Purchasing price of clients?

Discussion in 'Starting a Lawn Care Business' started by DuckDuckGoose, Feb 18, 2009.

  1. DuckDuckGoose

    DuckDuckGoose LawnSite Member
    Posts: 8

    There's a guy trying to sell 21 clients with a yearly gross of $37,280. He's asking $21,000 for them but there are no written contracts, only verbal agreements. All but two are residential. Are the clients worth that much?
     
  2. IntegrityGuy

    IntegrityGuy LawnSite Senior Member
    Posts: 781

    Ask if he cares if you have all of his customers sign contracts and the ones that dont sign you dont want.
     
  3. DuckDuckGoose

    DuckDuckGoose LawnSite Member
    Posts: 8

    Thats a good idea. Does the price of $1000 a client sound reasonable or is that too much?
     
  4. Fife Lawn&Lane

    Fife Lawn&Lane LawnSite Member
    Posts: 97

    Can you afford to service those clients for the $16280 for the first year? ($37280-$21000=$16280) or $775/client average.
    His pricing works out to $1775/client I would be looking more in the 25-30% of total / client than his 56%. You also need to convert those to written contracts with you.
    Try countering his asking price with something like a %. So for every contract that signs with you pay him a % of the total seasonal amount.
     
  5. lawnwizards

    lawnwizards LawnSite Silver Member
    Posts: 2,434

    i'd give him 3k if they signed an agreement and they stayed the whole year. also have a clause to if they cancel you get a prorated portion back. goodluck. just think what 21000 in advertising would get you. a whole heck of a lot more than 21 customers.
     
  6. burge19

    burge19 LawnSite Member
    Posts: 124

    Yeah i agree with lawn wizard if you advertised with that much money it would get you a lot more. Plus i think that seems way high for only 21 accounts
     
  7. Woody82986

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

    I don't think they are worth near that much... and especially without written contracts. Without a contract on them and a contract from each of them okaying the switch, I wouldn't pay more than $100 each for them.
     
  8. Dave_005

    Dave_005 LawnSite Senior Member
    Posts: 359

    I would pay ONLY the amount of 3 cuts and ONLY for the ones who signed with me. if he doesnt have Contracts for these accounts then what are you going to pay for ? $21,000 for just 21 accounts that may go else where anyway ?
     
  9. nickroqs

    nickroqs LawnSite Member
    from NJ
    Posts: 37

    Generally I don't like buying accounts, as there aren't really any guarantees that come with it. Money like that is probably better suited on advertising.
     
  10. Rayholio

    Rayholio LawnSite Bronze Member
    Posts: 1,461

    The REAL question is.. could you spend $1000 on advertizing and get 1 customer?? I think so... I think $100-$300 per customer is a more reasonable number.
     

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