At some point you may have the opportunity to buy or sell a lawn care business or maybe buy or sell lawn care accounts.
What are lawn care accounts worth? I've found, from my experience, that there really isn't any hard or fast rules when it comes to the value of them. It varies by regions of the country, time of year, what kind of account it is, who's buying it or who's selling it.
Here's some of the things I've learned about this...
I've seen accounts sold for 1 month's gross income. For instance if a lawn care customer is paying $200 for basic lawn care service each month, that account might be sold for only $200.00.
I'm not saying that's all it's worth or all you should pay for it. I'm just saying I have seen this. I've seen accounts sell from 1-6 months gross income!
I've seen accounts sold for a percentage of several months gross income. An example of this might be that a lawn care customer is paying the lawn care business $200 a month for basic lawn care service. Another lawn care business might buy that account for 25% of 6 months income. In this example you could expect to get or pay $300 for the account. (25% x $200 per month x 6 months).
To me, there are three main things that matter when it comes to buying or selling lawn care business accounts -
1. Overpaying for an account.
Be careful that you don't pay so much for an account that is take too long to recover your investment.
2. What if a customer stops using your lawn care business?
There needs to be a clause in your purchase agreement that if you buy the customer and the customer stops using your lawn care service through no fault of yours that you don't have to pay or that you get reimbursed for that customer. How would you like to buy an account and the very next week the customer stop using your business?
3. The account needs to fit your business.
For instance you don't want to buy an account that is 20 miles from where you normally work. You also don't want to buy an account that you can't service professionally. If the account requires you do to fertilization, weed control, repair irrigation systems and low voltage lighting systems but you don't do any of those things, buying that account might not make sense. Along those same lines don't buy an account that is having you mow a 5 acre piece of property if your ideal client is small residential lawns. I've seen people make all of the mistakes I've mentioned above. To be honest, they were better off not buying the account in the first place.
If you will keep these three things in mind when buying or selling lawn care accounts, you'll come out like a winner!