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ProCut TM
04-14-2008, 08:41 PM
I have the chance to buy some accounts that will get my business to where it needs to be, but the guy wants 4 months revenue for them, what do you think? Is it worth it?

what can I do to reduce the risks of losing the accounts after I pay 4 months income for them.

Thanks, John
ProCut Turf Management

Steve
04-14-2008, 09:07 PM
Hi John,

That sounds high compared to what we have talked about in the past.

A while back I put together this blog post on the topic of purchasing lawn care accounts.

Suggestions on buying lawn care customer accounts. (http://lawnchat.com/?p=51) - General rule of thumb for buying customers is that they are worth about 1 month revenue. If they are commercial you’ll pay a little more and if there is a signed multi-year agreement in place ( which you said there is ) then this will push the price up too. So it could be worth as much as 2 or 3 months revenue depending on the situation.



Let me know if this information helps.

lawnindustryconsultants.com
04-14-2008, 09:12 PM
John

In our area guys pay no more than 4 cuttings basicaly a month of pay

ProCut TM
04-14-2008, 09:19 PM
I am in FL so the season is all year though it does slow down Dec-Mar
most of these accounts are Commercial

I was thinking of offering him 3 months but no more

my incentive is that this will bring my monthly income to where it needs to be

John

Steve
04-14-2008, 09:21 PM
Are these commercial clients under contract? If so do you know for how long? Also did you ask why he was selling them?

ProCut TM
04-14-2008, 09:30 PM
I'm not sure if they are under contract I will ask that.
He is selling because he is getting out of the business.

I ask him about a no compete clause and he has no problem with that. I also told him that most guys around here are charging 3 months and that the board say 1 month. He is pretty set on 4 months I think it is a set dollar amount that he wants.


John

Steve
04-14-2008, 09:47 PM
Well it will be interesting to hear what he has to say and when these contracts end.

ProCut TM
04-14-2008, 09:53 PM
Thanks for the replies guys

I appreciate it

John

Steve
04-14-2008, 09:58 PM
You are welcome. Let us know what you find out and what you decide to do.

ProCut TM
04-20-2008, 11:29 AM
I offered him 3 months and he is flaking out and not sure he wants to sell them now.

Steve
04-20-2008, 11:49 PM
I am guessing not many others made a bid on it either?