First REAL burn

Discussion in 'Business Operations' started by Kurt, Oct 29, 2001.

  1. Kurt

    Kurt LawnSite Member
    Posts: 14

    I am a new (six months) one person operation in Florida and had purchased an account for $2,600. I worked at the account for three months now and just got a call that they had decided to use someone else. Basically I lost $2,600.
    It was strange how I paid cash up front and after exactly three months (what I paid) I lost the account.
    There is something very suspicious, but what can I do?
    The seller can say they had nothing to do with the homeowner's decision.
    The homer can say they have a right to do whatever they want.
    For future references, since being burned so many times, I will NEVER buy someone's accounts again.
    I'm learning REAL fast NOT to trust anyone.
    I also always seem to lose to the NICE people. The ask for all the extra.
    I had always learned in business to do the extra for people.
    When I do, they take advantage and THEN fire me. It's already happened quite a few times. I am NEVER going to GIVE my service away. It's too bad because I want to earn their business, but it has NEVER proven to work.
    In six month of business, I grew to $2,500 a month billing back down to $700. Is it because it's fall?
    Any suggestions, before I bail out of this industry?
  2. Guido

    Guido LawnSite Silver Member
    Posts: 2,085

    and learned your lesson. Sometimes you have to learn the hard way I guess, too bad it was in the thousands category!

    Read the thread on no compete contracts and clauses and you may get some ideas if you ever decide to do anything like this again.

    So am I to assume youhad no contract for the sale of this account? Thats a real big no no man! You weren't guranteed anything at all, your lucky that you got paid the first 3 times!

    Sorry to hear your bad news, but it may be worth it as long as you learn something from it.
  3. Island Lawn

    Island Lawn LawnSite Senior Member
    Posts: 632

    I gotta credit you with sharing the experience.
    Maybe you'll teach a few.

    I think "Burns" could become it's own thread! If not, board!

    I KNOW everybody has a "burn" story!
  4. osc

    osc LawnSite Senior Member
    Posts: 502

    Customer base is an intangible item that only becomes tangible if you have a signed contract. With the customer.
  5. Kurt

    Kurt LawnSite Member
    Posts: 14

    How do you inforce this contract when you are small. I started with them and NOW I will go back to them. If no sign, No job.
  6. strickdad

    strickdad LawnSite Senior Member
    Posts: 544

    i got a sugg. dont buy any accounts (not trying to be a smart a** but) there is entirely to much work out there to have to buy work!! you see this makes no sense what so ever..
  7. Kurt

    Kurt LawnSite Member
    Posts: 14

    Why does this make NO sense to you?
    There IS plenty of work, but it take time, *time is money, to get these accounts. I believe in a grass roots marketing campign, but it takes many hours just to get one account. It's so much easier to pay money for the account. It's just too bad I had a bad experience because of someone else's and MY mistake.
  8. strickdad

    strickdad LawnSite Senior Member
    Posts: 544

    kurt , i think you answered your on question . you mad a mistake right?? (least thats what you said in your post) i will try to explain what i meant, by "it makes no sense to me". example. if you were to go into public work and go apply for a regular job say wallmart, do you think you should have to pay a fee (say 2600.00 dollars ) to work there? i dont. apparently you are new in this biz. and you are hungery for more right? heres how to get it. good work ethics,( do exactly what you say you are gonna do) honesty ( dont tell people something you cant come thru on) detail ( pay attention to detail, make your work is the best it can be, go the extra mile to ensure satisfaction) bottom line is this; good work sells itself!! lets take eric or ray (kirbys lawn) for example they both do super jobs and i bet neither one has ever bought an account or if so it has been a long time since they have. needless to say they dont have to now. this is because there work sells itself. both of these guys are expensive to hire and rightfully so.. (again quality cost..) both of them have plenty of work and they dont have to buy it , there quailty of work takes it.. (ray, eric , chime in if im out of line here) so kurt in closing if you do high quality work, it will get you more work , and so on and so on
  9. brentsawyer

    brentsawyer LawnSite Senior Member
    Posts: 663

    Anyone who puts up cash first before being paid is a sucker. No customer will pay you hundreds of dollars before setting foot on their lawn, although I do have one who pays one-two months ahead. I have never sold only bought accounts. The way I do it and highly recommend is to tell the seller that you want to be fair and want to protect the both of you and that you will pay half of cash flow to him until the bill is paid in full. Also, if the customer moves over the offseason, half of purchase price is due back to you. Only fair. No ifs, ands, or buts. Don't do business any other way. If you pay upfront, how are you to know that the account is not somewhat loyal or won't ditch you like you got ditched. This way, you can't be screwed and neither can the seller. This gives you cash flow continously on a profitable basis from the get go. Most importantly, If buying accounts, put yourself in your customers shoes. They didn't ask for a new service, but they have one. ALL you can do is your absolute best and then some for the first year. They will be happy, if not, you don't want them.
  10. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Down the road ...... at sometime ...... I hope someone "buys accounts" else do we get out of this business when ready to fish everyday ???...I'd have to say service business are bought n sold everyday salons .....bars ......bowling alley's ......lawn care ....etc. the #1 item we sell is SERVICE ....after that it's COMPETENCE. RELIABILITY & APPEARANCE

    Buying "Contracts" won't ensure you can keep em ......if I have a contract with x lawn service n they sell to y lawn service .....n y lawn service does not do what I want or how I want it ......I'll drop em ....sue me!

    Accounts being sold down here is common place .....soooo many come down here to work .....try it .....can't handle the heat or competition ...others just can't keep up with their own commitment .....n get overwhelm ......than un reliable they sell ...those you DON"T Buy .....unless they been doing em for atleast 3-4 years

    NEVER BUY Commercial .....UNLESS you are buying the whole bag ....all accounts n the Name ....operate under the Name for a year than ....send Notice of Name change (that's why its good to have a Business Name NOT related to one's own .......someday you'll want to retire n sell what you have work hard to build ....Exception to this is a family business to be passed on to one' s own children)

    Resi's is common fore 2 months em for 1 month let the guy get paid normal ...from clients them with the other guy .....have verbal & written notice sent from the Seller ....... than pay for the next 1 month ...

    Kurt I'd say you learn alot n will be a better owner from it ...Good Luck

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