I bought the business

Discussion in 'Lawn Mowing' started by Port City Lawncare, Jul 15, 2003.

  1. Port City Lawncare

    Port City Lawncare LawnSite Member
    from Alabama
    Posts: 75

    Here's the problem, and feel free to advise here. I admit, it was really nice to gain 25 accts so fast, the problem lies with the accounts, not so much poor customers, but the jobs are underbid by $40-50 on 85% of the accounts. I realize this transition period can be very tricky, especially since most of the clients are over 55 yrs old, but what strategy should I use to approach my customers once the spring rolls back around.

    Also, what ways would I suggest up-sales w/out pointing out work that needs to be done, (that should've been done before) - work they're not paying for currently. The last thing I need is spending an extra 30 minutes in the yard.
  2. TLS

    TLS LawnSite Fanatic
    Posts: 7,937

    Or per month?

    I'll assume your talking about lawnmowing, right?

    Did you not check out all these properties prior to purchasing the accounts?

    What type of area is it? Wealthy, poor, retired, etc?

    Do you have lawns of your own? This way you could jack up the cheapies, and if you loose them, no biggie?

    You have to look before you leap.
  3. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Posts: 4,771

    No doubt, underbid $40-$50 what? Did you give him full asking price? I would have given him 15% of what he was asking because you stand a good chance to loose those 85% of accounts that are under bidded.
  4. Port City Lawncare

    Port City Lawncare LawnSite Member
    from Alabama
    Posts: 75

    We offered less, but we gained equipment along with the accounts. It was definitley a good deal but like I said, the accounts that are $25 dollar accounts are taking us an hour sometime 1.20 to cut. I bid at 45 per hour, so obviously I'm losing my arse on those accounts.
  5. Catmann

    Catmann LawnSite Member
    Posts: 93

    I think you are loosing your arse at $45 per hour, but then again that is why we got out of mowing years ago! No offense intended.

    I would not wait on this issue. I would use the first few visits to politely introduce yourself and then mention honestly that you feel the rate is not up to your standards. You will honor it for the remainder of the season, but next year it will be XXX.XX. Then do a great job the rest of the year and many will probably keep you on.

    I am always surprised at how much money people will spend if you smooth it out and and not force it. Honesty and sincerity are the keys. You will always loose some to price, but those are usually the first people to complain as well! So goooooodbye to them!
  6. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    Did you not look at the accounts and the books before you paid for them?

    I assume you have some experience since you say you quote at $45 per hour ???

    You bought it and accepted the terms with the customers. All you can do is raise prices and hope you keep something. Consider it money lost. You will have a real hard time turning a profit from this investment.
  7. Lawn Tek

    Lawn Tek LawnSite Senior Member
    from u s a
    Posts: 457

    Good deal , yea for him . Takin " us " 1.2 .hours , Two people for 25.00 ? Your now bleeding from a major artery , stop the bleeding fast .
  8. crazygator

    crazygator LawnSite Bronze Member
    Posts: 1,048

    Help us out a little more please.

    How large (as in square feet) are these that are priced at $25 that take you 1 hour plus?

    Is the time killer in actual mowing, or trimming?

    What are you using at these properties for equipment?
  9. heygrassman

    heygrassman LawnSite Senior Member
    Posts: 509

    One option is to take the price up next year 20% ($25 to $30) and see if there is something that you can throw in (i.e. refferals for moeny back or discounts, free spring pre-em treatment, 1/2 flat spring color, etc) to try to ease the pain to the customer.

    I would bet if you go up greater than 5% to 10% without some sort of value added, you could be in trouble with these accounts. If you paid 5K and got 5K worth the equipment, you have not much to lose. If you paid 7K and got 5K worth the equipment.. that could be a problem if they walk.

    Good Luck!
  10. Rustic Goat

    Rustic Goat LawnSite Bronze Member
    Posts: 1,194

    Unless you gained a large warehouse full of a lot of really good equipment in this deal, sounds like you're blowin' smoke up between our and you're own bleacher cushions. About this being such a good deal that is.

    What you're after is not wanting to write these accounts off as a loss, and not wanting to lose the accounts now and/or next season, right?

    Set up a lone crewman, or hire one to handle these accounts for this season. Just do the services they're already paying for and used to. This crewman can do other things too, but primary for now would be these accounts.
    If what they've been getting is full lawn service, well, your bad.

    Put together an advertising brochure, showing what your company can do, and for how much. Present this to these accounts, personally (not mailed) if you don't want to lose them. Use this to either get the pricing right or to upgrade the account.
    You have to realize they are not all going to take this bit of bait, be prepared.

    Another choice would be to find another LCO to sell these accounts to. If your main positive in this acquisition was the equipment, you should be able to sell them for not too much of a profit to rid yourself of them before the end of the season, and/or before they really start costing you.

    Be wide awake and in control of all your senses before you do something like this again. Definitely write this down in your diary, 'The day I bought a dog, then realized I had to feed it too!' :eek:

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