ok, now what?

Discussion in 'Lawn Mowing' started by southerngent, Jan 7, 2003.

  1. southerngent

    southerngent LawnSite Member
    Posts: 58

    I have been approached by another LCO about buying their accounts. The dealer I bought my mower from recommended me to him. I'm just getting started and have no accounts as of yet, I go to give 2 estimates tomorrow.

    These are 20 accounts on the beach that are on yearly contracts.He has had them for three years. Just mow, blow and go.They only generate an avg. of $60 each per month, but are very close to each other. He will sign a no compete clause and will go with me to the accounts for introduction. He is asking for three months , but is very flexible on arrangements. So, that's $60x3=$180 x20 accts. =$3620. 20 accts. = $14400 per year. So he's asking approx. 25%.

    If I go to the accounts with the guy, should I ask the people to sign year contracts while we're there and only pay the three month amount on those?

    Any advice would be appreciated....thanks in advance
     
  2. 1grnlwn

    1grnlwn LawnSite Bronze Member
    Posts: 1,261

    That's a tough one. Sounds like a low price to me. $15 a cut then give 25% away? $3000 would by a lot of advertising. Plus a new account can be priced at your rate not someone elses. Guess you might raise price 10% and only pay on the ones that stay. Good luck.

    Mark
     
  3. southerngent

    southerngent LawnSite Member
    Posts: 58

    Thanks Mark. Yup, that's about $15 per cut, but here in Fl. that's about right for a small lawn...
     
  4. Mowing Freak

    Mowing Freak LawnSite Senior Member
    from S.E. Ks
    Posts: 459

    One person said in an earlier thread that you should pay no more than one months worth of income off those lawns. They suggested half upfront, the previous LCO goes with you and introduce's you to them and explains they are quitting and you are taking over, and sign a no compete clause with the understanding he will be getting the other half a few weeks later if all customers stay with you. If you loose a few, then he will only get a percentage of whats left. This way, if you loose 1 or 2 as they don't like how you mow or for whatever reason, then you aren't paying for something your not getting. Example: lawns cost $2000, you give him $1000, half of them drop you, you only pay him $500 for the other part. As said earlier, the extra money will pay for a lot of advertising. Good luck!
     
  5. Clay

    Clay LawnSite Member
    Posts: 236

    Southergent,

    If you want to jump start your business, I can think of no better way!!!! It's a funny thing, but the more business you have, the more you get... it's always feast or phamon... :)

    He should take you with him as he does the accounts for at least two weeks... you can then try to duplicate his work and days of service as if he was still doing it... (people don't like change) But if they have seen you helping him, and receive a letter saying that you have already serviced the yard and will keep everything the same, then they will be more inclined to give you a chance.

    I have sold 8 landscape businesses in 12 years with over 500 commercial and residential accounts and only lost one customer due to the transfer.... I sold them for 6 months basic monthly service fee plus equipment cost.... so your price is good.... but make sure you go with him and check out how long it takes to do each account and make notes on their likes and dislikes... I made a tape for one of my business purchasers that he put in the truck and told the directions to each account and the specifics so he could listen as he worked.... :)

    Anyway, I could write for quite a while about this subject so if you want, send me an e-mail and I will send you my number if you have questions....

    Good Luck, Clay clayvaughn@hotmail.com
     
  6. C4chris70

    C4chris70 LawnSite Senior Member
    Posts: 499

    In Florida the average lawn (at least in my area) goes between $60-$75 per month. The going rate for selling accounts is about three months of income per account. It seems like the price is in the ball park to me. As far as what mowing freak said about only paying for the accounts that stay with you is great if you could get the seller to agree to it. Personally I wouldn't agree to it if I were the seller because I should not be penalized because a client doesn't like the way you maintain their yard. My advice would be to talk to the clients, find out what they expect, be honest about what you can provide, and do your best. Good luck!
     
  7. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Acually it's $17.14 per cut (42 cuts per year ...n if they have no irragation it might be more like 36 cuts per year) .... either way the norm down here is 2 months for resi .... 3 months comm

    Not to be negative .... BUT I don't think you will get ANY one to sign a contract until they see the work you perform or you have references to send their way to check out your past work ability

    So that being said ....when buying accounts ...your only paying for the opportunity to show your work .... let them judge to continue (then sign a contract maybe say the first of April) ....This is an terrible time of year to buy accounts ....based on the fact they only see you every other week

    I suggest you cut em with him .... meet ALL the customers face to face with him ....then the 1st month you cut let the payments go to him ....than you only have to come up with 1 month $ to pay off the balance ....good luck
     
  8. Doogiegh

    Doogiegh LawnSite Senior Member
    Posts: 871

    Maybe this guys got the best route going or something but I couldn't think of buying a route.. WHY?

    Can't you run your OWN ad in the local paper and get your OWN customers by yourself? Are things that cut-throat in your area that you can't scrap up 15 customers in your first year on your own?

    I figure if it is 20 accounts, heck, you can cut them all in 2 days doing only 10 per day, and these sound small. I'm a one man operation and I can knock off 13-14 in one day and I'm just getting faster and faster each time out. And my largest pieces of equipment is a 32" Metro! If I had a 52 for my LARGEST accounts, I could get done that much quicker.....

    So I dunno, but I wouldn't be buying someone elses route, that's for sure.. Take on all the debt, etc.. when you can get customers on your own I would think.

    Gary
     
  9. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    yea whats up in fla.? u guys workin for room and board or what? i had a lawyers office, husband and wife settup. bot were attorneys, both drove mercedes with fla. plates. i got the acct from a friend who was goin out of business. i was cutting the house, and office, for $45 combined. then they asked me to trim some shrubbery at the house, jumped out of their socks when i told them how much. you mean, its extra? damn right i said! then the poop hit the fan. they said i was screwin them to begin with, in fla. the guys do the lawn, and trim the shrubbery "every few weeks", all for $15. now, they do it themselves
     
  10. Boy the numbers are flying in your head already.

    $3600 for $14k

    $1500 tops and those are low end accounts that already show you they offer no more income from.
     

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