purchasing accounts

Discussion in 'Lawn Mowing' started by solaras, Jul 25, 2001.

  1. solaras

    solaras LawnSite Member
    Posts: 55

    I was approached by another landscaper who is interested in selling out his accounts. He has approximatly 60 of them. He is looking to get 3 months pay per account. Personally I think he is out of his friggin mind. But I didn't make like I thought so. I told him that I had to talk to my partner and I would get back to him. I was thinking of proposing $100 per account or 150% of the monthly rate. Could someone please offer up some advise. Thank You!!
     
  2. Guido

    Guido LawnSite Silver Member
    Posts: 2,085

    I'm sure someone with more experience in doing this could answer better than I so I'll keep it short. You have to look at it logically and legally. If there are contracts that you take over, and you can easily make your money back in a month, it may be worh it. Make sure legally that you agree on a no compete clause with him saying that he can't take those accounts from you.

    Sorry I can't give you a full answer, but as I said, I'm sure you will get more responses, and mixed ones so you can see both sides. Good Luck and let us know how it turns out for you.
     
  3. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Posts: 2,810

    I sold my business a little over 3 years ago down in Florida. The price was 3 months for the accounts only.
     
  4. solaras

    solaras LawnSite Member
    Posts: 55

    Thats what he is asking for. But my thought is that I pay for Aug, Sept, & Oct. Then guess what, growing season is over. How many of these people are going to drop? What % will I do for free. I'm not getting paid. What % is loyal to this guy and doesn't accept change that well and drops us right away. I would still be obligated to pay for those three months.
     
  5. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Posts: 2,810

    solaras,

    I don't know how "his" business is set up or what kind of work "he" does.

    I do know that "I" billed the same amount each month January-December and "I" did excellent work. So if the purchaser continued to do excellent work (which he did) he'd lose practically nothing and gain $$$ after 3 months...

    You need to take a good look at his business and decide whether or not it's worth it to "you".

    What we did when I sold my business was send a letter to all my customers that said my company was merging with another. I continued to stay on as an employee until the transition smoothed out nicely (which was about a month).

    Good luck...
     
  6. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Tom is right on target

    on the east coast most average sales are 2 months for resi's & 3 for comm ...... work the yards atleast 2 weeks ...... meet ALL the people ........ get his letter ...... you have a letter ....... get a non compete statement from him signed by a notary (so he doesn't just get em back)

    check his books ....... how long has he had them ..... do they continue in winter (most do ..... if he has done them a few years) .... what they are paying for is 40-42 cuts a year

    most guys sell out in april-may after the nice winter ..... so check that out ..... why is he selling ??? ....

    we offered 3 months last spring for a 60 pack ($$ in 72 hrs).....nice gated golf club community ..... all tucked together ....... they were sweet .....(he'd had em most of em over 6 years .... fat st aug .... right on Bay Tree ..overlooking putting greens & fairways)..... but the guy wanted 6 months firm .... sure he had lot's of tire kickers ...... so I offered him a job to go with .......run a crew ..... benefits ...... vaca ......truck .....but he wanted that big cash ......he's still mowing em

    good luck :-.
     
  7. solaras

    solaras LawnSite Member
    Posts: 55

    Hey, Thx Steve, that is real good advice. I think we may offer him 2 months for the accounts. 3 just seems a little unreasonable considering the risks.
     
  8. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Posts: 2,810

    Thank you too, Steve... for acknowledging my post

    solaras...

    After you have put your blood, sweat and tears into building your business would you be happy to get 2 months? 3 months is peanuts. Something to think about...

    Yes there is risk but if you do things right you will minimize the risk greatly.

    The guy I sold my business to doubled his business that year and added on to it for the last 2 years... selling it a couple of months ago for $100,000.

    Later..
     
  9. solaras

    solaras LawnSite Member
    Posts: 55

    I completely understand that. But, our marketing efforts are paying off just fine. This would just be additional business and my offer would be a take it or leave it. Plus, who could guarantee what the customer may do? Nobody! You can take all the right steps to ensure that the risks are minimal with the seller of the business, but ultimatly, it is the customer you're providing service for that makes the final choice.
     
  10. SLS

    SLS LawnSite Bronze Member
    from Mars
    Posts: 1,540

    There was an interesting thread about this very same subject last week. Lots of varied, and thoughtful, replies.

    CLICK HERE to check it out!

    Good luck to you. :)
     

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