Buying equipment and accounts from another company

Discussion in 'Lawn Mowing' started by Drew Gemma, Oct 31, 2004.

  1. Drew Gemma

    Drew Gemma LawnSite Bronze Member
    Posts: 1,510

    I am buying a few pieces of equipment a trailer and truck. He also has 35 accounts and I am wanting 30 of them. These 30 fit into my current route and all average the dolar a min. rule. I know there not all five star customers I am sure some are gonna be a pain. So how do I pay for the accounts what do I need to do to cover my rear what to look out for. Plan on sending out a letter to his customers sayiong who I am what is going on describing my degree expirence and current clients plus what I offer. For many of these clients my service will be an improvement. Thought suggestions help please. This is a big move for me. Thanks
  2. Greenservice

    Greenservice LawnSite Member
    Posts: 76

    I got started in business by buying 22 accounts from my old boss who was relocating out-of-state. I paid him 50% of what he made on each account the previous year. I didn't know what the general rule was, but a couple of people I asked about it said it was a fair deal. I had the advantage of already knowing the customers personally, so it was not a problem to make back my money in the first season. However, even though I was a long-time employee and friend, he still stuck me with a couple of deadbeats that I got rid of after the first year because they were more trouble than they were worth. I had never seen his books before the sale and didn't know what I was in for with them. All in all it worked out for me. It's always a risk.
  3. grassworks

    grassworks LawnSite Member
    Posts: 134

    In my previous experiences , Customers don't like to be bought or think they have been SOLD .Customers want to choose . Since they have little say in the decision some are resentful and from the start are just looking for problems. Even if your work is superior expect to lose some of them ...
  4. kickin sum grass

    kickin sum grass LawnSite Senior Member
    Posts: 628

    Also ask the other guy to send out a friendly letter saying that you will be taking over the accounts for him. Don't use negatives like you have been sold to xyz company. They don't need to know that but with him explaining that and then you sending a follow up letter a little later before season starts saying that you are excited to take over where the other guy left off etc etc etc....

    I did this for a guy last year. I down sized by about 20 accounts or so. I sent out a letter saying JOE was taking over these mowing accounts next year and then JOE followed up later. He kept 100% and will do so next year as well. I never told the customers they were sold, just somebody else is going to service them as I could not. I gave a great recommendation for JOE and I beleive this helps.

    Good luck to you,
  5. mastercare

    mastercare LawnSite Senior Member
    Posts: 289

    I sold some accounts awhile back (not knowing I was going to be getting BACK into the business).

    Here's how we did it: We came up with how much I wanted for each account. I figued a total. I got half of the money up front and the other half I got based on the $$ percentage of jobs he kept. He ended up keepin about 80% of my accounts, so I got 90% of the total price I wanted. I knew I was getting paid, he knew that his rear was covered if my customers didn't use him. Win/win.

    We put together a letter in the fall, which we wrote together, and both signed. Simply stating that I was moving towards a new career (graduated from college) and have arranged for a good friend/employer to service their accounts "to ensure a smooth transition" This new company will be contacting you in Feb-March to give you more details. We sent out the letter, he picked up new accounts, I got paid, everyone's happy.
  6. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    WOW!! No Double WOW!! You got reamed then because the going rate is between 5%-10% in nearly every case.
  7. JustMowIt

    JustMowIt LawnSite Senior Member
    Posts: 367

    We have bought accounts on 3 occasions and there were big surprises the first 2 times! You really never know exactly what you are buying (i.e. what has the current co. allowed the customer to do (slow pay, excessive skips, watch while they mow, etc.). We discovered all the small hidden details as you begin to service the account (oh by the way, Ms. Jones likes to talk for 30 minutes to the crew every time they mow & she pays 3 weeks late every month because she is on a fixed income & her little dog runs out the gate whenever it cracks open!)

    The last time we purchased accounts we agreed to pay $100 for any of his customers who contacted us & agreed to our terms (i.e. credit card after each mow, no side deals, explained all policies about pets, gates,etc....). We signed up about 80% of his customer base after he mailed out his letter. This way these are our customers, not customers that we inherited all the previous companies bad decisions.

    This is our experience.....good luck! :waving:
  8. tinman

    tinman LawnSite Bronze Member
    from ga
    Posts: 1,348

    Agree with Justmowit. I bought some equipment from a friend & he wanted to sell his customers. But I did not really want any of them cause they were not "MY" customers. So I agreed on a fair price for the equipment & did not figure any extra for the few customers. Glads I did not as 95 % were the biggest PITA's I have ever had & the worst yards too. About 2 were good clients but the rest I wish I had never met!
  9. DuallyVette

    DuallyVette LawnSite Gold Member
    Posts: 3,165

    If you would pay 50% of the annual take...just offer that to all the houses in a neighborhood. You should be broke in a couple of months. IMHO
  10. ICE

    ICE LawnSite Member
    Posts: 148

    I actually just talked to a friend of mine in the biz right down the road from me. I asked how he did this year, and he said great, they are still mowing and had fall cleanups out the wazoo yet. He runs two crews, a two man and a three man crew.
    He asked me, and I said, well, my two customers want me back for next season and that I hope next year will turn a better profit then this year (being my first year and all).
    He then told me to drop of some of my biz cards to him as he will be downsizing for next year. He told me that it just got to crazy this year and that he definately wanted to slow down for next year. He also runs another biz that takes off around August and he said it is like working two full time jobs. I just have to get with him to make sure that the customers that he is giving to me are not going to be at opposite ends of the state!! :cry: I'll keep ya'll posted on that! LOL


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