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Have opportunity to buy 100 lawnmowing accounts. How do I do this?

Discussion in 'Lawn Mowing' started by Emerald, Nov 14, 2000.

  1. Emerald

    Emerald LawnSite Member
    Messages: 29

    I have a person who is willing to sell me 100 lawn accounts that generates $100,000.00 a year in gross income from weekly lawn mowing, snow removal, spring and fall cleanups. He is asking $50,000.00 up front for accounts only. This includes no equipment. Is that over priced? He says if I don't buy it someone else will. I am very interested but have no idea how to pursue this. I've spoken with the bank and they have approved the $. Do I need to get a lawyer to write a legal purchase agreement or offer? How do I get this guy to give me more info on the accounts? How do I know that I can keep these customers after I buy the company? How do I keep the previous owner on my side? Any advice would be greatly appreciated? Has anyone ever done this? Thanks in advance!!!
  2. bob

    bob LawnSite Platinum Member
    from DE
    Messages: 4,260

    Way too much money! In my area, accounts sell for 7 to 8 weeks worth of cuts. Do you want to work for 1/2 price next year?
  3. mdb landscaping

    mdb landscaping LawnSite Silver Member
    Messages: 2,205

    i dont know much about the pricing end. but once you obtain the accounts there is no binding contract for the customers to stay with you. i know a guy who sold out and not a lot of the customers liked the new guy and got someone else. sounds risky to me.
  4. thelawnguy

    thelawnguy LawnSite Silver Member
    Messages: 2,411

    In the past, I have heard figures around 5-10 per cent of the annual gross, make some sort of arrangement where you pay as you go, you dont want to buy 100 accounts but only have 50, work it out so you wont be paying for those who go elsewhere.
  5. ronslawncare

    ronslawncare LawnSite Senior Member
    Messages: 540

    dam 50,000 someone over the summer approached me 100 acounts and a 32 lesco 10 garbage cans two trimmers echo hedgecutter a redmax backpackblower and like a littlecrappy trailer 6000 my friend bought it in a seconds i was just starting i didnt no if i was gona get involved this much he said that he lost alot of acounts when he tried to price higher.but that was a deal of a lifetime .tell that guy to take a walk if there not contracted wouldnt even bother ever.
  6. CCLC

    CCLC LawnSite Senior Member
    Messages: 261

    Way too much money!! I would set up a payment plan over the next year for no more than 5% to 10% of the gross. Make a contract that if you lose any of the customers that you will not pay for them. You don't want to pay for 100 lawns and only have 20% to 30% stay on. My customers are loyal to me and the work that my company does for them. I would guess that if I sold out that 70% would review their options and "shop around." You also need to look at his books. Make sure that he isn't inflating his gross trying to get more out of his sale. See a lawyer
  7. Toddppm

    Toddppm LawnSite Senior Member
    from VA
    Messages: 268

    Run away run away! Spend that money on some good advertising and take on the customers you want. I passed along a deal to a friend of mine earlier this year, guy had 35- 40 yards $1200, he bought it , they were all smaller yards where the guy was doing a crappy job, no edging string trimming, my friend showed these people what it should look like , raised the prices and he kept most of them. It was right near him so it worked out good for him, too far for me to go.
  8. Skookum

    Skookum LawnSite Senior Member
    Messages: 675

    I would agree. That is too much money for just accounts and no equipment and no way to know if you'd keep those accounts next year. Maybe he already lost half of them for next year?

    I'd say, you'd be better off using $50,000 on YOUR business. You could get those 100 accounts yourself for less than $50,000.

    Just my opinion.
  9. Ssouth

    Ssouth LawnSite Senior Member
    Messages: 436

    I purchased five accounts in mid Feb.. Those five accounts had an annual income of approx. 25K. I payed 3K for them. The payment arrangement was like this: The first month I worked; the seller billed the customer( that was my down payment). And then the rest was split up into eleven monthly payments. Has worked great so far. I've even picked up five more accounts in the area. Be sure to put a non-competition clause in your contract with the seller. I think 50K is way too much. See if someone else will buy them (doubtfully). Then go back and offer him the 5-10K. Make sure the contracts are really worth what he says.
    Hope this helps.
  10. curlawngreen

    curlawngreen Banned
    Messages: 309

    I wouldn't look at it twice. No way. Give Phil Nelson or Bill Phagen a call. Think, think, think, then think three times. 3%-10% would be all I would pay with a no competion clause.

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