Residential accounts, what are they worth to sell?

Discussion in 'Business Operations' started by Total Turf Care, Mar 4, 2008.

  1. Total Turf Care

    Total Turf Care LawnSite Member
    Messages: 2

    I am in north Texas, DFW area and I have 90 residential mowing accounts. I am looking at selling off my mowing customer base but I have no idea what my accounts are worth. I charge on an average $30 a yard for weekly service. We start mowing in March and end usually the last week of October. A company in the business park where my shop is located is interested in buying out my customer base. Can someone out there tell me what I could reasonably get for these accounts?
  2. pl1985

    pl1985 LawnSite Member
    Messages: 46

    I nave heard of 40% of yearly gross sales being a standard way to price lawns. So if a lawn grosses 600.00 a season, you'd sell it for 240.00
  3. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Messages: 1,775

    When we discuss a buy-out there are a lot of factor that come into play.

    1. Equipment isn't worth anything because it's normally auctioned off as duplicates.
    2. Contracts that have exit clauses are worth far less than a binding deal for the year.
    3. Maintenance accounts are bought at 100% of the previous years net unless they leave.
    4. There is a 40% loss expectation due to management changes.

    With the last company we bought, we bought all the trucks and kept servicing like nothing changed for 6 months to see what our contract loss would be and then solidified the deal.

    So, in short, you should be asking 60% of last years net and 60% of new contracts.
  4. Stillwater

    Stillwater LawnSite Platinum Member
    Messages: 4,889

    spend a month visiting every single customer and get a signed doc stateing their approval and agreement to be serviced by your buyer. if not your base is worth jack squat simply becouse you in reality do not own them. You need legal standing to sell something so what exactly is it your selling? an opertunity? a lead? a chance?. so you sell all your accounts and a butt load end up going with a landscaper of "their" chooseing. So now what does the guy do that gave you money for accounts he in reality can't have.
  5. Stillwater

    Stillwater LawnSite Platinum Member
    Messages: 4,889

    so what are you saying that you committed fraud? also some could call this money laundering on the seller side

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