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Putting A Value On A Plow Customer List

Discussion in 'Bidding & Estimating' started by jayvic, Feb 26, 2010.

  1. jayvic

    jayvic Junior Member
    Messages: 2

    Looking at purchasing a list of approx 30 residential plow customers to add to my current base. All customers are pay per visit and the list would bring approx $1000 per storm. I am looking to buy the list only and need a value. Is there a standard practice, such as giving them the value of maybe 3 or 4 storms or how should I go about this? Any and all input is greatly appreciated.
  2. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,594

    That list doesn't mean sh!t. If they are under contract that's different. Don't pay anything for that list. JMO!
  3. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    tell him to stay on board , sign them up for next season,

    after that, id go with 25% of the estimated profiatblity minus expenses
  4. jayvic

    jayvic Junior Member
    Messages: 2

    I know pretty much all of the customers will come with me and I would only pay him for the ones that agree to switch. I just want to pay a fair price, not steal them, not overpay. I don't expect someone to give me their list of customers for nothing especially when they are all within a small area, good paying and repeat every year.
  5. Laszlo Almasi

    Laszlo Almasi Senior Member
    Messages: 326

    Typically, you should expect to recoup your investment in 3-5 years from a purchase such as this. That being said, you'd need to have some sort of guarantee that these customers will stay with you for that length of time. Since there are no guarantees on how many events you will ultimately end up having, I'd go with some sort of percentage of the total to pay him for the next 3 years that would equal the value of the projected "net" income from the list.

    If you get $1000 per event and have 5 payable events, your gross will be $5000. For 3 years this can gross you $15,000. Of that $15,000 you need to calculate the cost of performing the work. If you are doing it yourself then you need to pay yourself accordingly. If you will sub some out, total that as well. If your net ends up being $300 per event then the net profit of the list over 3 years can be $4,500. That is how you can calculate the value of the list. So, if the list will generate $4500 profit into your pocket over the next three years, it's going to be worth about $4500. The rest is your gravy and is all yours.

    Your net amounts will be different as I was just putting numbers out as an example.
    Last edited: Feb 27, 2010
  6. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    I have found it almost impossible to determine the actual worth of a client list, or client contract. Simply because you don't know how long you have each customer. The paper version of this is a pretty simple equasion, however the variables is what kicks you in the nuts. Big corporations are sold depending on the gross sales of the last 5 years averaged. Contracts are sold and bought all the time, but those are definate contracts. Who is to say that next year this guy decides to start plowing again, or some new guy comes in and low balls everyone to put beer in his belly? If it were me looking to purchase a client list, I would buy it over a 3 year period, and his payments will be made monthly after I collected the monies from each client. Since you are looking to be fair about it, that about the only way I can see to make this happen. Otherwise go contact each customer, sign a contract with them for a minium of 3 to 5 years, and base the price on that. You also have to remember that over a 3 to 5 year period, you will have to upgrade equipment, something is surley going to break down, and I would bet money that someone on the list will either die, or get transfered, or something will happen. Hate to be the bearer of bad news, but it's a real tough thing to put a price on. Good Luck