics are going to work before you run out of potential customers looking for the cheapest price. Do you think you are going to hit the same neighborhoods and retain another 30 customers?

If you low-ball a customer by $3-5. that adds up to $90-$150 the first year (30 cut season) that you paid for that customer. Now you get to keep paying and paying (if some other lowball sucker doesn't come along) every time you cut these cheap customers lawn. And don't even tell me you are going to raise the price on these price shoppers. It ain't going to happen.

Many companies buy other companies. It isn't something new.

Open your eyes, and realize that you can be more then a grass cutter!

kutnkru
01-15-2005, 12:16 AM
Up North it was usually based on an installment plan derived from the number of clientele YOU retained.

Many people I talked with said they would give say 40% of the capital up front for the client lists. Then after 3 mos they would have paid say another 30% of the balance due. Finally they would calculate the remaining balance based on the number of clients who retained YOUR services after say another 3 mos or even possibly due at the end of the season to allow you operating capital while trying to keep afloat.

Down here in the South many operators will try to get 2 mos for residential accts, 3 mos for commercial accts, and Ive even had guys ask for 6 mos for full-service beachside accts.

The thing you need to keep in mind is that you WILL have a churn rate as its the nature of the beast. If I buy clients from someone else, their clients like them for being THEM - not necessarily the quality service they provided in the past. Therefore I need to be prepared to have some filter by the wayside. Sometimes they dont but I would anticipate a certain amount will when factoring your numbers to be safe.