$15,000.00 ?????

Discussion in 'Business Operations' started by peteloare, Jan 18, 2002.

  1. peteloare

    peteloare LawnSite Member
    Posts: 59

    Here in Michigan, I have a prospect to purchase lawn mowing customers.I am not interested in his equiptment.
    This co has 47 accounts,covering a 130 mile round trip,80 man hours to complete,50 acres total, grossing 61,000.00.
    He is asking 15,000.00 for his customer list.
    Any oppinons on the price alone?
     
  2. Turfdude

    Turfdude LawnSite Bronze Member
    Posts: 1,900

    IMO, way too much travel!!! Jobs are too far apart. and accounts bring in less than $1500.00 each per year. Do you want some swamp land too??

    Sorry for the sarcasm. Around here, I can get approx $1500-$2000 per year per client for small res. props (under 5ksqft) in a middle class area and radius less than 6 miles!!

    If you do decide to go this route, have a legalized "no-complete clontract" drawn up by legal representation!!

    Bob
     
  3. Highpoint

    Highpoint LawnSite Member
    Posts: 153

    If your not interested in his equipment and you know where some or all of his accounts are. Just go bid the accounts. Don't spend the dough. You could loose all the accounts and your out the cash. I'd also try and stay closer to home. Go follow him around one day in a friends car so you don't get eyed. Write down everything he does and time to complete. You can do It!
    ps. If the guy is a friend, going behind his back may lose a friend. Duh.;) Good luck.
     
  4. OBRYANMAINT

    OBRYANMAINT LawnSite Senior Member
    Posts: 555

    that 80 hourswill eat up two guys full time solid after payroll taxes and equipment maintenance you don't come out that much ahead, plus you will need to recoup your initial investment

    keep looking or work him down A LOT

    i would also pass because of the mileage
     
  5. MATTHEW

    MATTHEW LawnSite Senior Member
    from NE OHIO
    Posts: 665

    Very risky!
    I agree that you may very well lose those accounts. When a new year starts, who's to say that the customers jump ship anyway?
    Afterall, they signed with the previous owner-they'll say.
    Do a search on buying accounts. Mostly negative comments are there.
     
  6. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    seems like a lot of man hours to generate $61k?
     
  7. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Posts: 2,810

    Seems like a lot of man hours for 50 acres..
     
  8. If I were buying accounts I would negotiate an offer of 10-20% down and the balance to be paid as commisions for the first year, also making it payable only on money collected. It will save a lot of time and worry about how good the account are, so if there is no income there is no expense. Also any accounts that do not stay a month should be deducted from the original amount as a future credit. 15k seems like way too much for that list. Guess it depends on how bad you or somebody else wants that business. I'd spend more on advertising before taking that deal.
     
  9. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,706

    61K/47acct = $1298revanue/acct
    15K/47acct = $319ea to aquire


    You can get customers for less than $319 ea. that would probably be more convenient, better pay and more profitable.
     
  10. SCL

    SCL LawnSite Senior Member
    Posts: 543

    I had a competitor call and say he was getting a real job and wanted to know if I wanted to buy his plowing accounts. My response was that I already knew who they were but thanks for the heads up and I'll just go bid them. He didn't say much but the point is, just cause you give him the money doesn't mean an enterprising entrepeneur such as myself won't end up with it anyway. Most contracts, if there are contracts and not just agreements, are year to year, leaving you vulnerable every 12 months. Give him a finders fee, be generous, and attack these as if they're up for grabs.
     

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