Purchasing a round - Job values

[Dave Bass]

Hi guys,

I’ve been going a few years now but I’ve never purchased a round before, but having just taken on another full timer I think it’s worth the investment. 
 

The round I’ve been offered is just a day a month and half a day EOM, it’s been valued at 3 x monthly which seems to be fair as it’s only small and a building block to canvass. It’s from a friend of a friend so I fully expect he’ll be trustworthy.

My question to you guys is how do you approach looking at a purchased if you price yourself differently in the market. I’ll be meeting him next week to discuss in more detail and look at some of the jobs. 
 

I’d say we are priced med-high for our area, selling on service rather than price, but I’m not sure how to manage a purchased round that may be priced cheaper per job? I’ve no doubt if I whack 20% straight after taking over we will lose loads, so would you take it on at a smaller margin and increase once settled or just walk away? 
 

Dave

 

[Jaygti]

Depends on how underpriced it is. If it’s really bad then walk away. If it’s 10% under then stick an extra £1.00 on every time you increase the prices, until it’s where you want it.

 Also people move, have extensions etc, which gives an opportunity to bump the price up. 
 

 3 x value is on the low side so don’t expect cracking work. 

 

[Pjj]

I would say look at every job and see what the price is like compared to how you would price it , then you can make an informed decision wether it’s worth taking the work on or not , or if it’s not to badly priced take it on and after 6 months and you have got to know the customers a bit put the price up a bit . 

 

[Dave Bass]

I would say look at every job and see what the price is like compared to how you would price it , then you can make an informed decision wether it’s worth taking the work on or not , or if it’s not to badly priced take it on and after 6 months and you have got to know the customers a bit put the price up a bit . 

@Pjj Thanks mate, that’s pretty much what I was thinking too ?

 

[Robt100]

I bought around just over a year ago now and did exactly what Pjj said.

When I bought the round the last guy hadn't put the prices up for over 20 years (and original prices were when he first started out using Trad). He also didnt clean frames & Sills. So I spent the first 6 months cleaning to my standard, giving everyone MUCH cleaner windows, and a regular clean rather than whenever he decided to turn up (which I later found out from customers could be anywhere from 4 weeks to 4 months!).

I Mentioned when we started that we were keeping prices for now but they would be going up at the start of the next tax year. Then in march gave everyone a slip with their new price - majority of customers had a 70-150% increase in price. Was expecting to loose around 50% of the customers at this point, I think I lost around 25-30% of customers, but ended up with 50% more income at the same time.

The first 6 months were hell tbh, doing a full-time round of first cleans from november through december was a killer, especially when it was pulling in less than minimum wage at that speed! But we are out the other end now and earning nicely. But I do think leaving it the 6 months gave us enough 'connection' to the customers for them to continue vs if we put prices up straight away. As its only going to be roughly 9 days of 'poor pay' before an increase at 6 months I think its well worth holding out for a bit if you do go for it.

 

[Dave Bass]

I bought around just over a year ago now and did exactly what Pjj said.

When I bought the round the last guy hadn't put the prices up for over 20 years (and original prices were when he first started out using Trad). He also didnt clean frames & Sills. So I spent the first 6 months cleaning to my standard, giving everyone MUCH cleaner windows, and a regular clean rather than whenever he decided to turn up (which I later found out from customers could be anywhere from 4 weeks to 4 months!).

I Mentioned when we started that we were keeping prices for now but they would be going up at the start of the next tax year. Then in march gave everyone a slip with their new price - majority of customers had a 70-150% increase in price. Was expecting to loose around 50% of the customers at this point, I think I lost around 25-30% of customers, but ended up with 50% more income at the same time.

The first 6 months were hell tbh, doing a full-time round of first cleans from november through december was a killer, especially when it was pulling in less than minimum wage at that speed! But we are out the other end now and earning nicely. But I do think leaving it the 6 months gave us enough 'connection' to the customers for them to continue vs if we put prices up straight away. As its only going to be roughly 9 days of 'poor pay' before an increase at 6 months I think its well worth holding out for a bit if you do go for it.

Thanks @Robt100, appreciate that 

I’m kind of fortunate I’ve got a small team now so I’ll be sending someone to do the work and I’ll go and canvass the area a bit

Can I ask what kind of value you (and the seller) put on the round, knowing all the jobs were underpriced?

 

[Robt100]

We did 3x monthly value (though with the time it took to get round doing it properly, it was probably closer to 4.5x monthly value).

 

[Yogi1872]

Hi guys,

I’ve been going a few years now but I’ve never purchased a round before, but having just taken on another full timer I think it’s worth the investment.


The round I’ve been offered is just a day a month and half a day EOM, it’s been valued at 3 x monthly which seems to be fair as it’s only small and a building block to canvass. It’s from a friend of a friend so I fully expect he’ll be trustworthy.

My question to you guys is how do you approach looking at a purchased if you price yourself differently in the market. I’ll be meeting him next week to discuss in more detail and look at some of the jobs.


I’d say we are priced med-high for our area, selling on service rather than price, but I’m not sure how to manage a purchased round that may be priced cheaper per job? I’ve no doubt if I whack 20% straight after taking over we will lose loads, so would you take it on at a smaller margin and increase once settled or just walk away?


Dave

I've took on underpriced work on a few occasions. I usually do it 3 times at the price I bought it at. That way it gives the customers a bit of time to get to know you. On the 3rd clean I usually say something like "am sure your aware the pricing here needs to catch up with the times a bit" or something similar. If they are underpriced most tend to agree and say they haven't been up for x amount of years and they know its well over due.