The Truth

Buying vs Starting your own

Analysing and Valuing a Round

Questions to Ask

Sales Contract etc

Buying A Lawn Mowing Round Vs. Start From Scratch

We recently read on an associations website that due to high advertising costs and competition they recommend the only way to enter this industry is to buy a round.  The avg price of advertising in Australia is around $44 per week.  How about we keep the 10 to 20 thousand dollars that would be used in buying a round and pay this advertising fee (remembering that you will be invoiced 4 weeks after the first ad appeared then have up to 30 days to pay).  Lets say you got only one new regular customer per week, and you cut this lawn every 3 weeks for $25. You don't do any other work but regulars, no big $ clean up jobs.  By the end of the year you will have an income of $450 per week with 52 regular customers.  

I ask you to look at the graph below and tell me how advertising is expensive?  Now I would be EXTREMELY concerned if you only got 1 customer per week.

You can take anywhere from 1 to 20 calls per week.  With an industry average conversion rate of around 75% plus once offs, you do the maths.

VERY BASIC COMPARISON EXAMPLE



Profit 1:
Working on the above scenario where you pay $44 per week advertising and receive only one regular customer per week.

Profit 2: You buy a round of 45 customers with an annual turnover of $20,000 for $10,000.

(please note that neither of the above include machinery or any other expenses this is merely an example of turnover minus the expense of getting customers)

One Year's Accumulated Profit  

  • Profit 1: $9,637

  • Profit 2: $10,020

Difference: $383 Once again you need to remember that when advertising you will receive anywhere from 1 to 20 leads per week (depending on time of year and area) with an industry average conversion rate of around 75%  you are looking at more then 1 customer per week.  Also remember that it is highly unlikely you will keep all the customers you purchased as explained above.

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