1. Welcome to PlowSite. Notice a fresh look and new features? It’s now easier to share photos and videos, find popular topics fast, and enjoy expanded user profiles. If you have any questions, click HELP at the top or bottom of any page, or send an email to help@plowsite.com. We welcome your feedback.

    Dismiss Notice

IS it right to sell your plow route

Discussion in 'Commercial Snow Removal' started by 76chevyman, Oct 17, 2003.

  1. 76chevyman

    76chevyman Member
    Messages: 46

    I was just woundering if its right to sell your plow route for money?? Isnt that illegel? I was just woundering what thats all about. Say i had a route of 16 clients for years and decide to get out and sell the route for 2,000. Couldnt the guy that wants the route go to the homeowers and get there aproval? This is all residetal. And im not selling but some people have offered me there routes this year.
     
  2. wyldman

    wyldman Member
    Messages: 3,265

    I don't think it's illegal.We work had to build our businesses and clientelle,and we should have every right to sell them for what they are worth.
     
  3. Adams plowing

    Adams plowing Senior Member
    Messages: 195

    i also dont believe its illegal. but whos to say that after you pay for the route that the people on that route are going to want to use you. I could see it happening that someone would pay $2000 for a route and then all the customers decide they want to use someone else then you being out $2000 and no customers from that route to pay it back. just sounds like it could possibly turn out as a bad deal imo.


    Seth
     
  4. NoStockBikes!!

    NoStockBikes!! Senior Member
    Messages: 215

    I would think that the risks involved would adversely affect the value... Rather than a flat fee, perhaps a % might be a less risky deal. Then he has a vested interest in getting the new customers signed up with you...
     
  5. Adams plowing

    Adams plowing Senior Member
    Messages: 195

    One other thing i happened to think of is if those clients are under contract and your buying out the contract you could run into legal problems and so could the seller if there was no provision listed in the contract that it could be sold or transfred. which probaly wouldnt be a problem till after the snow falls and they refuse to pay you because you werent the one the agreement was made with. also price differences if any from what you would want to charge incomparison to what he charged could also bring up possible issues of losing customers. imo it seems better to build your own business and you can always sollicit his customers for business and they may come to you without even having to pay him any money.


    Seth
     
  6. rdenman

    rdenman Junior Member
    Messages: 5

    It is not illegal to sell your route, but you are not really selling your route. What you are selling is your client list, and the "Good Will" that goes with it, including the assumption that all the clients will stay with the new owner.

    I run a rather large "Service Bureau" that is in some ways just like a "Snow Plow" business, in that we have nothing tangible to sell.

    I can give you 2 suggestions:

    1. If you add a clause to your agreement that is commonly referred to as an "Evergreen Clause" it will make the value of your "Client List" much greater, especially on the clients that pay you a contract price. Wherein if they break the contract they still owe.

    "This agreement may be assigned by SnowX, without prior written consent of the other party, and if assigned, this agreement shall inure to the benefit or and be binding on the successors and assigns of SnowX"

    This would really only work for clients that have seasonal or some sort of term length contract.

    2. Also, your sale price should be based upon some factor of your revenues. i.e. if you plow snow on average of 4 months, and your revenues average to $5000 per month, you should arrive at your sale price as some factor or percentage of the sale price. i.e. $5000 x 1.5 = $7500.

    Good Luck.


    Bob
     
  7. 76chevyman

    76chevyman Member
    Messages: 46

    Thanks for the advice guys it was much help. ANd to my other post Am i chargeing to much i got the contrat even though the other guy underbidded me by 600 dollors and the cut me a cheak for this session and they signed a 3 year contract SO thats for all your help guys
     
  8. Adams plowing

    Adams plowing Senior Member
    Messages: 195

    Good luck with the account It sounds like quality service prevaled over the other guy lowballing you.

    Now we just need the snow to fall payup
     
  9. micah79

    micah79 Senior Member
    Messages: 303

    76chevyman

    Glad to hear it worked out for you.
     
  10. Strongmd

    Strongmd Member
    Messages: 43

    There is nothing wrong with selling or buying a residential route and there are a bunch of ways to do it. One important factor in how smoothly it will go is how you provide your service relative to how the previous owner did. As long as it is the same, or better, for a comparable price, you should be ok. Everyone does things a little different and you don't want to rock the boat immediately. I bought 100 accounts 3 years ago, 30 last fall, and another 65 just last week. With these 65, the guy has had most of them for 30 years. He's 70 years old, has been doing them with a tractor, and wasn't charging nearly enough. However, it's only a 3 mile long route and all 65 are w/in my current route range. I've offered him $X up front, no strings attached, for his whole customer list, and his referral, OR, $X per account retained as of March 1st. My service will be better, my pricing higher, but I can't do what a tractor does, however there's no one else around here using a tractor. With the 100 accounts I purchased, we dealt with it as a merger of two companies, touting the better service by merging our routes. Then the following year, I took it over. That worked very well. Didn't give anyone an opportunity to question what was happening. 3 years later I have 90 of the 100, plus many add'l neighbors. I consider the 10 lost accounts due to different business practices.