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Buying accounts?

Discussion in 'Lawn Mowing' started by bruces, Jul 18, 2001.

  1. bruces

    bruces LawnSite Senior Member
    Posts: 648

    I'm just starting out part time & working my nine to five full time.
    I've come across a fellow who wants to sell . He has about 58 mowing accounts, most residential, generating 39,000 per year . Some are biweekly and others are weekly.

    He wants 42,000 with truck & equip or 30,000 for accounts. I don't have a good list of equipment yet, but I probably have equipment to handle the business now.

    Is there a rule of thumb for what accounts should be worth?

    Percentage of gross, etc?

    Any assistance will be appreciated, especially from anyone who has had any experience buying or selling accounts.:confused:
  2. TotalLawn

    TotalLawn LawnSite Member
    Posts: 118


    WAY, WAY, WAY, WAY to much!!!!

    I have made half that in 3 months (new biz) and didn't buy crap from anyone.

    Don't walk, RUN the other way.
  3. Eric ELM

    Eric ELM Husband, Father, Friend, Angel
    Posts: 4,831

  4. GreenQuest Lawn

    GreenQuest Lawn LawnSite Senior Member
    Posts: 822

    Unless your desperate for accts. I would advise against it. Sounds like he is trying to make a years pay with no work.

    I guess I am just really against this idea of buying and selling accts. I think the customer has the right to decied whether or not to switch LC's.

    Ask to check them out, then visit them on your own tell them (the customers) that Jo Blow is giving up the Lawn care and trying to make a quick buck off their account, get the accounts for free and keep the 39 grand.
  5. Lawnshark

    Lawnshark LawnSite Member
    Posts: 70

    I would go with the other guys and say STAY AWAY!
    If you know the guy is going out of business ask why.
    Is his work in a bad area?
    Are the customers bad?
    You know what I am getting at.
    Hope this helps.
  6. Bob_McNaughton

    Bob_McNaughton LawnSite Member
    Posts: 94

    58 accounts and only 39k a year? These must be his scrub yards. I'd say forget it.
  7. what is the average cut? cause 39K for 58 lawns for the full season, cut, leaves? leaves are usually a nice chunk of money, those and the spring cleanup. so lets see if the lawns are even worth the money, forget the investment, but if the lawns are even proffitable.
  8. bruces

    bruces LawnSite Senior Member
    Posts: 648

    The guy is supposed to be retiring, but it does seem extremely high. When I look at it on an average per account per year, its only $672 per account. If each account gets 30 cuts, that's 22.40 per cut. Defininitely not prime work.

    Seems like the smart way to go is to spend money on advertising and keep building from the ground up with decent accounts.
  9. SLS

    SLS LawnSite Bronze Member
    from Mars
    Posts: 1,540


    Something else to think about too....

    ...is there any guarantee that the customers will keep you as their lawn service?

    It is the clients choice.

    A pal of mine bought a lawn service from a guy who retired after 13 years in the biz with 47 accounts, 1 old Ford E250 van and 22x8 trailer, 1 OLD Dixie Chopper, 2 rough Scag WB's and various blowers, trimmers. I looked at the man's books going back over the last 5 years and it averaged about 60k yearly profit. My friend bought it for 35k. The van was more trouble than it was worth so he got $600 trade-in and got a new truck.

    The problem was that about 10 clients dropped him before he even started their service...roughly a 18% to20% loss of customer base that he PAID for. :(

    I don't believe there is any way a seller can guarantee that his customers will keep you around.

    I won't be buying anyones 'customer list' anytime soon. ;)
  10. Premo Services

    Premo Services LawnSite Bronze Member
    Posts: 1,516


    :mad: BAD IDEA :mad:
    When I started out, I was putting flyers out and was not getting many responses. I decided that I should buy an established business. :( WHAT A MISTAKE!!!!!! :(
    The lco was about to loose most of the accounts, because he used a large rider on all the lawns. The lawns were tore up,rutted badly.I now believe that the customers thought that I would do the same thing that he done. I could not get to look at accounts until I purchased the business from him. On the day I bought the business we drove to the accounts, and 6 customers said they was going to switch companies and they would find someone else.
    The bank, and small business association drug their feet on the loan until it was april, grass was starting to grow pretty good. Three of the accounts he had not done a fall cleanup, and customers were upset that the leaves would kill the lawns. I still have some of the original customers, but through quality work, referrals it has grown with good paying accounts, and the proper money for doing the lawn maintence. I cannot to this day figure out how the he!! he priced the work. If the accounts are priced that low, you will be working for nothing, plus, you will probally need to have help at first, then you will be working for less than nothing!
    IMO Don`t buy the accounts, stay at your job, make some flyers and put them out. When you get some customers, you can get a god price for the cutting, and do quality work, then you will get referrals for more better customers.

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