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Truck with Contracts?!

Discussion in 'Commercial Snow Removal' started by hillworks7669, Jan 20, 2003.

  1. hillworks7669

    hillworks7669 Junior Member
    Messages: 24

    Looking through paper today and found 1992 3500 Chevy with 6.5 diesel and 9`2 Boss V with contracts. Called him up truck has brand new GM engine and tranny 1.5 years ago. He says he has 50 accounts that bring in over $4000 per push. The catch is he is 45 miles away from my hometown. He wants $15,500 for everything. I think it is a no brainer if I can find subs in that area. Truck is showing 190,000 miles on odometer. I want some serious feedback on this (you too JAA) give me your pros and cons(and don`t hold back).

    Thanks in advance

    P.S. Snow forecasted for wednesday possibilities on Fri,Sat and Sun. :drinkup:
  2. BRIMOW525

    BRIMOW525 Senior Member
    Messages: 259

    Well #1 its going to take 4 events just to pay for the truck. #2 190K on the odometer is for the body, so who knows about the bearings, rear end, frame, steering ... etc. New tranny and motor is great BUT there is still alot of miles on the rest of the truck. Now if u do this and sub it out... it'll take longer to recoupe your money and then start to profit from it. Do you know any good subs in that area? If they screw up(or don't get up) are you free enough to ride 45 miles and do the jobs yourself. Do the customers have contracts? I'm imagining that 50 clients means mostly residential. If you do do this deal, I would STRONGLY recommend a no compeat contract. Me , Iwouldn't do it. I don't think that the truck is worth too much with all the miles. Who knows if the customers will stay with you after the deal.
  3. Kent Lawns

    Kent Lawns PlowSite.com Veteran
    Messages: 315

    $4000 per push with 1 truck?

    What, is that a 20 hour route?

    Frankly, something smells a tinge goofy.
  4. fastjohnny

    fastjohnny Senior Member
    Messages: 653

    Lets just say truck and plow worth bout 5-6 grand, so your paying nearly 10,000 for his clientel.

    That being the case, I'd say there aughta be some bargaining room on the price.

    Sounds like he's got quite a route lined up.

    If your interested, offer him a decent price for the truck, plus maybe a grand, and a note to give him the next plowing gross profit, or whatever it takes to pay off the agreed value of the business.

    I think it would be pretty risky to pay that much for contracts. Let him prove his contracts worth by accepting these terms of future payments following the next storm.
  5. Grshppr

    Grshppr Senior Member
    Messages: 268

    I'd ask for financial records to back up the $4000 per push claim. That seems high, I wish I was making $4000 with each of my trucks. Either he is embellishing this, or he had a very long route. Other wise it seems like a good buy, if you can get a sub to do the route for you. Good luck:)
  6. mike9497

    mike9497 Senior Member
    Messages: 466

    190,000 no way not in a million years.more like 290,000.i would have him show you all the contracts and prices for each.then maybe i would think about giving him 3,500
  7. windmill

    windmill Senior Member
    Messages: 224

    I like what fastjohnny said, leave some onus on him. If he's willing to take the price you shake out have himalso agree that it will be paid out of a percentage of the future plows for this season. He shouldn't have a problem if he is confident that his clients are faithful and you can assure him that your work will be as good as, or better, than his. Good Luck.
    Why is he selling though?
  8. Sno

    Sno Senior Member
    Messages: 320

    Lowballers are eating away his clientel.......

    I would bet that is the real reason.

    By the end of the year he may have none.

    Just with change in ownership, they will all probably requote.

    Just something to think about.

    I would be willing to bet you would end up with about 3 customers by the end of the year.
    Last edited: Jan 22, 2003