mowing accounts Q

Discussion in 'Starting a Lawn Care Business' started by i use great dane, Jul 10, 2006.

  1. i use great dane

    i use great dane LawnSite Member
    Posts: 5

    this year i bega working with my cousin doing lawncare with him.. well somethings happened and hes now looking to sell the business im just wondering what the going rate per account would usually go for.. ive heard the cost of 2 cuts or at the most a month of cuts but my cousin seems to think its a half a year of cuts.. who's in the wrong?
     
  2. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    I would not pay 1/2 a year (or even buy at all) but I would be happy to sell at 1/2 a year so maybe you both are right for yous??:)

    But no he wants too much

    A true business plan would be happy with 10% profit after ALL expenses
    That means that your would have to work 10 years to profit what an account brings in. So at 1/2 a year up front you would be working for nothing (as far as profit) for around 5 years.
    This does not mean you would not be paid for your work, just that the business would not profit!
     
  3. i use great dane

    i use great dane LawnSite Member
    Posts: 5

    so is 2 cuts a good amount per account? or what is the usual going rate?
     
  4. i use great dane

    i use great dane LawnSite Member
    Posts: 5

    i guess i dont know what all that means
     
  5. AAELI

    AAELI LawnSite Senior Member
    Posts: 362

    What is to stop you from asking the customers to switch? He is quitting anyway. Does he have a contract that ties them to him? If not, How can you sell something you don't own? This business is a relationship business and if he is severing that relationship then you need to make new ones with the customers in order to make them your own.
     
  6. Diablo

    Diablo LawnSite Member
    Posts: 75

    2 cuts is pretty reasonable, I would even pay for a month if I knew the customers were ok with the switch. 1/2 a year is ridiculous. Be careful buying contracts from a small timer though, I bought about 15 or so years ago when I started and mowed them all for a month without talking to them, long story short I only kept two, the rest had all cancelled with the guy already, they just didnt mind the free cuts. Good luck.:usflag:
     
  7. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    OUCH!!..... buy the way I like the helmet
     
  8. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Find out what it costs to do the work-- He needs to show you his books and tax returns, and include what you pay yourself. what is left is profit That is the only thing you are buying, PROFIT. If there is 10 dollars per month profit and the account pays $200 per month than there is 5% profit,
    If there is 25$ per month than 12%. Lets say $20 per month profit and $200 income -- for every month you pay him for the account you are going to work that account 10 months to recover what you payed. - so if you pay 6 months you will work 60 months or 5 years to break even. See it now

    Even 2 months is 20 months of work to break even. And this is working full years-- only summer, it will be many years before you make a profit.. but you cousin is sitting pretty
    That is why most say do not buy accounts.
     
  9. i use great dane

    i use great dane LawnSite Member
    Posts: 5

    thank you all very much and i have been on the phone all day planning to start fresh next year with my own company
     
  10. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Good decision
     

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