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Buying another lco please respond

Discussion in 'Business Operations' started by PennyhillLawn, Mar 15, 2006.

  1. PennyhillLawn

    PennyhillLawn LawnSite Member
    Posts: 11

    the snow plow contractor that i do some work for called me the other day and told me that he knows a guy who is getting out of the lawn care business; he will be selling between 50 to 60 lawns. the lawns will be right over the pennsylvania line, all of my customers are in delaware. i currently have around 50 lawns, all residential that i have been taking care of for the last 2 years. does anyone know what these lawns are worth i havent talked to the guy about any numbers yet he told me that we will meet on saturday and go over some things. also does anyone know if i will need a PA license and do i have to charge a service tax or sales tax or anything like that?
  2. CNYScapes

    CNYScapes LawnSite Senior Member
    Posts: 916

    I have bought accounts from 3 other lco's in the past 6 yrs. I have paid between 15% - 25% of the yearly gross on these accts. So for a lawn that grossed $1000 last yr. you should pay between $150-$250. I think this is a great way to expand a business.
  3. ODwyerPW

    ODwyerPW LawnSite Member
    Posts: 72

    I've done this too. 15-25% is reasonable for residential, especially if you get the driveway plowing/blowing for the winter.

    Make sure you find out what he charged each of these customers for cleanups, prunings, mulching, etc.... I had many recently purchased customers claim that I was gouging on the cleanups last year. I had customers look at their records, and guess what. I wasn't. They were just older folks with short memories.

    When buying you will be making the pitch to the customers that you will service them in the same fashion as the fellow you are buying from and that you will honor his pricing. Make sure you know all of his pricing as they relate to the customers you are purchasing.

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