Buying vs Starting your own
Analysing and Valuing a Round
Questions to Ask
Sales Contract etc
Truth: Purchasing A Lawn Mowing Round
Some groups within the industry are making BIG money from the selling of rounds. Unfortunately, until now no-one has been willing to bring out the problems within the industry. On many occasions there is to much money being made for honesty to come through. You will very rarely see a lawn mowing contractor being in business for a year or more buying extra customers because he has learnt about the game and plays it very well.
Customer's are Free Why Buy Them? (The Valuation method used in this example is one of a few used in this industry depending on what state you are in, please see Analysing & Valuing A Round for further details).
You then have the concern of losing customers as not everyone likes being sold. Quite often customers do not like to be treated as an item to be sold and they don't want the new contractor. Not to mention, you are not an expert and your cut might not be as good as the contractor before. The chance is that you will lose around 30 to 40% when purchasing a round. Out of the $6,000 you spent, you would have paid on around $1,800 to $2,400 for customers that aren't yours.
I achieved a client base of 40 customers in 3 months (which gave me around 60 cuts per month at an average of $20 per cut). Other work consisting of one-off jobs, included rubbish removal, gutter cleaning, long grass slashing and weeding made up a balance of my monthly turnover. I started slowly; this gave me the chance to get fit and helped me with on the job training
There is no need to buy customers, they are out there waiting for you. You must realise that lawn mowing is a growth industry, the customers are free don't buy them.
Part Time And Cash Rounds
As stated in Analysing & Valuing A Round some businesses are sold with clients "on the side" or "cashies". Due to the fact that this is illegal, it is extremely difficult for these clients to be incorporated into a contract of sale or for any legal document to be produced in support of the sale of these customers. No money whatsoever should change hands for these clients, if the vendor (seller) chooses to give you these clients free of charge and they are not sold as part of the package, you must then put these customers on your books for legal reasons and they can then be sold at a later date as part of your business.
Despite the fact that "cash rounds" are illegal many people operate businesses such as lawn mowing for extra cash income and do not declare it. This is none of our business, however, they then, amazingly, try to sell this illegal operation and in doing so offer the buyer no guarantee whatsoever. No contracts are signed, no records available. This is regrettably a major problem within our industry. What amazes me is not only do people purchase these high risk "businesses" but the sellers are asking prices equivalent to an established legitimate business.
If you would like any further information on purchasing rounds and the potential cons of doing so, please don't hesitate to contact Dean Bartorelli.
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