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buying plow accounts

Discussion in 'Business Fundamentals' started by Jay brown, Jul 7, 2006.

  1. Jay brown

    Jay brown PlowSite.com Addict
    Messages: 1,783

    any certain formula used when buying someone's commercial plow accounts? assuming that they are in good standings with business owners. what are they worth? one snow gross? the whole season gross? last ones i bought were one snow average gross.
     
  2. hickslawns

    hickslawns Senior Member
    Messages: 619

    You can't buy customers. If they are under a binding contract maybe, but there is no guarantee they will stay with you if they are not locked in via contract. I would never go one year, because what happens if they change after the contract is up? You plowed for free? I would rather buy based on a percentage of the income for 2-3 years than one year income. Maybe find someone to hold the money in an escrow account so both parties are assured to get their money. Just an idea. I bought out a guy once. Older gentleman in his 80's with failing health. Approx 25-30 mowing accounts. Problem was they were older customers that didn't like change, and even though I didn't raise prices after the first year, they still switched. Honestly I feel we did a better job, but I think the customers kept him because they knew him for years and didn't want to quit him. When he sold, many went back to doing it on their own, several died, a few moved and within 5 years I only had maybe 4-6 of the original accounts. Bottom line is this: Even if you provide a better service, people just don't like change. Be careful, and cover your butt and the person you are buying from's butt.