Let me first say that I'm no expert in this topic. But I've done it once or twice. There are advantages and disadvantages to buying an existing client list. The value of any service business is the owner that runs the business and the type of relationship that the owner has with his customers. What kind of support will you get from the departing owner with his old customers? Will he be there to answer questiosn or help ease the transition if the customer is a little leary? You are not guaranteed that any of the customers will remain with you after you 'buy' the rights to contact them. I'll address this in a minute in the pricing part of it. When taking on somone else's customer list, you need to make sure that your services and contracts will align - or will the new customers accept your pricing and contracts. How will you manage this transition? Will they pay you? What's in the current contracts about payment? Will they accept your contract? How does his customers value his service? How long have they been with him? Are they with him because of price? His service? The relationship? Do they pay on time? Have you seen payment records? Can you take over these assumptions and have the customers appreciate you in the same way? Look at the revenue generated from each customer. If he's got a couple of Dog's... maybe you don't buy them, or if it's all or none, negotiate to pay less for these. A couple of Star Customers - you might pay more for them. Particularly if he takes you and personally introduces you to them and walks the customer through the transition. Ultimately, the list may be worth something. But how much is more based on how long it would take you to find those 50 hot leads and sell the work yourself through your traditional methods. Guaranteed you'll loose some of the customer in the transition. How well the process is executed will determine the percentage that remains. You've got to overcome any of their objections early through a clear, consise message that is commuincated perhaps by the two of you. The list has more value to you if the customer stays with you for a year, two or three years. Structure your buy out so you pay the previous owner a gross percentage of existing sales for the three years. If you upsell a client on a patio or additional service that they didn't have before, you need not pay him back on this sale. So clearly define what service each customer is receiving, what the annual revenue is per customer. Maybe give an initial down payment of X dollars per customer for the opportunity to contact them. Offer 3 to 5% (or some number) for the first two years on each customer, and maybe 7 to 10% on the third year. This will encourage the selling owner to hang in there with you, as the big payout is three years down the road. If his customers are not relationship based... this may not work. The price you pay also depends on how desperate you are and how he perceives this. Are there any other going concerns that are offering to buy his customers? If not, then you've got more leverage to negotiate terms. Maybe three years is too long... shorten it to one or two years. Rather than just basing it on the individual customer, you could base on it gross sales for the group. If total sales for 50 customers is $50,000... than pay a percentage on whatever sales you derive from them at certain points. Maybe the higher the percentage that remain, the higher the percentage you'll pay. So set up a tier structure. $50,000 in existing buisness $45,000 to $50,000 after one year = 10% $35,000 to $44,999 after one year = 7% $20,000 to $34,999 after one year = 5% $ 1 to $19,999 after one year = 3% The stronger the list, the more the seller will make. You could also structure this so there are different payout points over time so it's not just at one year. Depends on what you want. Is the seller going to remain in business? Will he continue to offer other services to these clients? You should probably have a non compete for a period of time that prevents him from contacting them or doing any type of work for them for a reasonable period of time. And you need to make sure that he's not selling this list to someone else as well on the side. Hope this helps. Good luck. PS - only bought clients a couple of times. For all the times that other contractors have offered to sell... I always found it to be less expensive to find my own clients since they usually wanted too much for their list or the needs didn't match up. Don't be afraid to walk away. If it works out... it's a great way to grow. But don't presell yourself on it before you know all the 'dirt' on his customers. Remember, you'll inherit the revenue as well as all the habits, promises, etc.