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Need Some Input

Discussion in 'Commercial Snow Removal' started by repo_man62, Jan 19, 2005.

  1. repo_man62

    repo_man62 Senior Member
    Messages: 502

    As many of you know, I'm moving to Michigan soon. I have 32 accounts that I have built up over the past 2 years. This season, I took on a "partner". We signed a contract stating that neither of us could accquire exsisting accounts for 2 years after the partnership dissolved, for what ever reason.Hears my question...should I just HAND over these accounts? Or should I make him give me a percentage?This is his first season plowing.
    Thanks...Bob
     
  2. jkitterman

    jkitterman Senior Member
    Messages: 140

    Do you think you will be moving back and may need these accounts within the two year period? Would you work for a cut rate? If you want a percentage, that is what you will be doing to your partners work. Does your partner have the ability to work all those accounts?
     
  3. ibelee

    ibelee Senior Member
    Messages: 188

    Input

    I'm a little confused about the "aquiring existing acounts" clause in your contract. If the partnership was to disolve, as it sounds like it will if you move to MI, then wouldn't the clause negate either of you from "aquiring" the existing accounts? Please explain the clause.
     
  4. repo_man62

    repo_man62 Senior Member
    Messages: 502

    No I won't be moving back. Probably not. And no he doesn't. It was word of mouth mainly that got these accounts. My expertise not his. I don't think I should just HAND him something I have built up.
     
  5. Ken1zk

    Ken1zk Senior Member
    Messages: 192

    I assume you will be taking your truck and other equipment with you, so what you are leaving behind is a customer list. A group of people in which you have invested your time and effort in acquiring and keeping as satisfied customers. IMO there is a value to that and I would seek 20% annual income generated.

    When I owned a franchise in the carpet cleaning business I sold my customer list to a fellow franchisee (he bought none of my equipment). My asking price was 25% of the annual income generated by the list, we settled on 20%.

    Hope this helps,
    Ken
     
  6. johntwist

    johntwist Senior Member
    Messages: 415

    I'd agree with Ken about selling your list to someone who doesn't already have it, but from what you wrote it looks like your 'partner' already has it.
    It'd be nice to think he could 'buy you out' so to say, but since he already knows all the clients it seems more likely he'll say goodbye to you and just keep plowing after you move away.
    Since I don't know either of you or your relationship, it's a tough call.
    If he's any sort of decent guy, and if you're friends, talk it out with him. I don't see why you can't come to a reasonable gentleman's agreement about it. Explain to him the value of what you've built up over time and like Ken said, it's worth something. Hopefully, he'll agree.
     
  7. repo_man62

    repo_man62 Senior Member
    Messages: 502

    Well...he doesn't know ALL the accounts...we've only had 1 plowable snow this season,which only allowed me to plow 11 of 32 accounts ,as they were the 1-3" accounts. I really appreciate you guys input. Thanks...Bob
     
  8. lawnmedic

    lawnmedic Senior Member
    Messages: 703

    If you have written contracts with your customers, get as many as possible to sign multi year extensions. Then put them up for sale at 30% of gross income, then offer them to your new partner for 20%.
    I know a few contractors that lost contracts to former employees. Employee goes in to customer during springtime, tells customer he has taken over bosses route, gets new contract signed, boss finds out late summer when he goes to get next seasons contract signed......
     
  9. JPMAKO

    JPMAKO Senior Member
    Messages: 660

    That's why I will never have a partner again. :nono:
    I think that what you should do is probably figure out a buy out price.
    Are most of your clients on Per Visit or Seasonal contracts?
    Need more info about your business and then I could probably help out.
    Based on what you have said I would think that if you sold your accounts to someone other than your current partner, You would be in breech of contract assuming this is a legal partnership. Give me some more specifics....

    Jason
     
  10. REAPER

    REAPER 2000 Club Member
    from 60050
    Messages: 2,228

    If you were moving and tried to "sell" me your accounts?

    Well ,this may be just me,but I would tell you to bite it. And then if you did not show up next year , per signed contract, I would sue you.

    Get real. Unless you plan on coming back to plow those account's next year be a decent guy and give the guy your best.

    Otherwise be ready to hold up YOUR end of the contract.