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What are these accounts worth?

Discussion in 'Business Operations' started by pickupman96, Dec 13, 2011.

  1. pickupman96

    pickupman96 LawnSite Member
    Messages: 51

    I am looking a buying some accounts here in my area. WHat im looking for is how much are they worth, and what is the best way to go about buying them as far as payment schedule. He wants it all up front but i dont like that. There are 23 weekly mowings that do $1100 per week. There is also a list of about 15 other name that have other work done, cleanups, trimming, ext. He gave me a excel sheet that shows $59410 revenue and $6111 in expenses from April- October of this year. Also include is a contract for a condo complex for next year that $20,000 plus materials. That includes spring/fall cleanups, mulch and weekly mowing. He is asking $20,000. What do you guys think and what should my next move be? I just really need more accounts to be able to make a living doing what i love and its either buy the the accounts of take a chance and spend the same amount in advertising.
  2. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    First, do a search on this site for comprehensive answers.

    The thing with buying contracts worries me. Is this a licensed company?How long has he been in business? Why is he selling a "client list?"

    You have no assurance that people or an HOA will continue with you.

    I believe you need to have every one of "his" clients sign a new contract with "you."
    Sorry, but this type of scenario leaves me skeptical.

    Relax until after the New Year, and then start advertising to your target demographic then.
  3. wbw

    wbw LawnSite Fanatic
    Messages: 5,994

    I would want him to go with me and personally introduce me to the customers. This will ease the transition. I would not pay him all up front. He has rapport with these customers and needs to have a vested interest in their staying with you. I would want something like 1/3 down, 1/3 after 90 days and 1/3 after 180 days. I would want to pay the last two payments based on customer retention. Retain 100% of the customers after 90 days pay 100% of the second payment. Only retain 80% then pay 80% of the second payment. Same with the final payment. Of course you want to make this deal near the beginning of the "season".
  4. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Messages: 10,737

    I'm in the same boat. Have a guy getting out due to health reasons. He has 75+ residential accounts, he has been cutting them all for 10+yrs. Problem is no contracts
    Posted via Mobile Device
  5. pickupman96

    pickupman96 LawnSite Member
    Messages: 51

    I was thinking something like 5k up front and then divide the rest and put a price on the like say $400 per account and only pay for each account i retain after 90 days. But what i really want to know is are the 25 weekly and 1 condo worth the 20k. He has had the weekly residential for 2-3 years

    NEW CITY LAWN CARE LLC LawnSite Bronze Member
    Messages: 1,271

    I've been offered X-amount of $$ for accounts in the past, the buyer wanted to make monthly payments on his offer for 12 months, and from a sellers stand point, I would not take payments period, if their quality of work is not at-least par to keep each and every customer happy then they will get fired and in turn not pay me, so from my stand point as a seller, if someone wanted to buy some accounts from me, I would want the agreed upon price paid if full at time of transfer....Needless to say I turned him down as he was unwilling to pay upfront..
  7. meets1

    meets1 LawnSite Gold Member
    Messages: 3,850

    Ok, I have done both. Thing is most will stay but this gives them the chance to jump. Now some people might of liked him and didn't bother checking the work. Others may know you and don't like you or company period and they are going to jump. Either way, make a deal, nail down a price and roll from there.

    I am again finding myself in buying accounts. I have done this in the past and there is an ad in paper - snow and lawn business, equipment, clients etc. I know the guy, he knows me, we really dont get along but I am calling him tomorrow. We'll see what happens.
  8. wbw

    wbw LawnSite Fanatic
    Messages: 5,994

    Residential contracts are worth zero.
  9. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Messages: 10,737

    I could prolly spend half the money and direct mail target properties and get just as many accounts
    Posted via Mobile Device
  10. pickupman96

    pickupman96 LawnSite Member
    Messages: 51

    Thats where im torn. I could spend the 20k or spend 10k advertising. The problem i see is that in my area the market is saturated with illegal LCOs and lowballs. I am starting to doubt that there are 20 accounts to be had in this town of 80k

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