so what's the standard for buying accounts?

Discussion in 'Lawn Mowing' started by grass disaster, Apr 24, 2008.

  1. grass disaster

    grass disaster LawnSite Silver Member
    Posts: 2,583

    lco is looking to get out of the business. he said his other business is expanding(concrete)


    he has about 8 hours worth of work. a mix of smaller town homes and a few residential properties. most all of the accounts are in a town 15 min away from me.

    he showed me some prices and amount of time needed for each account. he didn't show me the propertied yet. he said he wants to figure out the business side of it before he shows them to me.

    his rated seemed to be a little lower than what i am at but it could be a nice addition to my part time company.

    he's asking for 4 mowing's. i think this may be too high. it equals out to about 16% (25 cut growing season)

    last year i paid 10% for some other accounts


    so whats the standard for buying accounts?
     
  2. ProStreetCamaro

    ProStreetCamaro LawnSite Platinum Member
    Posts: 4,155

    I have always heard 1 full months worth of cutting.

    So example 4 lawns at 30 each would be 4X30X4= $480
     
  3. cajuncutter

    cajuncutter LawnSite Senior Member
    Posts: 626

    My standard is to never buy accounts. I have done it one time and that was all it took for me to learn my lesson. Got cancelled by several of the customers when they figured out they got traded off. Also I have picked up accounts because of this. My biggest customer was traded off and got pissed about it so he hired me. Now we take care of 5 of his properties. Any way good luck whatever you decide.
     
  4. 4 seasons lawn&land

    4 seasons lawn&land LawnSite Gold Member
    from NY
    Posts: 3,599

    wow I heard what you make off the account in a year is what you pay! 1 month worth would be a sweet deal to me.
     
  5. Dave_005

    Dave_005 LawnSite Senior Member
    Posts: 359

    IF i was to buy accounts i would pay a MAX of 3 -4 cuts for ONLY the accounts who agreed to sign a 1 year contract with me. i'm always hesitant to buy accounts from someone else and then risk having the customer go with someone else instead.
     
  6. grass disaster

    grass disaster LawnSite Silver Member
    Posts: 2,583

    he said the contract's are all signed so basically he would be subbing the work out to me. i would send i bill to him
     
  7. tilawn

    tilawn LawnSite Member
    Posts: 112

    i agree with this method it has worked well for me
     
  8. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    If the guy your buying from will take an hour or two to go around and introduce you to the customers they will probably keep you for many years.
     
  9. Lawnworks

    Lawnworks LawnSite Fanatic
    from usa
    Posts: 5,407

    Do it... it is the easiest way to expand. If you only pay 5-10% of the year's gross... you cannot go wrong.
     
  10. brucec32

    brucec32 LawnSite Platinum Member
    Posts: 4,403

    The standard is "buyer beware".

    You risk buying a pig in a poke. Why will the customer want to stick with you vs someone else? They often choose an LCO based on very personal factors and a sense of trust that isn't in existance yet with you.

    It's like you're dating a girl and one day she walks up with her friend and says "she's going to take over for me". You don't have to marry the new girl. You might not like her.

    If you have enough on the ball to keep the bought accounts I bet you could find your own and do better.

    Unless you scouted every account personally how would you even know if they were good accounts that paid appropriately? Or that they paid on time? Or that they weren't about to fire him anyway?

    Finally, my BS meter tells me that in the current construction DEPRESSION (not just a recession) where housing starts are down 2/3 and commercial construction is coming to a halt, it's doubtful someone is choosing this moment in time to expand his concrete business. I just heard of a company that laid off 25 concrete workers earlier this week. It's kind of like those corporate guys who get forced out saying "I'm leaving to spend more time with my family".
     

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