Selling accounts - pricing?

Discussion in 'Lawn Mowing' started by maxrep12, Jun 9, 2003.

  1. maxrep12

    maxrep12 LawnSite Member
    Posts: 18

    Just wondering what some of you have charged for accounts that you have sold for lawn cutting. I know that the value varies based on the dollars per hour a lawn brings in and the travel time between lawns.

    I have made a pretty solid commitment to a company to sell my accounts. My route is UNUSUALLY compact. One subdivision I cut in we service aprox. 100 lawns. Quite efficient! Another small sub we cut 45 bite size lawns - string of ten in a row, that kind of set up. I spent a lot of time canvassing these subs and knocking on doors to be able to work in one area all day. This = more profit per hour.

    How many cuts per account do I charge?
     
  2. gogetter

    gogetter Banned
    Posts: 3,256

    These are all on a signed contract?
     
  3. maxrep12

    maxrep12 LawnSite Member
    Posts: 18

    Actually, the 185 accounts are not on contract. I have thought many times about using contracts but have done well without them. The main reason I have opted not to is that I feel like I have been able to talk more home owners into accepting service with out a contract. After a home owner goes a few weeks with the luxury of not doing the cutting themselves, they seem to be hooked for good!
     
  4. Lawn DOG

    Lawn DOG LawnSite Senior Member
    Posts: 276

    How do you sell an account that has no contract?

    That's like saying "here's an empty glass take a drink".

    I understand you are servicing these customers but don't see how you can sell them......
     
  5. nlminc

    nlminc LawnSite Bronze Member
    from GA
    Posts: 1,671

    If the co. taking over provides the same or higher quality of service at the same price. those customers will stay. Why wouldn't they? The seller saved them the aggravation of finding another reliable service provider! Contracts can be broken anyway. If you're close to your customers, they will trust you to leave them in good hands.
    I would say you have a potentially profitable business sale on your plate. Talk to your accountant. How much do you profit or gross from these accounts yearly?

    I sold my account list (without contracts) last fall for 30k and that was for 36 accounts. I ended up getting alot more for the equipment the buying co. decided they wanted also. I could have earned more from the sale. I had two businesses that were fighting over my list. I just came up with the figure and I wanted out fast. I was moving out of state. Money talks.

    What do you want out of it? Talk to an accountant that understands how to price a business.

    I understand where these others feel your accounts are not worth anything based an the fact that they have no contract. But look around.......there are people out there that will buy anything! Drop hints to a few large or growing LCO's in the area and I bet you will have some of them interested. If your accounts are profitable and your route is as tight as you say, you'll have no problem.
     
  6. maxrep12

    maxrep12 LawnSite Member
    Posts: 18

    Were those 36 accounts commercial? I would guess that they were!
     
  7. nlminc

    nlminc LawnSite Bronze Member
    from GA
    Posts: 1,671

    They were all residential.
     
  8. Lawn DOG

    Lawn DOG LawnSite Senior Member
    Posts: 276

    This may be true but as a business professional I would not touch it. I am sure whoever you sold your accounts to had a contract with you. If not what was stopping you from coming back and taking your accounts again. Please don't tell me a hand shake.......
     
  9. nlminc

    nlminc LawnSite Bronze Member
    from GA
    Posts: 1,671

    You are right Lawn Dog. He had his attorney (at his cost) draw up a closing on the business. I was an inc. He researched...for leans, outstanding loans on the equipment and I had none. I was moving 1300 miles away, but still signed a non compete agreement for 5 years at the attorneys advice. There was no gaurentee on the accounts staying with the new owner......his attorney even informed him that I could not gaurantee them! I never said I would. These customers stayed with me brcause of the service and personalized attention I gave them. He understood that had he do the same these customers would be his for a long time to come. Unfortunatly for him, he didn't do that.
    I did have some customers call me afterwards asking if I would take them back. They had given him plenty of chances to correct his mistakes, but he didn't have a clue on running a LCO business. He was in the home building and gen. contracting business.
     
  10. Lawn DOG

    Lawn DOG LawnSite Senior Member
    Posts: 276

    nlminc,
    Thanks for your explanation.
    It makes sense now.
    I hope this dialog helps you (maxrep12).
     

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