Buying another LCO's customer list

Discussion in 'Lawn Mowing' started by turbo5560, Aug 23, 2007.

  1. turbo5560

    turbo5560 LawnSite Senior Member
    Posts: 304

    So heres the deal... a guy that i sorta know got a hold of me the other day and wanted me to buy his customer list because he wants to get out of the business, at least in my area. His route is about 30 houses and he says it takes him about 2 days by himself to get done. He said he makes about $1500 a week (during those 2 days). He says that he will garantee that I would get the customers as well. He was told that it was worth about $30,000 but said that he would sell it for $5000 to $10,000. (yes i know thats a wide range) He said most, if not all are vacation homes from people down south and are nice accounts. I'm going to look at some of them tomorrow morning, but just wondering if others have had something like this happen to them. Does that price sound reasonable? There is no equipment included, which is fine, i have it all already. So it's just for the customers list.
     
  2. MarcSmith

    MarcSmith LawnSite Fanatic
    Posts: 7,157

    a list is just names, and you get names out of phone book.

    I would not pay for just names. I'd pay for signed contracts....There is no way he can guarantee you the customers if he doesn't have a contract.

    If they were contracts, and if you were guaranteed to have them for a one year, thats a gross income of 30K, would you pay $30K for one year of guaranteed income @ 30K per year, you'd loose money...

    10K is still high, that about what your labor would cost for one season. Id offer 5K and with a retention bonus. Ie he'd get an extra 200 bucks for each client that signs up again the following year.

    Id also look at what he is charging these folks and make sure that the rates are reasonable and not lowball prices...
     
  3. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

     
  4. Americal Vet

    Americal Vet LawnSite Senior Member
    Posts: 250

     
  5. GreenT

    GreenT LawnSite Fanatic
    Posts: 43,014

    Be careful Turbo.

    $1,500 a week from 30 accounts averages out to $50 per cut. Sounds nice but is it realistic?

    If the numbers are real and the properties are priced correctly based on the size and type of services, my offer would be $6k.

    By the way, taking 30 new accounts overnight is not easily accomplished. Will you be ready? Do you have the right equipment?

    Good luck.

    :waving:
     
  6. turbo5560

    turbo5560 LawnSite Senior Member
    Posts: 304

    I talked more with the guy today and he showed me some of the properties. He is baseing his price on 24 accounts that he does every week and he says he makes $1050 a week, plus there are some accounts that are every other or on call basis. I figure between me and my buddy we can get it done in one decently long day. His whole route is about 35-40 miles so not too spread out.
     
  7. fergman

    fergman LawnSite Senior Member
    from VA
    Posts: 286

    this is a very good post guys. i dont know how you can sell a customer. around here they call it selling yards. it just sounds ******** to me because there not your yards to sell:confused: just seems to me that i could walk up on there doorstep and tell them that there guy is going out of buisness and ill be just as good or better and give them refurrals and the yard would probly be mine as long as they didnt think i was lying about the other guy dropping out. its not like they really care or know the people personally or related to that is gonna (buy) the customers.:dizzy:
     
  8. turbo5560

    turbo5560 LawnSite Senior Member
    Posts: 304

    first of all, i don't have the customer list so i don't know where his customers are for sure. second, he is going to talk to every customer and have me meet them so that everything would transfer to me. I'm not giving any money without some gaurantee. I was talking to several people and i was thinking about giving him about half now and then the other half about next july or june. And if all the customers stay with me next year i would give him the other 50%, but if not then i would give him a percentage of what accounts i did get next year. That make sense?
     
  9. YoungGun

    YoungGun LawnSite Member
    Posts: 103

    HE not making 50bucks a cut or he would not sell.

    tell him you will give him the first 2 or 3 cuts which is a max of 3000-4500 if he acually makes 50 a cut

    Its like useing his own lie against him
     
  10. inHaliburton

    inHaliburton LawnSite Member
    Posts: 197

    I was "given" 4 accounts by another LCO last year. He wanted to get rid of them because they were hilly and hard on his back. I paid him the money I made on the first 3 cuts.

    In a couple of years, another local cutter who's retiring wants to "give" me his 35 accounts. I told him I woun't take them unless he accepted a fair price.
     

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