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  #21  
Old 11-19-2012, 11:08 PM
peteo1 peteo1 is online now
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Originally Posted by ducaticorse View Post
Forgive me if I understand this agreement wrong. But, you just wrote that you're giving your buddy a free loan, with zero percentage of net profit, and after he pays it off, you have no vested interest in this endevour. There shouldn't be ANY arguments from your buddy on this one because you just financed an entire business for him at zero cost to him, and absolutely zero profit to you.....
Glad I wasn't the only one thinking this.
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  #22  
Old 11-20-2012, 01:00 AM
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Wilnip Wilnip is offline
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Sounds like he is going to be putting a lot less time in the business than his friend. Maybe this seems fair to both of them? How much interest do you think he will get off of $5k anyway?

Last edited by Wilnip; 11-20-2012 at 01:22 AM.
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  #23  
Old 11-20-2012, 06:32 AM
ducaticorse ducaticorse is offline
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Originally Posted by Wilnip View Post
Sounds like he is going to be putting a lot less time in the business than his friend. Maybe this seems fair to both of them? How much interest do you think he will get off of $5k anyway?
It's more about setting up and structuring healthy business practices rather than the amount of interest accrued. I do get what you're saying though.

This whole deal sounds like he's just doing his friend a favor anyway. He hasn't stated where he actually benefits from this set up financially yet. He's paid for everything, and is only getting paid back what he owes on the truck with zero interest.

Correction, his benefit is getting his three rental properties plowed for free.
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  #24  
Old 11-20-2012, 07:03 AM
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Originally Posted by DesMoines2500 View Post
I was thinking of pulling my initial equity out as a sort of partner draw over the next two years. The tax and payout aspect is definitely the greyest area for me. Over the years of running my rental property business I've gotten a handle on taxes so I'm sure I can learn the relevant tax steps for this LLC as well.

Luckily this this is one of my best friends (best man at wedding etc...) and we won't have any arguments over money... famous last words I know. We both fully understand that I'll be getting my money out over the next 2 seasons. Once the truck (and all my other out of pocket expenses) is paid off, I'll be signing the truck over to him. So basically, he's pocketing all the money he makes because I'll be paid and the truck will be his. It's a sweet deal for him an he knows it. We came up with this whole plan after about 12 beers each, so he's probably just surprised that I actually followed through buying the truck and setting everything up.

As far as catastrophic failures go it's a built 2500, so it's pretty tough but "if he dies, he dies". Experiment over, I'm not sinking anything more into this endeavor this year. There's definitely going to be a fair amount of just dumb luck needed, but so far, everything is going well. Plus, I need a truck throughout the year for rehabbing rental houses anyway, so there are uses for the 2500 in the off season.

And PS, I'm making HIM buy the cutting edge for that blade, he needs to put some skin into this...

What could go wrong!
Let me tell you a little story about what can go wrong.

Once upon a time, I had a best friend (also the best man in my wedding) my wife and his wife were best friends( marton of honor in our wedding) Thier first born child is our godson... I think unless that type of thing can be reversed, then he is probley not anymore. We did everything togther. I plowed for his wife's company for years. I was their lead guy. I even dumpped a bunch of my own cash into a shop that was built on his property.

Then one day when I created an incorpration to protect my assets (much like yourself) and started looking for my own work.

Little did I know that this was going to create a HUGE problem. Then shortly after that, I got accused through the grape vine of stealing a set of truckside plow pockets out of the shop. Believe it or not, this pissed me off and I am still bitter about it to this day. I am not the kind of person who steals from their best friend, and I am not in a financial state to need to steal $192.50 worth of plow pockets.


I no longer plow for them, go to the shop, or really speak to them unless we meet at a store or at a wedding, then there is ackward small talk.

Looking back whould I have gone out on my own again... (money wise) 100% yes. (in terms of friends) no. It sucks loosing your firends. Especially when you loose your best friend, and because of your own personal business decisions, you have to watch your wife loose her best friend over the whole deal.

I can tell you other stories of partnerships that have gone wrong too. I have watched it happen time and time again over the years.

All I can say is, get somthing in writing while spirts are high. The second that one or the other starts feeling used or abused, the whole best friend thing will start to break down, and somthing will get used against somone. It is a terrible domino effect.

I don't mean to be a downer on the whole situation, but I guess you asked.

Also....$55/hr???????????? You should be ashamed of your self. This is the reason that the whole snow plowing industry is not worth a sh*t anymore.
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  #25  
Old 11-20-2012, 07:57 AM
DesMoines2500 DesMoines2500 is offline
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Originally Posted by Wilnip View Post
Sounds like he is going to be putting a lot less time in the business than his friend. Maybe this seems fair to both of them? How much interest do you think he will get off of $5k anyway?
This is correct, it is basically a loan since once I'm paid back the truck is his. There's some risk for me, but it's only $5000 and the equipment should maintain it's value over the next 2 years so even that's minimal. Maintenance is built into our agreement

My career is software development but my main side business is rental properties, 3 duplexes. Those just happen to be about the two hottest areas of the economy right now so laying out $5000 to help a buddy, and getting my rentals plowed in return doesn't seem like a bad deal all around. What's 3 driveway plows every storm anyway? $120. There's my interest! That's how I passed it with my wife anyway.

Like I said in the OP, between his seasonal construction schedule and heavy equipment experience and my rentals plowing just seems to fit perfectly. I just had to make sure to do it right and protect my other assets.

And yes, I'm terribly sorry for destroying the plowing industry nationwide by accepting $55 an hour. Did I mention we're rookies just looking for contracts and experience? At least I didn't take the $45 an hour offer! What do you think is fair? $65? $80?

Last edited by DesMoines2500; 11-20-2012 at 08:19 AM.
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  #26  
Old 11-20-2012, 08:33 AM
BPS#1 BPS#1 is offline
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Whats fair? Many guys get north of $100.





As for the horror stories of not getting it in writing.
I've got stories too.
One of them got so bad and ruined so many friendships ....... because they had nothing in writing.
The case went to court, lots of judges and finally all the way up to the state supreme court. It was really dirty.
Cost a whole lot of good money to feed the lawyers, money that could have been used to a better purpose else where.
A "friend" can often screw you faster than some joe blow when there is money involved.


GET IT ALL IN WRITING!!!!!!!!!!!!!!!!!!!! Its only smart.
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  #27  
Old 11-20-2012, 09:25 AM
Laszlo Almasi Laszlo Almasi is offline
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Quote:
Originally Posted by Philbilly2 View Post
Let me tell you a little story about what can go wrong.

Once upon a time, I had a best friend (also the best man in my wedding) my wife and his wife were best friends( marton of honor in our wedding) Thier first born child is our godson... I think unless that type of thing can be reversed, then he is probley not anymore. We did everything togther. I plowed for his wife's company for years. I was their lead guy. I even dumpped a bunch of my own cash into a shop that was built on his property.

Then one day when I created an incorpration to protect my assets (much like yourself) and started looking for my own work.

Little did I know that this was going to create a HUGE problem. Then shortly after that, I got accused through the grape vine of stealing a set of truckside plow pockets out of the shop. Believe it or not, this pissed me off and I am still bitter about it to this day. I am not the kind of person who steals from their best friend, and I am not in a financial state to need to steal $192.50 worth of plow pockets.


I no longer plow for them, go to the shop, or really speak to them unless we meet at a store or at a wedding, then there is ackward small talk.

Looking back whould I have gone out on my own again... (money wise) 100% yes. (in terms of friends) no. It sucks loosing your firends. Especially when you loose your best friend, and because of your own personal business decisions, you have to watch your wife loose her best friend over the whole deal.

I can tell you other stories of partnerships that have gone wrong too. I have watched it happen time and time again over the years.

All I can say is, get somthing in writing while spirts are high. The second that one or the other starts feeling used or abused, the whole best friend thing will start to break down, and somthing will get used against somone. It is a terrible domino effect.

I don't mean to be a downer on the whole situation, but I guess you asked.

Also....$55/hr???????????? You should be ashamed of your self. This is the reason that the whole snow plowing industry is not worth a sh*t anymore.

I agree 100% and will never ever have a partner situation ever again.
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  #28  
Old 11-20-2012, 09:30 AM
Laszlo Almasi Laszlo Almasi is offline
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Originally Posted by DesMoines2500 View Post
And yes, I'm terribly sorry for destroying the plowing industry nationwide by accepting $55 an hour. Did I mention we're rookies just looking for contracts and experience? At least I didn't take the $45 an hour offer! What do you think is fair? $65? $80?
I won't even drop my blade on the ground for those amounts if it's just pay on each job site where you do not get paid in between for transit. If I'm subbing for someone (and I do) I get $85/hr. The clock starts running as soon as I show up and doesn't stop until we're done.

And those little clauses you may not see like the ones about you being responsible if your truck fails. It doesn't matter if they already have enough trucks to fill in if yours fails. The fact that you will most likely be given a specific route will be the problem. If your beater fails and they have to send someone else out to remedy the route you were given...guess what? You're going to lose your arse and they will actually make money off of your trucks failure over and above if they have such a clause. I've handed contracts back to companies and just walked away from them while they stood there for just that. They needed me but yet were willing to stick it to me if something happened?

And $55/hr? No thanks.
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Last edited by Laszlo Almasi; 11-20-2012 at 09:36 AM.
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  #29  
Old 11-20-2012, 10:50 AM
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Meezer Meezer is online now
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Quote:
Originally Posted by Laszlo Almasi View Post

And those little clauses you may not see like the ones about you being responsible if your truck fails. It doesn't matter if they already have enough trucks to fill in if yours fails. The fact that you will most likely be given a specific route will be the problem. If your beater fails and they have to send someone else out to remedy the route you were given...guess what? You're going to lose your arse and they will actually make money off of your trucks failure over and above if they have such a clause. I've handed contracts back to companies and just walked away from them while they stood there for just that. They needed me but yet were willing to stick it to me if something happened?
Yeah, those pesky little clauses can cause you to lose quite a bit of money. Another thing to look for is the "We'll pay you after our customer pays us"

I
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  #30  
Old 11-20-2012, 10:56 AM
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The only thing I'll comment on is the $55/hr. Think of it this way - 12 hr "event" will gross $660, then subtract your fuel/ins/etc from that and what does it leave you with? Then you need to split that into your thirds that you have setup on page 1. After 12 hours of plowing, your friend won't be thrilled with a $100 paycheck or possibly less.

Other than that, I think you have a decent grip on your situation and the friend situation can go south if you let it.
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  #31  
Old 11-20-2012, 10:56 AM
ducaticorse ducaticorse is offline
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Originally Posted by BPS#1 View Post
Whats fair? Many guys get north of $100.





As for the horror stories of not getting it in writing.
I've got stories too.
One of them got so bad and ruined so many friendships ....... because they had nothing in writing.
The case went to court, lots of judges and finally all the way up to the state supreme court. It was really dirty.
Cost a whole lot of good money to feed the lawyers, money that could have been used to a better purpose else where.
A "friend" can often screw you faster than some joe blow when there is money involved.


GET IT ALL IN WRITING!!!!!!!!!!!!!!!!!!!! Its only smart.
$100 an hour to sub? Where do I sign up?!
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  #32  
Old 11-20-2012, 11:16 AM
jasonv jasonv is offline
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Originally Posted by plowguy43 View Post
I'm assuming you didn't read any of the OP's posts. Every question you asked (at least the relevant ones) were answered.

Good Luck this season, you really don't need a large investment or $50k brand new truck to plow snow. I learned that after a few seasons and have been enjoying a much higher profit margin with my (reliable) paid off truck/plow.
Not a SINGLE ONE of those questions were asked in OP's post, hence why I ASKED THEM. Perhaps YOU should read. At this point in the conversation, most have finally been addressed... and it isn't looking good.

Last edited by jasonv; 11-20-2012 at 11:26 AM.
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  #33  
Old 11-20-2012, 11:21 AM
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Wilnip Wilnip is offline
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Originally Posted by plowguy43 View Post
The only thing I'll comment on is the $55/hr. Think of it this way - 12 hr "event" will gross $660, then subtract your fuel/ins/etc from that and what does it leave you with? Then you need to split that into your thirds that you have setup on page 1. After 12 hours of plowing, your friend won't be thrilled with a $100 paycheck or possibly less.
Your math is way off. Insurance/etc are fixed costs. If they have 50 plowable events this year, the "fixed" cost per hour will be way different than if they only have 5.

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$100 an hour to sub? Where do I sign up?!
Im so glad you said that. Top dollar rate in my area, what 2 local contractors charge their customers is $69/hr. You guys need to realize that what you "say" you can get in your area is far different from other areas.
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  #34  
Old 11-20-2012, 12:07 PM
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Not a SINGLE ONE of those questions were asked in OP's post, hence why I ASKED THEM. Perhaps YOU should read. At this point in the conversation, most have finally been addressed... and it isn't looking good.
As I stated, the relevant questions were answered.

Quote:
Originally Posted by Wilnip View Post
Your math is way off. Insurance/etc are fixed costs. If they have 50 plowable events this year, the "fixed" cost per hour will be way different than if they only have 5.



Im so glad you said that. Top dollar rate in my area, what 2 local contractors charge their customers is $69/hr. You guys need to realize that what you "say" you can get in your area is far different from other areas.
Not necessarily off, I was tossing out a simple example. Regardless of fixed cost or not, it is a cost that will be deducted off of his hourly rate. I was trying as simply as possible, to show the net amount off of a single storm after multiple hours of work. The take home for his friend isn't much when they figure their 1/3 split.
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  #35  
Old 11-20-2012, 06:27 PM
peteo1 peteo1 is online now
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No but it won't take much to pay off 5k. Besides, I'm more interested in where it is you guys are making north of $100/hr. Around here I know guys that make anywhere from $45 up to $75 an hour depending on the rig they have.
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  #36  
Old 11-20-2012, 07:07 PM
BPS#1 BPS#1 is offline
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No but it won't take much to pay off 5k. Besides, I'm more interested in where it is you guys are making north of $100/hr. Around here I know guys that make anywhere from $45 up to $75 an hour depending on the rig they have.




I'd not bother buying my own plow for that.
I'd just drive for some one.


At $75 I can see it starting to make sense.

Under that.......... I'd question if they understand their expenses and what it'll cost to repair/replace their equipment.

I'm not the cheapest guy around, but the guys that only charge $75 an hr are major milking the clock.
Or so my customers tell me.
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  #37  
Old 11-20-2012, 10:44 PM
peteo1 peteo1 is online now
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I'd love to start at $75 and go up but the market here doesn't really support it. Some guys I know get that but they are few and far between. Our market is saturated with guys that have $40,000+ trucks and plow for $45/hr. I just can't figure out how they make it. I do much better than that and I still feel like there is room for improvement as far as the pay scale goes. Although unlike most guys here, I stick to residential. I plow one commercial lot and that's it. I like the residential bit. Everyone wants to kill each other for commercial, and that's fine for them, but I'll stick with where I make good money.
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  #38  
Old 11-20-2012, 11:43 PM
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There are places where a pickup can get $125 an hr. (not sub)
Plus salt/sand.
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  #39  
Old 11-21-2012, 01:19 AM
ducaticorse ducaticorse is offline
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There are places where a pickup can get $125 an hr. (not sub)
Plus salt/sand.
Those rates are great wherever planet you are from... I live and was born and breed in Boston, and if a guy in a 3/4 pickup asked for 125, we'd just laugh our asses off at him and send him on his way. My Komatsu 120 works in Boston and is set up with a 12 ft box and gets $125 an hour. One tons get 65-85 with a sander plus material. I don't know what your COL is out in Wyoming, but it seems high as a kite. You live in a different world than the rest of the US, because NO ONE gets $125 an hour in a ******* pick up truck lol. I'd like to see that on paper. I call MAJOR BS on your numbers......
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  #40  
Old 11-21-2012, 05:56 AM
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I have had $120 offers in a pickup before. They are in downtown chicago. That is why I have never had any interest in them. That is to far for me to travel in the snow and I don't even go into the ciry for... well... anything.

It all depends on the area that you are in, the amount of work total snow work possible, and the number of guys that are willing to do it for nothing. Supply and demand is what drives the pay for the industry.
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