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Newbie trying to buy accounts

Discussion in 'Introduce Yourself to the Community' started by PilotSC, Dec 6, 2003.

  1. PilotSC

    PilotSC Junior Member
    Messages: 4


    I am currently in the irrigation and lawn care industry in St. louis, MO. I have an opportunity to buy my way into the snow business.

    1 '79 ford bronco with a new motor with 2,000 miles and just 50,000 total miles. Looks in excellent condition, he just used to plow. 4 X 4. Myers 7 1/2 foot plow.

    4 accounts billed at just about 1,000.00 total for a 1 to 3.99 inch snow for snow and salt, plus 75 per hour for extra plowing.

    The owner is a helluva nice guy who is willing to help me get started and teach me the tricks of the trade. Not just a sign and see ya deal. That means alot to me who has never plowed.

    He says he billed these customers about $10,200.00 last year which was a little more snow than usual here in St. Louis.

    I should also be able to secure some of my current lawn customers (I'd say safely 5 or 6) to add to this. Also, I would imagine if I do a good enough job there may also be some lawn business that could come out of these accounts.

    What do you pros think? Any advice would be appreciated.

  2. Highpoint

    Highpoint Senior Member
    Messages: 241

    Give a price range for purchase or just tell us.

    If you only gotta pay the guy 2 grand, do it. If you gotta pay the guy 10 grand, don't.

    Need more info.
  3. PilotSC

    PilotSC Junior Member
    Messages: 4


    Sorry, $16,000.00.

    8 grand up front, monthly payments of 1000.00 starting in March for 8 months.

    Thats for truck, plow, and accounts. BTW, commercial accounts if I didn't say.

  4. Grshppr

    Grshppr Senior Member
    Messages: 268

    He wants way to much for that business. Its only really worth what the truck and plow are worth.
  5. Grshppr

    Grshppr Senior Member
    Messages: 268

    For $16000 you can buy a way newer truck and plow, and advertise enough to get 1,000 worth of per time contracts. At 16000 it would take you years to pay that off and make any money on it.
  6. Highpoint

    Highpoint Senior Member
    Messages: 241

    I agree, Buy a truck and plow and start with your own lawn/landscape customers. That truck and plow is not worth more than 4 grand if that.

    Your current accounts can be the ones that take you to the next level. If you do good work, they will be the ones that refer business to you. Good Luck
  7. PilotSC

    PilotSC Junior Member
    Messages: 4

    Thanks for the advice. It is appreciated.

    What would the accounts be worth if purchased by themselves?
  8. Highpoint

    Highpoint Senior Member
    Messages: 241

    Why purchase them? The ONLY way they are worth any money is if there is an actual written contract specific a term, price, etc.

    Even then, there is no way to guarantee that the purchased accounts will stay with you. There is a cancellation clause. They can just go somewhere else when they want.

    Your best bet is to get the accounts on your own based on your own work ethic.

    You will have to decide to go behind your friends back our just decline and go get different accounts. :salute:
  9. greensideup

    greensideup Junior Member
    from Ohio
    Messages: 10

    Maybe things are a little different in the plowing biz, but I like to keep the 30% rule when buying a going biz.

    30% based on a two or three average of gross sales, handle any equipmnet seperate

    And always get a "NO COMPETE AGREEMENT" for at least two years. You dont want him coming back on ya and getting his customer base back.

    So with that I would be looking at 3K to 4K.

    Just my thoughts.
  10. sbrennan007

    sbrennan007 Senior Member
    Messages: 350

    I agree with all the others here as well. Buy yourself a nice MUCH newer truck with a plow and get your own accounts.

    I'm sure the guy wanting to sell you this is a "nice guy", but that is way too much money for what you would be getting.

    Even if you had a great snowplowing year, without any other expenses, it would still take you years to recover the cost of this.

    Then what happens if the accounts decide to go someplace else? Happens all the time, and you'd still have to pay this money to him.

    Trust the advice of the people on this site, they wouldn't steer you wrong on a decision like this.
  11. Big John

    Big John Junior Member
    Messages: 18

    I'm new to both this site ands snowplowing. I recently bought a '90 Dodge in very good shape to add to my exsisting property maintenace business. The truck came with 21 mixed residential and commercial accounts. I paid $3500 hundred. Lost a few customers in the transition but still came close to paying for the truck with the storm we just had in the northeast.
  12. PilotSC

    PilotSC Junior Member
    Messages: 4

    Thanks Guys

    I have talked to the guy and let him know that I was interested but not at that price. I also let him know that I wouldn't be in the market for his truck either way.

    I have a 2500 Chevy HD that I plan to put a plow on and a salter. Any tips on that? Also, this same guy told me that he would be interested in me subbing out these lots at 60 bucks an hour. Sure, it would be better if I owned them, but to gain experience and know how this might not be a bad way to go.

    Once again, you guys helped me make my final decision and the way it sounds I probably owe you all a couple of beers. Anytime in St. Louis let me know.

    Thanks a ton.

  13. naturalgreen

    naturalgreen Senior Member
    Messages: 404

    I would say it is worth about half what he wants.
    I have chevy 2500hd and 8 ft meyer lot pro on it this year
    hold nice turns fast and good commercial construction.
    If you need help bidding or get too busy and need some help
    email- naturalgreenlawncare@gmail.com.
    Good luck remember experience is the best teacher when it comes to plowing.
  14. naturalgreen

    naturalgreen Senior Member
    Messages: 404

    oh and definately get a signed contract from customers and no compete for him unless guy is your brother, not if he is brother in law
  15. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    I wouldn't pay a DIME. If he gets out of the business the accounts will be open for bids to anyone.
  16. 042500hd

    042500hd Senior Member
    Messages: 251

    In your situation. New to the industry no accounts, it'll be much better for you to sub. It'll give you the chance to see what it's all about without the added responsibility of dealing directly with the customer. You'll also come much closer to the break even point money wise when all your dropping is a few $k for the plow.