PDA

View Full Version : Buying Customers


LawnMedic
02-23-2010, 06:32 PM
Anyone have any opportunitys to buy some new customers? Was wondering type of terms people have dealt with and any good or bad stories that were experienced. Also have the chance too but never pull the trigger.

ProCut TM
02-23-2010, 08:40 PM
here in FL customers sell for 3-4 months income of said customer
IE. a $100 monthly account would cost you $300-400
I've had some good experience buying accounts. It is a risk, but if you are smart and a bit lucky it is a fast way to grow. You can also write off the buyout on your taxes.

LawnMedic
02-23-2010, 08:46 PM
Well we have about 30 cuts a season....for 30,000 worth of annual cutting you would spend 15-16k and be happy?

ProCut TM
02-23-2010, 08:53 PM
where are you located? I don't think the northern states are pulling 3-4 month income for accounts I think they only get 1 month. Ask around with some other local guys in your area.

I would not buy accounts for 50% of the annual income, that seems way high.

said $100 account I can buy for $300-400 will net me $1200 for the year.

LawnMedic
02-23-2010, 08:56 PM
Hmm interesting. Where have you heard 1 month of revenue from?

ProCut TM
02-23-2010, 09:01 PM
just info I read on this board back a few years when I was buying some accounts and researching it much like you are now. I research everything I do, so I can make the best decision for my company.

ProCut TM
02-23-2010, 09:06 PM
If you buy accounts for 50% of the annual income, you have to mow them for free for half the season plus cost of overhead for the work. So you are more like 75% before you even break even, and if you lose some of those high priced accounts it will sting A LOT!

At 3-4 months income it is much less of a risk. and a faster profit turn around. And some people are not even willing to take this gamble.

LawnMedic
02-23-2010, 09:08 PM
SO you have pulled the trigger on buying some companies out? How do you work the terms....send out a letter stating whats going on, or try to call them?

ProCut TM
02-23-2010, 09:23 PM
SO you have pulled the trigger on buying some companies out? How do you work the terms....send out a letter stating whats going on, or try to call them?

the terms are easy, what does he want + what you want to pay = meet in the middle with a number everyone can live with.

When I bought out we'll call it company X he wanted 4 months income for his accounts, I told him ok I will work with you for one month we can use my equipment and after one month I will pay you 3 this way the customers were all introduced to me by him and when the month was up we sent out letter saying the the two companies merged and all future payment needed to be sent to ProCut. (so total I paid 3.5 since we worked together for 1 month)

This worked out well for me it has been three years now and I only lost two of the account I bought from company X. They were both paid for and making a profit before they went away.

LawnMedic
02-23-2010, 09:26 PM
Thats great he actually worked with you. Very good deal you had there.

ProCut TM
02-23-2010, 09:37 PM
this will not be the case all the time, but it was ideal for me and really help build trust with the new clients

denvilledan
02-24-2010, 02:19 PM
I just got a bunch of properties for 2010 this way. We started to make a deal back in 2008 but it never happened. He wanted too waaay to much for the properties. Being very friendly I always asked if he would reconsider and he didn't. Finally we met up in November of 2009, and he just gave me the properties. He just wanted to rent one of my machines for a week as payment.He realized no-body wanted them for what he was asking and i was the most friendly and stayed in contact with him he said. So it pays to pull the trigger but don't go bankrupt over it.

LawnMedic
02-24-2010, 04:57 PM
Very interesting. I feel as if the fertilizing customers hold a lot more value then that actual hard labor accounts like the cutting.

Steve
02-25-2010, 10:22 AM
I just got a bunch of properties for 2010 this way. We started to make a deal back in 2008 but it never happened. He wanted too waaay to much for the properties. Being very friendly I always asked if he would reconsider and he didn't. Finally we met up in November of 2009, and he just gave me the properties. He just wanted to rent one of my machines for a week as payment.He realized no-body wanted them for what he was asking and i was the most friendly and stayed in contact with him he said. So it pays to pull the trigger but don't go bankrupt over it.

This is very interesting!

Do you remember what multiple he wanted based on their monthly income?

Have you been keeping your eye out to acquire other customers this way?