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To sub or buy & hire?

Discussion in 'Commercial Snow Removal' started by PerfiCut L&L, Dec 17, 2005.

  1. PerfiCut L&L

    PerfiCut L&L Senior Member
    Messages: 178

    I havnt actually sat down yet and ran the numbers but I've had a couple ideas lately as far as picking up more work.

    Right now were pretty well balance, work vs drivers & equipment. Im looking to pick up some more work and was thinking instead of just subbing it out, I might do one of the following.

    1. Buy a used truck with plow (<$5k-$6k) & hire a driver.
    - May or may not be dependable.
    - May need work
    - Might break down
    + Truck could be used in the off season for other services
    + Truck remains a business asset

    2. I have a couple people that want to plow but dont own one. So option 2 is buy a used plow and put on their vehicle, then pay a reduced sub rate until they pay the plow off. Or pay a reduced sub rate period, but the plow remains mine.
    - Cant really think of too many cons
    + If plow remains mine, not much risk/lost on this option.
    + If driver returns next season, increase pay. If not, find new driver.

    3. Buy an ATV w/plow used or new (<$6k), hire an operator. This could speed up things with my current drivers, freeing them up sooner to take on more work.
    - Large up front cost
    - Still need a driver/vehicle to transport ATV
    + ATV can also be used in off season (business & recreationaly)

    From a business standpoint which do you think would be the smart way to go. All of these options have their pros and cons, and Ive started a list already, and would like some input from you all. Obviously all of these options will need a driver so drivers pay will have to be calculated along with equipment costs and compare to probable income they would each earn to see which might be the most cost effective.

    What are your thoughts.
  2. NEPSJay

    NEPSJay Senior Member
    Messages: 270

    i think the first option might be the best.
    Too many things could go wrong with the second senerio. What happens if you buy plow for someone else and it breaks half way through season. Who is responsible for repairs? too much fingerpointing with #2.
    As far as #3. how much time would it really save?? which would be faster.... an additional plow truck or an atv?
  3. Ken1zk

    Ken1zk Senior Member
    Messages: 193

    I agree, your first option is most likely what will be the best. In addition to buying someone else a plow you have the issue of them having the proper insurance, doing the proper maintenance to the truck, etcetera.

    I can't see the ATV advantage unless you really want one and the old lady says not until she gets new furniture. :rolleyes:
  4. PerfiCut L&L

    PerfiCut L&L Senior Member
    Messages: 178

    Good points both of you, thank you.

    OPTION 2: If driver wants to own the plow, then he would be paid at a reduced sub rate, perhaps 50% of the going sub rate, until the plowed is paid off. Then it becomes his to own, and maintenance would be on him. If he doesnt want to own it, I could pay him 75% the going sub rate, and I would have store and maintain the plow. He would only use it. As for insurance, that would be on him regardless. Or I could ad him onto my rider policy, in which case he gets paid $10 an hour less, to cover the increase. This has always been my practice anyway.

    OPTION 3: WHo wouldnt want an ATV to play with anyway :waving: , but seriously, this could come in handy during the summer when we do lawn maintenante, gardening, mulch, that sort of stuff. As for time saved? I dont know honestly, since weve never used one. I figure it could save as much as 15 mins per job, by doing sidewalks, entrances, cleanups, and building perimeters. 15mins saved could equate to as much as 2hrs, which could be filled with another job or two. Again, Ive never used one so Im only going by what ive heard/read here, and how I can see using it. - Part two of option 3, the daughter would love to use it. She's been hounding me for the past 2 years, for one. Strait A's has always been the reuirement, but it never fails, theres always a "B" in there sometime during the course of the school year .... thank gawd.

    Thanks for the input, please keep it coming.
  5. frostservices

    frostservices Member
    Messages: 63

    Did you tell her theres a shovel with her name on it! Well honestly you would have to pay me really well to drive an atv with a plow on it Frezzing my butt snow blowing in my face not my idea of fun. I have seen guys running them looked to me like it`s a struggle to steer and their always bundled to the hilt,then theres always when you hit something and fly over the handlebars. But theres probbly plenty of kids out there that would love to do it (at least the first couple times) the advantage would be shouldn`t be alot of liablity with it, You could just put it in the back of your truck whoever drives it rides with you,drop the ramps have the driver drive it off and do thier thing while you plow load her back up and your ready to go! I would build a ramp with a hinge on it that folds down from the back of your truck so you don`t have to try to drive up two narrow little ramps you may need to hinge the center too so it`s dont stick up so high.
    If I had a kid that wanted to plow thats what I would do then you can be there if anything happens,good way to get um started and I know I woulda loved it when I was 16 and you can pay your kids quite a bit without haveing to worry about workmans comp and stuff I belive.
  6. cet

    cet PlowSite Fanatic
    Messages: 7,196

    Depending on the amount of hours you have for the truck I would hire a broker. It always seemed to us that our trucks with drivers seemed to break more often then broker trucks or our own trucks. You also have the maintenance, insurance, gas, repairs and some other things. Now if this truck can be used all year round, full time then I would buy another truck. A $6,000 truck would scare me a little though. I bet something breaks and maybe a lot of things. If I was going to go this route I would buy the truck early spring and run it for a few months when your time isn't as demanding and you can do without it if there is a break down. As for the ATV, they seem to be great for sidewalks but I wouldn't want to be the guy on it for hours. Unless your work is far apart why couldn't you drive it from site to site.

    If you put a plow on someone else's truck, he will most likely have some of his own plowing to do. Do you get some of the income, how do you track this? What happens if it breaks on his work? I would be more inclined to lend him the money for the plow and pay him full broker rate.

    Just my .02
  7. PerfiCut L&L

    PerfiCut L&L Senior Member
    Messages: 178

    more great points thanks.

    The way I figure to use the ATV is; have someone with a small pickup drive ahead to all the lots, hit the building perimeters, sidewalks, and entrances. That way, when the plow truck shows, all he has to do is hit the lots. THe ATV operator can do this at all the jobs. When he's done he can then, return to the beginning, and start over (if storm is ongoing) or start helping out with cleanups. Or park it and go home.

    The option of puting a plow on someone elses truck, would require them to put in full days work. (So he doesnt have free time to plow for someone else or pickup his own work) otherwise some sort of promisary note, or something can be drawn up and signed, to ensure, the driver doesnt use the plow on jobs not owned by us.
  8. Ken1zk

    Ken1zk Senior Member
    Messages: 193

    If I were to do this -
    I would definitely draw up a financing agreement between you and the sub. I would clearly state that ownership of the plow is mine until paid in fill. When you pay the sub show the deduction for "Plow payment" and "Balance Due on Plow Loan" on his pay statement. You may want to investigate a interest penalty if the plow you have financed is not available for work when you need it. Also in the agreement I would specify the insurance required along with limits of liability and you name as co-insured as far as comprehensive coverage.

    If the ATV can save you money and be used year round that is an advantage. The unit has to be used enough to justify it's expense, and it seems like that would be the case for you. However there is the issue of transporting it, and unloading it at multiple job sites. That would still make me lean toward the additional truck. Also if a truck should go down, the ATV can not operate as a replacement or backup plow truck.

    Just my opinion - Best of luck in your decision payup
  9. SnoForce

    SnoForce Junior Member
    Messages: 27

    What happened to using me as a sub? You sent me out to bid on your properties. I priced out everything for you. You said the numbers all looked good and then never bothered to call me back. What a waste of gas and time on my part.
  10. NEPSJay

    NEPSJay Senior Member
    Messages: 270

    I got burnt the same way by someone else this year too. People tell ya so much $#!^. I guess we both learned our lesson.