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Buying out small fert company

Discussion in 'Pesticide & Herbicide Application' started by MacLawnCo, Nov 20, 2002.

  1. KLR

    KLR LawnSite Member
    from Zone 6
    Posts: 171

    personally, if i were you, i'd pass on this deal. $1700 for 25 active accounts = $68 per account, thats a bit high.

    our typical advertising cost us $50 per account on average.

    plus he has a list of 75 inactive accounts, i question why so many inactive compared to only 25 active??

    with minimum effort and $$$ you could secure 25 accounts on your own.

    my opinion
     
  2. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    The man is really lazy. He told me that if a client wanted him to come back and do spot srays, then he would just drop them:confused: He also said that he hiked the price about 20% last year. I check the numbers, and he is getting arround $4/K. Not too bad IMO.

    I totaly agree that i could get the clients much cheaper on my own. I am in the middle though on that aspect. Kinda sitting the fence now. He will get back with me and i may try to haggle him down. He has wanted out for the last 10 months so he may be willing to negotiate.
     
  3. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    ^
    bump, any new thoughts?
     
  4. bruces

    bruces LawnSite Senior Member
    Posts: 648

    Without knowing what the gross per account is, I don't think that $68 per account is that high. Granted, you might be able to pick up accounts cheaper through your own efforts, but it would take a little while to pick up 25. Here, you are picking up 25 at one time.

    If you buy them and they are profitable accounts, you will make back the $68 by the second application.

    Stictly my opinion, but I don't think it is all that high.

    Try to make a deal to pay part down and balance as you service the customers.
     
  5. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    Bruces,

    that is what i am thinking.

    Approximately 1/3 of his clients pre pay for the year, so he is thinking that he will take his chunk out of that ammount and then the rest who are pay per app will be my money. We will wait and see. He is currently getting contracts from his clients so only time will tell
     
  6. LCC350

    LCC350 LawnSite Member
    Posts: 3

    .......25 accounts.......you've already spent too much time and energy. Also the national estimated average per coustomer is around $60.00 per account. Whats more troubling is that you refer to the progarm for supplying products to coustomers property as, "...crap you dont know much about...", maybe you should first educate yourself on the basics of lawn fertilization before considering this wasted venture. At least for the coustomers sake.
     
  7. Evan528

    Evan528 LawnSite Silver Member
    Posts: 2,144

    I would have to disagree. When I got my pesticide license and added that service to my general liability insurance it only raised my premium 20 dollars per year. The equipment to handle only 25 accounts is not a signifcant purchase either but I very good money maker.
     

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