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Old 03-15-2012, 09:01 AM
grassmasterswilson grassmasterswilson is online now
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Buying accounts

There is the possibility that a competitor in a neighboring town is selling out. I have exchanged emails, but he is reluctant to give detailed info, but has offered to show the numbers at a meeting.

Our programs are different. I do 6 apps he does anywhere from 5-10 apps depending on the turf. He also offers disease and insect control on shrubs and I don't. He does no mowing and that is something I offer and hopefully could upsale.

How do you go about buying his clients list. I figured I would base my price on what I would charge on my program not his program(regardless of his numbers). Figured 10% of the gross per customer is the going rate. That 10% would be broken down into 3-5 payments through out the year depending on the client retention.

Anyone done this and how did you go about it?
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Old 03-15-2012, 10:47 AM
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RigglePLC RigglePLC is online now
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For spraying customers you will pay around 90 to 100 percent of his yearly gross price. Generally the buyer will not want to give back any money if a customer is not retained--he will view that as your responsibility.
A payment plan is a good idea. He will not want to sell to you unless you have the equipment and people to do the tree and shrub disease and insect control.
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Old 03-15-2012, 11:11 AM
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turf hokie turf hokie is offline
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Unfortunately, 10% is not the going rate, riggle is right, he is going to be looking for 90-100% of a yearly gross, but that does not mean that is what they or worth or what he will get...but I will say 10% will get you laughed right back out the door.

And you need to base the offer on his numbers, he may be getting more than you, adding value, or less than you and not worth as much....

I have bought some accounts and had some deals fall thru.

PM me and I can give you some information.
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Old 03-15-2012, 11:37 AM
n-green n-green is offline
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I have bought accounts and sold accounts. In my area, for weed and feed customers it's 100% of revenue. This is a bad time of year to sell or buy a lawn business IMO. I would take the money and invest in marketing the area where you want to grow.
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Old 03-15-2012, 12:33 PM
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kbrashears kbrashears is offline
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100% of yearly gross? Are you people crazy? Then you have to supply the product to treat those accounts? Wow. Never.
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Old 03-15-2012, 04:06 PM
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RigglePLC RigglePLC is online now
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Yes, you have to supply product and labor to spray the accounts. But then if they are self-renewing--in the following years they are all yours.
N green is right. This is not a good time to buy or sell accounts, late start. And the customers in question are going to be receiving many brochures and flyers in the mail, from competing companies. It is probably easiest to switch over when the competitor's big sales season has wound down; the customer's mind is elsewhere--say July or August, vacation season.

Naturally, seller has to supply a nice letter stating that ABC is taking over their accounts and will do an even better job, and their guarantee is just as good, if not better.
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Old 03-15-2012, 04:11 PM
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fl-landscapes fl-landscapes is offline
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Quote:
Originally Posted by kbrashears View Post
100% of yearly gross? Are you people crazy? Then you have to supply the product to treat those accounts? Wow. Never.
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It's called an investment
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Old 03-15-2012, 04:43 PM
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RABBITMAN11 RABBITMAN11 is online now
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Originally Posted by fl-landscapes View Post
It's called an investment
50 cent on the dollar is more like it!
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Old 03-15-2012, 09:38 PM
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Ric Ric is offline
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Hello

Yes I am screaming.

WHAT IS YOUR BUSINESS WORTH IF YOU WERE TO SELL IT???????

Sorry but Business are bought and sold by the Gross sales to Profit Margin ratio. Each industry will have it's own Percentage of gross the accounts or business is worth. For example Restaurants generally sell for 3 times last years gross sales. That right 3 time times a years Gross sales.

Pest Control Accounts here in Florida will sell for any where from 80 to 125 % of a years gross depending on the prices a customer pays and how tight the route is. I get at least Two Calls or Letters every month asking if I want to sell my business. Last Business broker that call me, I told them I could sell my accounts today for top dollar and not pay any commission. FACT IS I could sell tonight with one phone call and get 100% of the money up front. Of course the Deal would take a few days to work out details Etc. But I have several competitor with the money who have told me they want my accounts.



BTW In the past when I had a full service company, I found it less expensive and easier to Buy mowing accounts that I could then up sell other services. Plus I got into new Neighborhoods. Think about for a Second. First you are buying established accounts that you only have to start service and invoice. No Big Advertising expense. No Chasing Tire Kickers. No Sales pitches and promises of golden results.


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Old 03-15-2012, 09:59 PM
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DUSTYCEDAR DUSTYCEDAR is offline
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you dont do tree and shrub so you are going to lose all those clients real fast
r these high end or blue collar accounts?
why is the person selling getting sued? foreclosed on?
as for price you will pry have to pay at least 50% of gross but may be as much as 100% or more.
buying a biz is like buying a hooker you may get the clap if you are not careful
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