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Selling customers...

Discussion in 'Lawn Mowing' started by KenH, Jan 22, 2003.

  1. KenH

    KenH LawnSite Bronze Member
    from CT
    Messages: 1,622

    Is there a rough "asking price formula" to selling clients?? ie.. Do I ask for a % of the amount the client spends in a year??
  2. Husker1982

    Husker1982 LawnSite Senior Member
    Messages: 480

    Ken it is hard to say. I am in the process of buying a business and the guy i am buying from is selling it to me for 1 1/2 months income. this might help you and good luck selling.
  3. kutnkru

    kutnkru LawnSite Silver Member
    Messages: 2,662

    This may help:

    The steps we recommend for purchasing an established business in our area is:

    1. Consult your accountant

    2. Consult your attorney.

    3. Negotiate the asking price of 30% of annual gross sales
    (+)value of their equipment.

    4. Finalize all business acquisitions under the advisement of your attorney.
  4. KenH

    KenH LawnSite Bronze Member
    from CT
    Messages: 1,622

    Thanks guys...There really is no need for an attorney or tax advisor as I am not selling the whole business, just weeding out some clients. I wasnt sure if there were any guidelines on how much to ask for each client.
  5. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Messages: 2,075

    Best of luck selling some of your customers. Are you going to work with the buyer and help to transition the customers over to the "new" company? Are you going to offer a non compete clause in the contract so that the buyer is assured you will not take the customers back?

  6. KenH

    KenH LawnSite Bronze Member
    from CT
    Messages: 1,622

    The interested buyers are: One of my employees who have been with me for 12 years, or my brother--both of who have worked on these properties before and already have good relationships with the accounts. Ive had these accounts for a while, so they will take my advice on who to go with. Also, I have NO interest in taking these back.....non-compete is unnecessary. Thanks.. Ill follow up when I make a decision.
  7. kutnkru

    kutnkru LawnSite Silver Member
    Messages: 2,662

    I have a question for you. Is your employee leaving your organization???

    If hes looking to get his foot thru the door then I can understand the slaes venture. If not, then why dont you just give him the dead weight???

    I realize that what #s we need are not what an employee needs to recoup op costs etc., so wouldnt it be better to let him have at 'em say on the weekends to keep the competition out your neighborhoods by lining his pockets a little to say thanks for ALL those years of service (if hes staying onboard that is)???

    Im not criticizing just asking.
  8. KenH

    KenH LawnSite Bronze Member
    from CT
    Messages: 1,622

    He runs his own business on the side. I offer him insurance and great pay to stay with me for at least 30 hours per week. Probably 75% of his business now has come from calls I did not want, and probably the last 25% of his business came from being seen at those accounts. (I have also passed on customers for my brother to be a part timer, and my dad will be part timing it this year!!) Up until now, I have always given accounts away but some of these properties I have been 'cultivating' for 15 years or so, so Im thinking it is not fair to just turn them over, prices where they are at now, etc.

    Right now he has the best of both worlds...has his own business, collects from me during the winter, and fills in his 'spare time' working for me during the season. Dont get me wrong, its a big help for me also, as I do not need to keep him busy for 50 hours a week. Plus he is a great employee and knows my clients.

    Do you think I would be a d*** if I were to ask for money for some accounts??
  9. kutnkru

    kutnkru LawnSite Silver Member
    Messages: 2,662

    Regardless of what the paperwork says it sounds to me more like a working business realtionship. This is completely different from someone who works for you looking to expand his $$ a few bucks on the weekend and your willing help out with some non-desireable clients to get him started (lol).

    Because the clients in mind (although they may not be big $$$ moneymakers for your outfit) would definitely be worthwhile to the right LMO -- therefore I see absolutely np with you selling them to the employee.

    Although the employee is an employee he's actually more like an informal sub IMHO, so thats a whole diff ballgame (lol). I have done this before with friends of mine, helped them out in a pinch when needed or bought a client who is in an area they no longer plan to service that we do etc.

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