Buying Accounts

Discussion in 'Lawn Mowing' started by Kent Lawn Care, Jul 16, 2002.

  1. Kent Lawn Care

    Kent Lawn Care LawnSite Member
    Posts: 69

    I had another company offer to sell my all of their accounts. has anyone had experience with this, like is it a good idea, how much is to much to pay for them, etc.
     
  2. geogunn

    geogunn LawnSite Gold Member
    from TN
    Posts: 3,010

    it could be good or bad idea.

    I think most members will need more info before they can give you reasonable answers to your questions.

    GEO
     
  3. FrankenScagMachines

    FrankenScagMachines LawnSite Platinum Member
    from IN
    Posts: 4,739

    I have also wondered about buying them just single, not a bunch at a time.
     
  4. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    Buying accounts is certainly a good idea if;

    1) You are looking to expand
    2) The accounts are within your current routes
    3) The accounts are profitable

    If the above apply then yes, you'd want to buy the accounts. Now the issues are under what circumstances, for what price, etc.

    Personally, I wouldn't pay more than the equivelant of 1 month's service. And I wouldn't pay it all until the end of first or second month.

    Other terms would have to be worked out with you and the seller. But I'd definitely be sure that the seller agrees to get in touch with the customers and explain that you will be taking over his accounts for him and that you will maintain the accounts just as good as he has in the past for the same amount. People need to feel comfortable with the new business otherwise they will jump ship.

    Personally, I'd LOVE to buy some accounts. Wish I had that opportunity.
     
  5. Kent Lawn Care

    Kent Lawn Care LawnSite Member
    Posts: 69

    lets see, umm more info. well, the gentlman informed me that it is 14 accounts and that it brings in $16,000 a year. (i know its not a ton of accounts but it will increase my accounts by about 20%) around here we average 29-30 cuts a year. as i think of more info that would help i'll let ya know.



    Thanks Jim, that helped me out lots. my biggest fear at this point is just as you explained, that the customer would jump ship when they find out they are getting a new service. ive heard of other companies selling their accounts to another company, then the customers turn around and go right back to the original company because they didnt want the change.
    the gentleman that is offering me these accounts i know will not take them back because of a job change and health reasons. once again though thanks for the input!!!!!!
     
  6. "Non Compete clause" Make him sign one.

    The rest Jim hit on the nail.

    I wouldn't pay more than 3 cuttings and any of the rest of the work that comes with it is a bonus for buying the accounts.
     
  7. Turf Technologies

    Turf Technologies LawnSite Senior Member
    from Florida
    Posts: 590

    I know here it is illlegal to work in an area for 5yrs if you sold a bussiness, so im sure its no diffrent anywhere eles so they wont go back to him anyways. Maybe you should work wityh him on the days he services those accounts so they see your work and they can meet you, Just an idea.
     
  8. dogger

    dogger LawnSite Member
    Posts: 13

    we had a horrible experience with buying another lco last year. The owner understated the amount of revenue that would be brought in by a considerable amount (in the several thousands a month). By the way, we bought about a 100 accounts in addition to the 115 we had already. Also, the lawns had not been cut in 3 to 4 weeks because of his labor problems. This resulted losing a quarter of the accounts because they pissed at the prior ownership. You might want to scout location because the amount of travel may not be profitable, this was definitely the case with the accounts that we purchased. This situation may be the exception to the rule but i would defintely do your homework. Just remember that he's selling the business for some reason. Good luck.
     
  9. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    I doubt that is true at all. And it definitely isn't true "anywhere else". In my state, I know for a fact you gotta get a non-compete contract. Otherwise, the person who sold the business to you can start up shop the next day.
     
  10. FrankenScagMachines

    FrankenScagMachines LawnSite Platinum Member
    from IN
    Posts: 4,739

    How and When do you go about trying to setup a commercial account for next year? I mean, not buying one, but just what's the best way to get the company's attention that you'd like to take care of their lawn next year? When should I contact them and what do I say?
    Eric
     

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