Buying Customers

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.

Lawn care business tips

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.

Well we have about 30 cuts a season....for 30,000 worth of annual cutting you would spend 15-16k and be happy?

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.

Hmm interesting. Where have you heard 1 month of revenue from?

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.

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.

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?

Originally Posted by LawnMedic

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.

Thats great he actually worked with you. Very good deal you had there.