Tips,do's and dont's of buying other LCO's account's

Discussion in 'Starting a Lawn Care Business' started by gilatplc, Jan 24, 2006.

  1. gilatplc

    gilatplc LawnSite Senior Member
    from FL
    Posts: 330

    Hello all, I need advice, tip's and what not for buying accounts from another business
    I have been in business 1 year now have 10 accounts I started off by buying another company out that included the equipment but the accounts for free so it was just up to me to keep them. Right off the bat I lost 4 accounts just from the buy out,the others I lost from moving out of state or there untimely passing.
    For this year I am looking to increase my business by at least another 10 accounts and 3 commercial accounts. I have the opportunity to buy the accounts that I desirer to increase my business but non of them are under contract and he is asking 5 months gross for each account there are 2 commercial account also that I would like to buy.

    I think this is a bad idea because of the fact that the accounts are not under contract and will be losing more money then I will be making??!!

    What do you think??

    Thank you Gil Pride Lawn Care
     
  2. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,849

    I would not buy them for more than one month (4 weeks) gross if they are un-contracted. I bought a handfull of accounts from a guy a number of years ago for 4 weeks worth of $, he was happy, i was happy, and i've still got all but one (rotten cheap bastard) customer.
     
  3. BCFLawnLandscape

    BCFLawnLandscape LawnSite Senior Member
    Posts: 333

    I personally would not buy any accounts off of anyone. Especially if they were not in a contract. Too much risk, for not enough money to begin with. I'd rather get off my butt and go recruit some of my own business!
     
  4. Eurosport

    Eurosport LawnSite Member
    from Canada
    Posts: 152

    I would never buy lawns that were not under contract. Why would you pay someone a couple hundered dollars for someone's address? you still have to solicit them and hope they keep you as a lawncare provider. The only way I would ever pay someone is when their customer signed a year contract with me. Even then I would only give 1 month revenue max per customer.
     
  5. o it grew landscaping

    o it grew landscaping LawnSite Member
    Posts: 36

    whenever i have bought customers off people, i only offer them 20% of the first months gross, any more than that you are wasting your time. there are people that will drop you within a week just because you did something different than the other gardener!
     
  6. o it grew landscaping

    o it grew landscaping LawnSite Member
    Posts: 36

    also if you buy from guys that have been in the business for a while with all the same customers, chances are he has never raised his prices, and as soon as you do for growth they will start a fuss and tell you they will find someone else...
     
  7. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    Some one said in here before with at another post in the past and I thought it made good sense, If buying out another companies contracts I would go around with the seller and meet his customers and get a definete commitment form them before I buy anything. And like some one said in here why pay $$$ for an address.:confused:
     
  8. GarPA

    GarPA LawnSite Silver Member
    from PA
    Posts: 2,585

    For a number of reasons, not the least of which is the no contract issue, I would not buy these accounts.

    As was mentioned above, I think you'd be better off going out and blitzing those neighborhoods where you would like to work. Far less chance of losing them as could happen with some/many of the accounts you buy.
     
  9. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    I have bought accounts several time with much success. I didn't lose many. On both occasions I think we kept at least 90 percent of them. Pay him 1 month gross for each account and ask him to take you around and introduce you. say fro example he has 20 accounts and each one gross 1000 a year and you pay him 1 months gross on each of them 2000 dollars you don't have to keep many to get a return. I would do it for 1 month's gross in a heartbeat.
     
  10. gilatplc

    gilatplc LawnSite Senior Member
    from FL
    Posts: 330

    OK but from my experience is that residential account and contracts just don't go together and they all say NOWAY!! to contracts??
     

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