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Looking to Retire

Discussion in 'Business Fundamentals' started by Plowman36, Feb 20, 2006.

  1. Plowman36

    Plowman36 Junior Member
    Messages: 5

    I've been plowing residential in the NNJ area for 23-years with a full sized Bronco with a 7.5’ plow. I have about 17 solid accounts and earn approximately $1,000 per storm (up to 12"). I've had most of these customers for 20+ years. It takes me about 4-hours to do the route and door to door mileage is under 20-miles for the each snow event.

    I'm thinking about retiring and selling my business.

    How much should I ask for the route?

    Is anyone here interested?

    Plowman36
     
  2. mike33

    mike33 Senior Member
    Messages: 335

    Bobcatservice

    I always wondered how that would work. I knew a younger person in my area decided to quit plowing and had his accounts for sale. I never got the details but wondered how you would go about that. For example im a store owner and you did my service for 15 years and this new guy walks up and says i bought joes plowing service and will plow your snow! Me the owner might say bull **** and say ill get someone else. Then you might of sold 20 accounts and the buyer was only able to retain 12 , what would happen. Im not critizing just wondering how a person like your self that has done this bus. for many years could pull this off. Please let me know how it works.

    mike
     
  3. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

  4. mike33

    mike33 Senior Member
    Messages: 335

    Bobcatservice

    Mick,
    people really pull this off? In my area the owner would just get someone else. or what happens i sell my accounts to you and owner says i got Jane Doe?

    mike
     
  5. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    The key is having multi-year contracts. The buyer is paying for what is contracted. Generally, the buyer will only pay for those who stay with him - basically honoring the contract. If the contract has fewer than two years remaining, then obviously it's not worth as much. As for - Do people actually do this(?), yes, but it's usually larger companies. In the case that the "owner" says "Sorry, I got Jane Doe" then it is breaking the contract and those provisions of the contract would apply. It's the company providing services, not the individual (you). I buy the company and the company is still providing services. The contract is still in force. Another option, in the absence of contracts, is offering to give you a certain price for any existing customer who stays with the buyer for a certain period of time. But, in this case, you wouldn't necessarily being buying the business - just taking over the customer base. This is where a business name is of importance. My business operates under the name of "Mick's Snow & Ice". Now if I want to sell the business - I would have a rather hard time unless someone thought they could capitalize on my name. Not likely, so I'd probably just be able to sell the tangible assets - equipment. Now, if I was "Mainely Snow & Ice" - that'd be a different story.

    Now if your talking about just selling your equipment and your route list - that's a different story. I might offer to buy your equipment for about for about half of what it Blue Book's for and about half the new price for plows/sanders etc in good condition. I might give you $5 or $10 for your route list just to get first shot at them. But I'd want to have a good idea that you're really getting out of the business.
     
  6. mike33

    mike33 Senior Member
    Messages: 335

    Bobcatservice

    Mick, Thanks for your reply that was intersting. Im among the largest contractor in my area which is rather a small area. I have around 30 commercial accounts and basicly except for 2 have the personel contact with managers or owners. For example i have our local Staples which im sure your familar with for the last 10 years they been here. However, the last 4 years instead of working for Staples corporate i know work for the guy who actually owns the property and is a local person. He would **** if i sold the contract for plowing to some one else and remind the new guy that he is in charge of who plows his lot. This would hold for most in my area since it is a small town usa.

    mike
     
  7. NJ Plowman

    NJ Plowman Senior Member
    Messages: 799

    Where in NJ are you? PM me...
     
  8. JPMAKO

    JPMAKO Senior Member
    Messages: 660

    Pm me too I may be interested in working something out with you dependeing on the location of the accounts.


    Jason