Buying lawn care customers.

To grow your business, you can buy lawn care accounts and get a bunch of them in one fell swoop or you can utilize your lawn care marketing and build them up more organically over time. Either way, it’s going to cost you to do it. Either time or money. So if you have the cash on hand, you might consider what these lawn care business owner did to grow. They each shared with us some insights as to how they made it work on the Gopher Lawn Care Business Forum.

One business owner wrote “I was curious to know if anyone has had the opportunity to buy some new lawn care customers? More specifically I was wondering the type of terms business owners have dealt with and if there were any good or bad stories that were experienced going through the process of buying customers. Did you ever have the chance to buy them but just never pulled the trigger?

In my area we have about 30 cuts a season and there is a local lawn care company selling a group of customers that are worth $30,000 in annual mowing contracts for $15-$16k. Is this a good price?

I am a little concerned about going through with it. There are a bunch of issues I am hung up on. How do you work the terms out? How do you let the customers know you are taking over? Do you send out a letter stating what’s going on, or try to call them, or just show up and continue mowing?

These contracts also have fertilizer customers in them as well and I feel the fertilizing customers hold a lot more value then that actual hard labor mowing accounts, but is this actually the case?”

A second lawn care business owner shared “here in my state of Florida, lawn care customers sell for 3-4 months income of said customer. So for example a $100 monthly mowing account would cost you between $300-400. I’ve had some good experience buying lawn care accounts. Sure there is a risk associated with it, but if you are smart and a bit lucky, it is a fast way to grow your business. My accountant also told me I can write off the buyout on my taxes.

Lawn Care Business For Sale

Lawn Care Business For Sale

Prices will vary based on many factors including location. I don’t think the northern states are pulling 3-4 month income for accounts, I think they only get 1 month. To be sure, ask around your area with some other local guys to see what they suggest. Also, look online, especially on those classified ad sites. You surely will find some businesses being posted for sale and you can see what kind of price they want compared with how much the accounts are making.

I would not buy accounts for 50% of the annual income though. The example you gave seems way high. If you buy mowing 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% of the season before you even break even. If you lose some of those high priced lawn accounts, which is inevitable, it will sting A LOT!

Paying 3-4 months income is much less of a risk. The faster a profit can be turned on these bought customers, the better. Some business owners are just not willing to take this gamble. So they won’t consider buying accounts.

The terms of the deal are easy to handle. It simply comes down to what does he want and what you want to pay. From that you find middle ground with a number everyone can live with and you purchase them.

When I bought out another local lawn care company in the past, he wanted 4 months income for his mowing 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 for the remaining 3. This way the customers were all introduced to me by him and when the month was up we sent out letter saying that the two companies merged and all future payment needed to be sent to my company name. So in total I paid about 3.5 times the monthly customer income, 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 mowing account I bought from them. Those accounts were both paid for and making a profit before they went away.

This type of deal may not be possible in all situations, but it was ideal for me and really help build trust with the new lawn care clients.”

A third lawn care business owner said “I just got a bunch of lawn care properties for this season from another lawn care company and maybe my story will teach you something new. This other business owner and I started to make a deal for me to buy his lawn care accounts about 2 years ago. But we could never come together and meet in a happy middle range. He wanted way too much for the properties. Being very friendly, I always asked if he would reconsider and he didn’t. Finally we met up last winter, and he just gave me the properties. All he wanted in return was to rent one of my mowers 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 and that’s why he said he gave them to me. He got burnt out from running his lawn care business and he just wanted out.

So sometimes it pays to pull the trigger and make the deal happen while other times it pays to hold and wait. Feel out these situations and find one that works for you. What ever you do, don’t go into negotiations overzealous because that is the best way to go bankrupt over it”

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