How do you price this?

Discussion in 'Landscape Architecture and Design' started by pav, Mar 28, 2008.

  1. pav

    pav LawnSite Member
    Messages: 5

    I am going on my second year in lawn care and I was loking into buying some accounts from another company. Is there a guide line I should follow on how much to pay for the accounts?
  2. gardener

    gardener LawnSite Member
    Messages: 32

    buy contracts only. also make sure no money has already been advanced.
  3. lawntactics

    lawntactics LawnSite Member
    Messages: 5

    I would pay no more than 1/3 of the contract price. There is no guarantee that the customers will keep you or resign for the next season. Be careful!
  4. AWR

    AWR LawnSite Member
    Messages: 45

    thats what i would say and also see if you can get some kind of contract that he cant advertise or work in the area of where these customers are for atleast 4 years..
  5. Pennings Gardens

    Pennings Gardens LawnSite Member
    Messages: 75

    I would write up a contract stating you will pay him xx % of the total bills written out and payment received from these customers after 1 season. He might be selling you the customers that don't pay or might take them away from you in a few months when he needs some beer money and starts doing some work on the side... You never know...

    I would also not pay him more then 10% of the annual revenue. (if this is residential mowing: $50.- per cut X 20 cuts = 1000.- spring clean up $300.- fall clean up $ 400.- = 1700 X 10% = $170.- per customer) and so on.BUT ONLY AFTER YOU HAVE BEEN PAID!
  6. ponyboy

    ponyboy LawnSite Bronze Member
    from ny
    Messages: 1,586

    i have bought 3 companies in the past if you are buying the whole company then follow the the above comments pretty good but i found if a company is only selling a few accounts they usually are PITAs and would be leary good luck keep us posted
  7. Lawnworks

    Lawnworks LawnSite Fanatic
    from usa
    Messages: 5,407

    Try to get them for 5-10% of gross.
  8. pav

    pav LawnSite Member
    Messages: 5

    well thaks for the good advice! I found out that the total gross for the year would be $40000.00. I offered them $5000.00 for the contracts. I thought that it was fair, but the were expecting to get at least $35000.00 for them!!!! I told them good luck that no one will do the entire season for only $5000.00. They would lose all kinds of money with the rise of gas and everything else.
  9. Lawnworks

    Lawnworks LawnSite Fanatic
    from usa
    Messages: 5,407

    Try them back in a month... if they have to be out by a certain date... they can get pretty desperate... 5k is better than nothing.
  10. TGK

    TGK LawnSite Member
    Messages: 134

    Just keep advertising spend your money on that. People will come around.

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