Buying cusotmers- please help!

Discussion in 'Business Operations' started by sixpixels, Sep 19, 2010.

  1. sixpixels

    sixpixels LawnSite Member
    from NJ
    Posts: 29

    Hey Guys,
    So i came accross an oppurtunity to buy equipment and customers from a guy who's lokoing to get out of the buisness. I already have a landscaping co and figure this would be a great add on of customers. I need some feedback/aadvice on the value or what i should pay for the customers.
    here are the details-
    -40 grass cutting accounts- weekly and bi weekly. All properties are within a 10 mile radius
    -The guy im buying them from has only been in business for 2 yrs..so his oldest customer is 2 yrs if that.
    -The guy is lokoing to get 8-9K for the customers only which to me is ridiculous being his agreement/contracts with these customers are as of right now for this season only...and nothing stating any type of penalty if they decide to cancel. PLUS how do you put a high price on somethign you dont physically own?

    Ive sene past post about paying him 3-4 weeks services per lawn, or 32 weeks of service or 5-10% of the annual income BUT again...there not even signed on for next season.
    Im open to any and all advice...
     
  2. Columbia Care

    Columbia Care LawnSite Member
    Posts: 158

    I would tell the guy you would be willing to pay him for 2 months revenue from his customers. The clock would not start until next years cutting season. This way you can see if the customer will allow you to service their property. If they don't, you would not pay the guy for the lead.
     
  3. seabee24

    seabee24 LawnSite Senior Member
    Posts: 619

    Depends on a lot more, what's the estimated profitability? How big are these accounts, what's the revenue?

    Odds are he's not going to drop his price much unless he gets desperate, and let's face it, for you to pick up 40 new accounts could take more than a full year. So if these accou ts brought in 60,000 for the year, then paying 10-20,000 wouldn't be out of the question. But no sale is going to be 100% perfect or 100% gaurrentee. That's just the risk you take. I would be more likely to pay more but have him offer a gaurrentee and possibly his help for next spring for signing them and managing them for a month
    Posted via Mobile Device
     
  4. sixpixels

    sixpixels LawnSite Member
    from NJ
    Posts: 29

    Thx for the help.
    This guy selling the properties has 39 total and they bring in about 3k per month.Most of them are bi weekly. The guy wants like 9k for them and i told him he was crazy. I offered him $3500 max...

    waiting on his reply
     
  5. Marcos

    Marcos LawnSite Gold Member
    Posts: 3,720

    Learn how to spell, or use the yellow 'spell check' button below.
    Doing anything otherwise makes you look quite unprofessional, especially while seeking advice.
     
  6. jdutcher003

    jdutcher003 LawnSite Member
    Posts: 181

    i purchased some lawns from a guy who was going out of business not to long ago. the amount i paid was equal to about 4 weeks of mowings for those customers.
     
  7. sixpixels

    sixpixels LawnSite Member
    from NJ
    Posts: 29

    Marcos,
    I came hear for advice on buying accounts, not a spelling and grammer course.
    Im typing fast because I am at my full time job and shouldnt be on the internet during company time so excuse my typos
     
  8. sixpixels

    sixpixels LawnSite Member
    from NJ
    Posts: 29

    Marcos,
    I came here for advice on buying accounts, not a spelling and grammer course.
    I'm typing fast because I am at my full time job and shouldn't be on the internet during company time so excuse my typos
     
  9. seabee24

    seabee24 LawnSite Senior Member
    Posts: 619

    39 accounts at 3 k per month = 76 dollars per customer average.

    so if its almost a 50/50 mix thats 19 full time, 20 bi weekly = about 116 total cuts for the month (thats assumign a 50% mix) that means that hes charging an average of 26 bucks per account.

    Now if 75% are bi weekly 29 bi and 10 weekly = 98 cuts - average price per cut is 30 bucks

    so from there you have to figure out your cost to service these properties. to see if that 30 bucks will make you money, and exactly how much profit is in it for you
     
  10. AA+ landscaping

    AA+ landscaping LawnSite Member
    Posts: 208

    If you are interest I got 35 new accounts in the spring for half of that. It was very easy just took a little bit time. You are not in my town so it will not effect me. I would like to see if it would work in a different area.
     

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