Taking over another LCO's accounts

Discussion in 'Lawn Mowing' started by captken, Jun 29, 2003.

  1. captken

    captken LawnSite Bronze Member
    Posts: 1,707

    I need some imput from you, concerning these questions. What is a fair price for taking over another LCO's accounts. How much to compensate him? One quy wants out of 10 accounts, mowed every 2 weeks, the other wants to sell gear and 30 accounts, don't know the frequency of mowing there. I have the gear, [Hustler Z, walkbehind, 2 Shindawi trimmers, 1 Stihl pro edger, 2 backpacks, Stihl br 400 and large Robin, John Deere JX-85 21"and Honda 21"] Hired dependable help, and believe I can handle it.
    The guy with the 30 accounts wants to sell 54" Hustler shortcut, Bunton 36" Hydro, Red Max 7001, I don't know what else though, besides his custom built trailer.
    Ecomomics, and resources.
    Have any of you done this? How well did it work out for you.
    What are the questions to ask, and, what are the mistakes to avoid? Is it too late in the season? What do you think?
    Thanks,
    Kenny
     
  2. lawncare3

    lawncare3 LawnSite Bronze Member
    Posts: 1,981

  3. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    ive only done this one time. i purchased 3 customers(all on the same block) for a price of $100 each. it did not work out, lost all 3.
     
  4. chitwood

    chitwood LawnSite Member
    Posts: 11

    Captken,
    This is the way I got started in the business to begin with. I purchased all of the equipment (ZTR, WB, stick edger, string trimmer, backpack blower, assorted hand tools, and trailer) and seventeen accounts. The situation worked out great for me, as I've taken his part-time business and grown it into a full-time living. By buying equipment and all from the seller, I wasn't as concerned about him "selling" the accounts to me, and then going back and stealing them back from me. This is one risk that you will want to look out for if you are buying accounts only, because I know guys that have had this happen to them. The only downside to the accounts I bought with the business is that some of them are priced way too cheap, and I've really had to establish myself with these customers before I felt I could go up on them. I've never bought straight accounts, so I really don't have any personal advice to give you on that one..

    Is the guy that wants to sell the ten accounts moving out of the area? If not, what type of agreement are you get from him to ensure he doesn't come back and compete for your customers?

    Good luck and let us know how it turns out... :)
     
  5. captken

    captken LawnSite Bronze Member
    Posts: 1,707

    wants to keep some accounts near his home. Wants to spin off pest control business and do less lawn service. He is a friend, and probably could be trusted. I wonder what to compensate him with. Initially he stated he wanted what the accounts would generate in one month, cash upfront.....one member here that I know personally talked and he thought that high, considering its late in the season. thanks
     
  6. TaussigLawnCare

    TaussigLawnCare LawnSite Member
    Posts: 206

    I bought out a business this winter I bought each peice of eqipment seperate and I pay him %3 of what I make off his customers this summer so if I lose them like I did most of them I don't lose money.
     
  7. wriken

    wriken LawnSite Silver Member
    Posts: 2,154

    I would consider buying out somebody's equipment, But then again I like to buy new,I personally would never buy out their clients. Just my way:)
     
  8. chitwood

    chitwood LawnSite Member
    Posts: 11

    Nobody wants to think they are being sold!!! As the buyer it is your responsibility to communicate to the customer that you want to continue to serve them as well and hopefully better than there previous LCO. If the customer has already justified the expense why should they drop you unless you are giving sub-standard service. As far as compensation for the accounts your on your own. One month sounds very cheap to me. 10 acc. x $100 = 1000 If you keep 6 for 2 months or longer your making money!!!
     
  9. captken

    captken LawnSite Bronze Member
    Posts: 1,707

    I plan to meet with my friend tomorrow to discuss the details. He plans to keep the bulk of his accounts, I wonder whether or not he is weeding out the problem childs....He says that he has too much work for one man to do....they are mostly all 2 week cuts. I think he plans to sell them to me for the price he would recieve from them over the course of a month...2 cuts each. They are located in 2 different areas, near where I mow. Strange thing is he is keeping a few in both areas....
     
  10. chitwood

    chitwood LawnSite Member
    Posts: 11

    Captken,
    Your last response would definitely make me wonder? Is he a friend or an just a guy you know It does sound as though he is trying to get ride of problems or they have already gave him notice. I would offer a two part payment and only purchase all of his accounts in one area. Explain the advantage of keeping everything close. This way you will get the good/profitable ones with the poor/not-so-profitable ones.
    When I purchased my business the other guy went with me and introduced me to the customers and explained to them that he was getting out of it. I didn't lose anyone.
    If the guy is straight with you he shouldn't mind you being straight with him. Crooked people always think the person they are dealing with is trying to screw them over. Tell him exactly what your concerns are. He should understand, if not, maybe you should walk away and wait for another opportunity. These are a few of my thoughts and I hope it helps. Keep us informed. Good Luck:)
     

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