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Possible customer base purchase, determining valuation of annual accounts

Discussion in 'Business Operations' started by Ijustwantausername, May 13, 2019.

  1. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 17,515

    Ok
    So $816.00 per account
    You have to take a risk on how many are worth it/keepers...
    Let’s Be optimistic and say 65%
    That puts your offer at $24,000
    He wants $46000
    But I’m fairly sure what he wants is based on fairies and rainbows and there’s not any basis for his valuation.
    Do you have $24,000 you’re willing to risk on growth and see if you can get ROI?
     
  2. GRANTSKI

    GRANTSKI LawnSite Silver Member
    Messages: 2,100

    No way. One thing if he’s set up his business & customers to transfer to a new owner. Sounds like the opposite. To me these deals only would make sense to pay up at the end of each month for the season based on how many customers actually stay.
     
  3. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 17,515

    Sure
    That’s true.
    But the value of something is as much as a person wants to pay for it.

    There’s no way a classic mustang is worth &18,000 , especially in a u fix it state because “everything (including the rust and corrosion) is original”

    But people do pay for something that is rare and take a risk on it. Because what they want isn’t that common.

    This is the opportunity (risk) to grab 46 accounts all at once and make them your own
    If half stay/ are worth it that’s a bit over $1000 per account.
    At $200 per month it will take a season of doing the accounts to pay it off.
    So it’s a season risk for growth.
    Basically a 50/50 gamble

    It will take 3 years to show real profit anyway you slice it.

    So the question is how bad does the OP want it?
    Will taking them all now prevent someone else from getting them later and becoming a thorn in his side?
    How much would it cost him to get them in his own?

    All
    A gamble

    Just like buying a 1970 mustang ... do you REALLY want to do it?
     
    GreenscapeCT, Jeff@diyokc and hort101 like this.
  4. jonthepain

    jonthepain LawnSite Bronze Member
    Male, from Raleigh
    Messages: 1,219

    You might add to the discussion that Raleigh is growing extremely quickly at this time, thus making acquisition of new customers relatively inexpensive. That might lower the value of the seller's customer list.
     
    Ijustwantausername likes this.

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