Buying a customer base...Good? Bad?

Discussion in 'Starting a Lawn Care Business' started by JeffW0011, Feb 21, 2007.

  1. JeffW0011

    JeffW0011 LawnSite Member
    Posts: 178

    Sorry about previous "test" post. I was having problems getting my post to go through and wanted to make sure it was going this time before typing all this again. Here is the short version of my previous question.

    I am a start up operator this spring. My goal is to start with the intention of making it a part-time gig and if things go well to make it a career. I took some time off from the corporate world a while back to serve as the primary childcare provider in my family. It's time to go back to work but I dont wan't to reenter that rat race. I really think I want to cut grass. I have most of my ducks in a row for a projected start time of late March/early April. My early plan is to stick almost exclusively residential and get my feet wet and a good feel for what I am doing before I even think about trying to land any commercial accounts. My goal is to average about 25-30 cuts per week this season between my regualrs and vacation cuts. I already have 4 definite weeklies lined up. I have a handful of strong vacation cuts lined up as well. I have been working on my initial ,marketing campaign and was planning on putting out a few thousand fliers over the next month, business card networking, about 50 personal direct mail letters to strong leads and if I still did not have my needed base perhaps using a direct mail marketing company targeting my immediate community. Any suggestions with any thing so far??
    So I am going over my taxes with my accountant and I mention to him I am starting up this lawncare business. He tells me that he knows a guy that is getting transferred from his FT job who had a small LC operation on the side. I call the guy and we have been talking for a week. I am definetly buying some equiptment from him and wondering about his customer base. He sold his 2 medium sized commercial accounts to someone else. He has 14 residential properties he wants me to buy. I see pros and possible cons to this. How can I be sure these people would give me a fair chance?? I see other problems as well. He says all these people have been with him 3-5 years. The average cut price is about $32ish and the avg # of cuts per season is about 28. He seems like a good dude and promises me he would do everything in his power to get these customers to give me a fair shot. He wants $6000 for these accounts. I am sure he would take less..I have many ideas on possible offers including some more nonconventional ones like a % base payment to him for a period of time. Any suggestions about this and any general advice about anything would be greatly appreciated.
  2. echeandia

    echeandia LawnSite Bronze Member
    Posts: 1,131

    For half that amount you could put together a terrific advertising campaign and have many more than 14 accounts. I would pass. Don't let the fact that he is a good guy make you feel obligated to make a deal.
  3. Deputy25

    Deputy25 LawnSite Member
    Posts: 12

    I would not buy the accounts. While he may seem nice and all there is nothing in writing and there is no guarantee that his past customers are going to stay with you. Unless you have them sign contracts for a year there is no way to guarantee these accounts. I would not spend the money there. I would rather buy equipment or spend money on more advertising.

    STONE SCAPES LawnSite Member
    Posts: 145

    Don't Do It. Place Ad's
  5. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    Heck with that....It is just way too easy to get work in this field. There is no reason for it. Not only that, but there are always the same factors you have to consider (this has been posted here 100 times before). You have a no-compete issue - and it's "loopholes". You have the quality of accounts, you have the quality of customers (yes,...that's right, while he is raping YOU for these accounts, he is giving the good ones away to brother in law). well give bro in law one good lawn in the middle of 4 rugged ones that you do, and guess what? Guess who ends up with them all at the end of the season - or conveniently at the beginning of next season, depending on how your "purchase contract" is written. I've seen it all....You are better off to go get your own. Like I say, it is just WAY too easy to get accounts in this business. There is WAY too much work out there not to be able to fill up your plate. Please don't ask how....just do a search using "getting (or building) new accounts. LOL :) I hope this helps!
  6. hackitdown

    hackitdown LawnSite Silver Member
    Posts: 2,505

    Don't buy the accounts. Spring is almost here. In my area, advertising that costs me $25/wk will bring me 2 or 3 customers per week in April and May, and 2 or 3 per month for the rest of the season. So even at the worst time of the season, I pay about $50 per account.

    I plan to add 30 mowing accounts this year, and plan to do it with about $600 in advertising. I will also get TONS of other business from those same ads (dethatching/aerating/seeding/shrubs/beds/mulch/clean-ups).
  7. Mow2nd-2

    Mow2nd-2 LawnSite Member
    Posts: 178

    I would say don't buy them for the simple reason, We sold off all our accounts a couple years ago to relocate to a different area due to moving houses the people we sold to lost 75% of the accounts mostly due to the fact that they like the way we did it although the work they did looked just as good. Beware if you decide to buy you will lose some no matter what
  8. 2 clowns mowing

    2 clowns mowing LawnSite Senior Member
    Posts: 566

    don't buy them, there is plenty to go around you will have people breaking down your door by mid april. put up some signs that's all you need. hope you have a plan when it rains for three days. the equipment your buying how good is it or are you taking over someone else's junk? buy new there are good deals out there for a ztr mower. check out rich mfg north of indy they have the convertible mower rider and walk behind all in one great mower and they offer 40% off on last years models!!!
  9. Ed Ryder

    Ed Ryder LawnSite Senior Member
    Posts: 541

    14 properties x $32 per cut = $448 per week or $1792 per month.

    $6000 is not realistic for what is being offered.

    With the right assurances spelled out in a sales agreement, if these lawns are priced well, and you like them, and they are tightly located, I would offer a maximum of 1 month's revenue, which he will finance for you, interest free.
  10. GreenN'Clean

    GreenN'Clean LawnSite Bronze Member
    Posts: 1,512

    I would pass on it....

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