advice???

Discussion in 'Business Operations' started by williams lcm, Dec 4, 2012.

  1. williams lcm

    williams lcm LawnSite Bronze Member
    Posts: 1,030

    I have know this older lawn guy for about 6 years. Well he is almost 80 and is ready to get out of the business. He has given me a chance to buy his 24 accounts in April for a 1 month payment for each of the accounts. So after the 1st month then I can start making a profit on them? Does this sound like a great deal? Normally I wouldent buy accounts but this sounds like a good deal. An example: If all the accounts(Total) bring in $1700/mo. then that is what he wants. Accounts only and no equipment.
     
    Last edited: Dec 4, 2012
  2. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Posts: 1,420

    I would be sure that the accounts are written contracts and the clients are willing to work with you. Can you speak to each of them?

    One month payment is about average for signed contracts.
     
  3. Raymond S.

    Raymond S. LawnSite Senior Member
    Posts: 981

    Sounds like a no brainer as long as his pricing is in line with yours. Small risk to reward.
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  4. MOturkey

    MOturkey LawnSite Silver Member
    Posts: 2,752

    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.
     
  5. Moose's Mowing

    Moose's Mowing LawnSite Senior Member
    Posts: 453

    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.
     
  6. herler

    herler LawnSite Fanatic
    Posts: 5,144

    Just a thought...

    1/2 upfront.

    +10% You get to run around with him to each and every customer and be personally introduced.
    A few will balk right there, those are deducted but they will likely be few, you paying a 10% extra should help.

    The other 1/2 at the end of the month.
     
  7. I'll throw in my .02. The average per account is $70. This guy is 80 so this is was extra money for him. I would bet a lot of these accounts are underpriced and that his pricing structure is not where it needs to be. How long has he had these accounts? If for a long time with those prices, it's going to be a very hard sell for you to raise people and I would expect to lose more than average if he's had the accounts for a long time. Any more info you can provide?
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  8. Landscape Poet

    Landscape Poet LawnSite Gold Member
    Posts: 3,638

    That is the first thing that popped into my mind as I was reading this. William I am not sure of the quality of your accounts or how bad you need the business but I would work out a deal with him if you do want to proceed that you will pay him AT MOST half at the end of the first month after you have collected and the other half after you have collected at the end of the second month. This way you insure that your exposure is limited. With those prices there is not a chance in hell he has bothered with contracts.
     
  9. ashgrove landscaping

    ashgrove landscaping LawnSite Gold Member
    Posts: 3,446

    Meet all of them and YES YES YES !! Fantastic deal!!!! Are you kidding me..Duuuuhhhh Win WIn WIn dont listen to these city folks who think they know about us country folks I ll give 1500 for them right now.
     
  10. Just curious how its a "Win Win Win?" Have you purchased accounts before?
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