Value of customers

Discussion in 'Starting a Lawn Care Business' started by peteloare, Apr 14, 2007.

  1. peteloare

    peteloare LawnSite Member
    Posts: 59

    A small landscape company with 30 customers grossing 15000.00 per year is selling just the customers with contracts for the 2007 season.
    What do you pros feel this may be worth here in michigan?
     
  2. FIRESCOOBY

    FIRESCOOBY LawnSite Senior Member
    Posts: 981

    Is it year-round contracts?

    $15k for 30 customers is ultra low, but maybe I am looking at it from my area. Even if it is seasonal, 30 customers would equal twice that WITHOUT leaf clean-up, aeration, etc.

    I'd see if he was willing to let you look at his books from last year, contracts signed with price, etc.
     
  3. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    500.00 a customer ? hummmmmm
     
  4. MOW PRO LAWN SERVICE

    MOW PRO LAWN SERVICE LawnSite Bronze Member
    Posts: 1,566

    $500 a customer is cheap,thatz $16 a cut on 30 cuts a year.
     
  5. chris638

    chris638 LawnSite Member
    Posts: 149

    I've always heard a rule of thumb to go by was one month's gross for all accounts you are buying.
     
  6. supercuts

    supercuts LawnSite Silver Member
    Posts: 2,784

    ive heard this rule but could not imaging paying a whole moths sallary for it, perhaps the one cut price per lawn up to $50 a lawn, those prices sound really cheap though at 15K
     
  7. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    Yeah, there's likely a fair amount of below average turf, the kind with hardly any grass or otherwise weak lawns that only require cutting 8 - 12 times / year, that explains the $ / customer ratio. It's either that or they're totally underbid, or a combo.

    You can try cutting those kind of lots weekly, but IME it's not happening, either way I'd want to see a good sampling of the lots.

    Still money is money, $500 / customer isn't that bad (try $200-$300 / customer / year), lots like that used to make up close to half of my total customer base and the fact it is $500 tells me there's probably a good amount of nice turf, too... You have to start somewhere and grass is grass, just have to schedule them accordingly and the maintenance on the machines is a bit higher but otherwise there's still profit, up to you.

    I like the 1 month's total gross, thou I'd shoot for an average because April or May's gross is likely to be higher than say, August.
     
  8. SLCINC

    SLCINC LawnSite Member
    Posts: 110

    I bought out a similarly sized company last season and about 4,000 for the customers, about one months revenue
     
  9. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    That's all I would pay for it and they would all have to be signed with us! We bought out a guy last year and his customer list was great on paper but 5 customer's didnt go with us right off the bat, second year...had 2 of his old customer's drop us. So to me its not worth much at all.
     

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