account purchase advice

Discussion in 'Lawn Mowing' started by jake65, Aug 14, 2006.

  1. jake65

    jake65 LawnSite Member
    Posts: 75

    I had or still have an opportunity to purchase 20 lawn which generates
    640\wk - 15000\yr. He told me he spoke to other companies that told him he should sell the lawn accounts for a 1\3 of the annual income it generates - which would be $5000. Does that seem high for 20 lawns that are not guarenteed to be mine next spring- even if they were this seems to be high. Any thoughts on this and how would you place an offer?

    Thanks
    Jake
     
  2. procut

    procut LawnSite Bronze Member
    Posts: 1,853

    Sounds high to me as well. I recently bought some accounts and and paid 2X or 3X what ever they made per cut.
     
  3. grant087

    grant087 LawnSite Member
    Posts: 184

    thats what i paid for the ones i bought this year too
     
  4. lawncuttinfoo

    lawncuttinfoo LawnSite Bronze Member
    Posts: 1,010

    Sure pay him that.....in the spring and use the number of actuall renewals, if they want, pay 1/3 of the income you recieve on the accounts the rest of this year and use it toward the next year figure.

    There is no sense in paying basically 100% of this years revenue (1/3 of the season left) then risking losing them all to misworded contract and the guy signs them back next season :0
     
  5. roscioli

    roscioli LawnSite Senior Member
    Posts: 749

    Whatever you agree on for a price, negotiate in a deal to not pay for the ones you lose through no fault of your own. Everytime this happens there will be losses that are nobody's fault, people that just say "hey, i think i will get my mower running again".. that type of thing. I DO NOT mean people that you piss off by not showing up the first 3 weeks.
     
  6. newbomb

    newbomb LawnSite Senior Member
    Posts: 391

    I would not pay for any residential accounts. You could easily pick up 20 resi's in the Spring with a $100 newspaper ad.
     
  7. jake65

    jake65 LawnSite Member
    Posts: 75

    On top of that, it is a 30 min drive to the location of all these lawns. Not that I couldn't make 1 route out of these, My money might be better spent on advertisement and pavement pounding in the late winter and early spring

    jake
     

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