Originally Posted by MOturkey
I bought accounts earlier this year for the same terms. One of the smarter things I've done, as all the accounts were priced correctly to be profitable.
A couple of caveats here, though. It is likely you will lose a percentage of the accounts, even if you keep pricing the same. It just happens anytime there is a change, as you always have those customers who have remained with a certain business because of loyalty, but won't hesitate to switch if the business changes hands. I started out trying to purchase about 18 accounts, if I remember correctly. Four or so told the seller they were going to do something different before the transfer even took place, and another bought their own mower shortly thereafter. I can see this definitely being a factor when dealing with an LCO who is 80 years old, as I am guessing many of his clients have been with him for many years, and probably decided to remain customers as long as he was in business.
One thing you can do is tell him the deal sounds fine, but you will only pay for those accounts who are still customers at the end of the first month. Even if they drop you shortly thereafter, you will have recouped most of your initial investment. Best of luck.
That's sound advice. Even though this guy is 80, I've learned not to trust many people and to GET EVERYTHING IN WRITING. If it's not documented, it never happened. So anything you agree to, be sure to get in written up in a sales agreement. Also, include on there a non-compete for say a 20 mile radius or whatever you think. Not saying the 80 year old guy will start a new company, but what's to stop him from starting one, then letting his son or grandson take it over by taking back all his customers that he just sold you??
Buying lawn accounts seems risky to me unless you can afford to lose the entire batch. I'm sure most times it will work out, but I also get the feeling not many people put a lawn care contract at the top of their importance list. Doesn't make it any less binding legally speaking i guess, But let's face it, what percentage of people takes our line of work as seriously as a real estate deal?? Any one of those customers can just say "F you, I'm dropping you" even if you bought their service contract fair and square. they'll tell you to piss up a rope cause you're "just the lawn guy" and will figure you only know how to mow grass, not run a business. Not saying this is correct, just saying it's how people perceive us.