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Buying accounts


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Old 04-14-2008, 07:41 PM
ProCut TM
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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
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Old 04-14-2008, 08:07 PM
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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. - 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.
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Old 04-14-2008, 08:12 PM
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John

In our area guys pay no more than 4 cuttings basicaly a month of pay
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Old 04-14-2008, 08:19 PM
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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
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Old 04-14-2008, 08:21 PM
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Are these commercial clients under contract? If so do you know for how long? Also did you ask why he was selling them?
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Old 04-14-2008, 08:30 PM
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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
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Old 04-14-2008, 08:47 PM
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Well it will be interesting to hear what he has to say and when these contracts end.
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Old 04-14-2008, 08:53 PM
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Thanks for the replies guys

I appreciate it

John
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Old 04-14-2008, 08:58 PM
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You are welcome. Let us know what you find out and what you decide to do.
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Old 04-20-2008, 10:29 AM
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I offered him 3 months and he is flaking out and not sure he wants to sell them now.
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