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Buying / Selling Accounts

Discussion in 'Lawn Mowing' started by CLPS, May 9, 2008.

  1. CLPS

    CLPS LawnSite Member
    from Midwest
    Posts: 28

    I have been talking to two different lawncare businesses this year about buying some accounts. They are both giving up mowing, one is moving towards landscaping only and the other is selling everything. The first guy has about 10 accounts and the second has 30 to 40 available, nothing is under contract.

    My question is what is an accurate number to put on an account? I have never bought / sold any accounts before, but have always thought that what that account pays over a season would be a pretty good estimate of its value. For example if a mowing account pays (gross) $1000 per season, that is how much you should be able to sell it for. Does this seem high? (considering no contracts, 90% residential) They haven't given me any numbers yet but I'm just looking for a ballpark range to go into it with. Anyone have any expirience with this? Thanks
  2. Toad

    Toad LawnSite Senior Member
    Posts: 443

    I dont think there is anything set in stone for this kind of transaction. I personally would not want to make a proffit off a new client for the first year. I would buy with the intent to make some return off of these lawns. If I had to (buy clients) I would go half of the expected gross for the year, this will give you cushin in the event of a loss or other misshaps. my 2c
  3. lawnbandit

    lawnbandit LawnSite Member
    Posts: 45

    are you two joking!!that crazy talk..
  4. F3Nelson

    F3Nelson LawnSite Member
    Posts: 119

    Crazy indeed!

    I have bought out 4 companies (3 last time I had the business, and just recently acquired another one) I am not paying anyone a full or half season worth of mowing.
  5. CLPS

    CLPS LawnSite Member
    from Midwest
    Posts: 28

    Thanks for the input.

    Just wondering how you worked yours out F3Nelson. Did you base it on some percentage of their gross income or was it just random?

    Anyone else got any expirience with this? I'm lost
  6. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    When I bought my accounts, the seller and I agreed on 7 weeks worth of cuts as the price. I've seen other disscusions on this site, were 6-8 weeks was an average amount. I'd never pay a full years worth. Who would want to cut a lawn for free all year long?
  7. JohnnyRoyale

    JohnnyRoyale LawnSite Senior Member
    Posts: 616

    10 cents on the dollar and go up to 11 cents from there. I agree-someones smoking something stinky here.
  8. chesterlawn

    chesterlawn LawnSite Senior Member
    Posts: 708

    I would offer 10% . And I would pay the 10% after each month of cutting, whos to say the customers might move or get a different landscaper.
  9. CLPS

    CLPS LawnSite Member
    from Midwest
    Posts: 28

    Thanks guys, just looking for a starting point and think I found one. I think I can work something out where I don't have to pay up front.

    Anyone else buy or sell any accounts recently? Would you pay more for commercial?
  10. ALarsh

    ALarsh LawnSite Silver Member
    from Midwest
    Posts: 2,412

    I bought out a guy here. I paid 9% gross income for one year, no equipment.

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