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Professional advice on buying accounts

Discussion in 'Lawn Mowing' started by ABeautifulCutAboveInc., Jul 13, 2008.

  1. ABeautifulCutAboveInc.

    ABeautifulCutAboveInc. LawnSite Member
    Posts: 118

    I met a gentleman last week that asked me if I was interested in buying 30 accounts and his equipment. I asked why did he want to sell, he said he just wanted out of the business. I called him yesterday and asked to see his gross monthly income on paper to see if it's a profitable business. He said o.k. I'm looking for professional advice for anyone who has experience with buying accounts from somebody. Any professional advice would be greatly appriciated. Thanks.

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    Do you already run a lawn biz?
  3. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    I would pay him maybe a 1/4 of what his annual income from the business would be. Then fair auction value for the equipment. What guarantee do you have that the customers he has won't drop you after you mow 2 times? And to be honest, it's getting later in the season so the amount of income will be much less and again, no guarantee they'll return next season for you service their lawn.

    After all that being said, it might be a small fortune waiting if you can become close with his current customers and they keep you on for the following years.
  4. harrislawncare1

    harrislawncare1 LawnSite Member
    Posts: 46

    Not trying to stab someone in the back, but meet with the clients before buying them as this can insure you if or if not going to have these customers. Let your work get the customers not buying them from someone who is getting out or already made these people
    unhappy. Why pay for something that you can get thru hard work and job well done.That has been my way over the years
  5. Dave_005

    Dave_005 LawnSite Senior Member
    Posts: 359

    i would pay a fair market price for the equipment. but for the accounts i would pay no more then 3 cuts worth of income and ONLY for the accounts who agreed to resign with me. Never Ever pay for accounts blind before meeting and talking with the customers to make sure they will resign with you. otherwise you might end up buying those 30 accounts and only having a 1/3 of them sign with you. buying accounts blind is a good way to LOSE ALOT OF MONEY !
  6. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    Go talk to a lawyer
  7. CGlisson

    CGlisson LawnSite Member
    Posts: 158

    I completely agree with everything said already. I might even take it a step further though. 1/4 of his gross for the price of his business is too high in my opinion.

    I subcontracted 10 lawns for a bigger LCO this year, and only have 2 of them left. I spoke with each client as to why they did not want me to do it, and it was simply because of a poor relationship with the previous LCO and the fact that he didn't tell them ahead of time he was subcontracting the work. In fact, all of the customers I talked to were very happy with the job being done. It was bittersweet... I've since picked up better priced lawns on my own in the same couple streets.

    In other words...buying those customers might just be very expensive advertisement to their neighbors!
  8. johnnywill08

    johnnywill08 LawnSite Senior Member
    from MA z6
    Posts: 372

    consider the fact that its a tough time to start or expand a landscape biz in this economy and esp. with the cost of fuel.......
  9. ABeautifulCutAboveInc.

    ABeautifulCutAboveInc. LawnSite Member
    Posts: 118

    Yes, I do already have a well established lawn biz. I would like to expand to the area his lawns are in. I did plan on meeting with them before any kind of agreement. I plan on feeling his clientel out. If any red flags are seen, I'll walk away from it. If an ageement is made, I plan on signing contracts to protect my investment. I live in central FL, all of these customers are retired. We cut year around here where I live. The grass never stops, it just slows down. Thanks for the replies and advice.
  10. Woody82986

    Woody82986 LawnSite Silver Member
    from DFW, TX
    Posts: 2,128

    I agree with most of what is being said here. Much on the same note I had a question for you guys. A guy approached me about selling me his accounts in a certain area. He wanted $X amount for each lawn. I say, ok, I just need the clients' information so I can take a tour of the properties and meet with the prospective new clients to ensure they will be staying. The guy says no way he is going to show me addresses and phone numbers to the clients before the sale as he doesn't want me to snake them out from under him for nothing. I say, no way am i going to fork over money for an unknown like that. How would you guys handle that? I just can't imagine handing over money for such an unknown like that. Or am I wrong?

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