8 small lawn accounts for $3,500.. He's crazy!!

Discussion in 'Starting a Lawn Care Business' started by CMLawnServices, Mar 14, 2006.

  1. CMLawnServices

    CMLawnServices LawnSite Member
    Posts: 12

    Backgrounds:
    My friend from my same town has 8 small lawn accounts. He has 2- $35 lawns, 5- %40 lawns, and 1- $60 lawn that he JUST mows and trims weekly. They're all in his small neighborhood near his house which means alot of odd and end jobs come up for him. He claims to make about $4,000 a season, and $5,000 all together, including odd and end jobs.

    Story:
    He's going off AWAY to college, the middle of august, and spending his last summer getting stuff ready. I was interested in purchasing his accounts BECAUSE they're close to my house, nice lawns, me and him do similar jobs and it would be a favor for him and a favor for me. This is probably one of the only instances that i would purchase accounts. Acouple guys told me it should be about 3 mows to buy the account (1,000) for his 8 accounts. He said he wants $3,500 just for giving me the accounts. Whats the rule of thumb with this, without telling him to F himself, I'm a good negotiator and I'm working on it. Thanks
     
  2. kirk brown

    kirk brown LawnSite Member
    from Ontario
    Posts: 164

    $3,500 seems really high to me. I wouldn`t purchase accounts in the first place but certainly wouldn`t pay that! you would basically be mowing them for free for the whole summer. It`s your choice but i`d say c-ya later.
     
  3. Freddy_Kruger

    Freddy_Kruger LawnSite Bronze Member
    Posts: 1,064

    Telling someone to go F themselves doesn't necessarily mean your a good negotiator.:p
     
  4. Xterminator

    Xterminator LawnSite Senior Member
    Posts: 279

    Id offer him one Cut price for each lawn unless equipment comes with
     
  5. CMLawnServices

    CMLawnServices LawnSite Member
    Posts: 12

    That's was the exact same thing i was thinking about, the only thing is, i don't want to tell him "forget it" because he personally doesn't know what it's worth, and i honestly don't blame him. But what i do need if possible, some sense to talk into him about how much something is worth or the "rule of thumb" of selling accounts. How much they go for, a certain percentage? What do you think the best way of buying these would be. I offered him a grand, and pay it over a 6 week period, figuring $330 a week from just those accounts, every other week I'd pay him. Let me know. Thanks!
     
  6. CutInEdge Lawn Care

    CutInEdge Lawn Care LawnSite Senior Member
    Posts: 677

    What happens if he doesn't get them sold. You could always advertise with door hangers and pick them up later if he isnt willing to negotiate. $3500 seems really high. I would never buy accounts unless there was a 3 yr min iron clad service agreement. Good Luck!!
     
  7. prostriper

    prostriper LawnSite Senior Member
    Posts: 336

    The problem with a situation like this is if you purchase the accounts and the customers back out after purchase you are out $3500. You only want to buy a business if the business has a considerable ammount of equity backing it up so if you start to loose any of the business you bought in it you have "sellable equity" to fall back on.

    I think in this instance I would just place a bid on his accounts and see if you get them.

    If he can sell along with it, lets say $1500 in equipment then maybe consider it, but otherwise talk him down in price, or walk away and bid on them yourself
     
  8. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,849

    many moons ago i purchased a handfull of lawns off a kid going to college. We agreed 4 mows was an even trade, it did work out, i kept 4/5 of them and dropped the other one cause it was a PITA. However I would think twice about buying accounts again. the money could be better invested in advertising.

    Edit: he did introduce me to all the clients and explain the situation and they all were fine with it as long as services remained at par or better.
     
  9. CMLawnServices

    CMLawnServices LawnSite Member
    Posts: 12

    This kid is a nice kid and wanting to take me around to all his 8 clients, meet with them, establish a price, and keep them. After seeing his accounts and the job he does, I'm certain that i can replicate it or even exceed the quality so the costumers will be very happy. And if all goes well, i would pay him. THE PROBLEM IS, how much is it worth? A couple guys have said its 3 mows per acount. I need to talk to him and explain because 3,500 is just a random number in his little heart. He has nobody else looking for them, he wants me to buy them. If not, he says August will roll around and then what will he do? Sell them to a big guy? No, the accounts will be worthless with only a couple months left. Does $1,000 sound good? JUST the accounts. Ha it's confusing but hopefully I'm making sense of this:)
     
  10. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    About 10% of the gross (about 1000) would be good, but I wouildn't worry about it. You can this many jobs in a week or two during this time of year.
     

Share This Page