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Bad choice to bid? possibly lose all profits? Tough one..

Discussion in 'Commercial Snow Removal' started by Greenscape USA, Oct 18, 2011.

  1. I have the opportunity to take on an account, that is a little over 100acres, plowable. Contract is a pretty decent size, i was very competetive with my bid but theres one problem. the company is in debt to their loan company 160million (i believe) after all their new improvements and remodeling on the inside of the building to attract more people. Yeah it sounds like a lot of money, but at the same time, the place isnt anything small. There was stories in the local newspaper a few months back about how the venue was up for sale and POSSIBLY filing bankruptcy. I'm worried that if my company gets this contract, we have the chance to either make quite a bit of money or, lose it all if they decide to not pay.
    what could really happen here? What if they dont pay? Is there any type of guarantee for the money? what if they sell to someone else? I dont think it would happen and be able to finalize within the next 6 months, but its just a thought. confused with this one...

    MIDTOWNPC PlowSite Veteran
    Messages: 4,556

    100 acres? really :eek:
  3. framer1901

    framer1901 Senior Member
    Messages: 852

    Express your concerns with someone higher up at that property - write a contract placing the full contract amount into an escrow account and draw from that weekly or monthly - money will be a bit more protected. Have your attorney draw the contract up though.
  4. my bad, a little over 100 acres, about 115, and all of it is not plowable. about half is plowable. the other half is building haha.
    but as far as drawing up the contracts even better, if they chose not to pay me one way, wouldnt they just do the same thing the other way? (if that makes sense)
  5. thelettuceman

    thelettuceman PlowSite.com Addict
    Messages: 1,218

    Get some money up front. If they refuse, they never intended on payin' anyway. Run don't walk from this account
  6. I did consider that, believe it or not. I almost wanted to do something like what we do for a lot of jobs throughout the summer. just half upon signing (which would cover all costs) and then the other half at the end (which would be all profits).. but I wouldnt like that too much, so maybe half upfront then the other half divided up and get a check at the begining of every month?
    But then again, you have to think...put yourself in their shoes. Some random contractor is coming in with a bid for your complex, saying that they want you to give them quite a bit of money upfront, and you don't know what their work is really going to be like and if they're just going to take your money and run. you know?
  7. also, has anyone else ever recieved money upfront?
  8. sectlandscaping

    sectlandscaping Senior Member
    Messages: 315

    thats a tough one.... Whats the chances the company can make the money back?
  9. id say pretty good, most of their outdoor stores are occupied. theres maybe 3 open spots out of 20. and as far as indoor, thats another story. about 60 percent occupied. but its still a pretty big number that theyre generating
  10. pooleo8

    pooleo8 Senior Member
    Messages: 271

    if they dont pay, you dont service the job. Simple as that. Maybe a per month payment arraignment. Just something that if they do not pay, you may only eat a month of service, which sucks, but better than eating the entire season
  11. very true there, but the only downfall is that the equipment that i rent seasonally. i have to comit to 5 month contracts, at 3-6000 per month per machine, depending on what it is...that ads up fast. especially if i dont have money coming in from them
  12. sectlandscaping

    sectlandscaping Senior Member
    Messages: 315

    Thats what several people did on here to get paid from the Nationals. Threaten to stop service and at the next event if the money isnt there walk. The majority seemed to get paid like this till the threat of more snow passed.

    You could try a deposit and payments due on the first of every month. That might help a bit. I think if you win the bid the payment terms shouldnt be to big of a argument.
  13. I did read quite a few threads about getting money from the national companies and how much of a hassle it is, but i guess some people do what they have to do in order to have the money in their hands. But then again, i agree that if the contract is mine they shouldnt have any problems with the payments and how i make them.
  14. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Just because the places are rented out doesn't mean they are making money. Since you don't have a lien on the property and something happens you'll be on the bottom of the creditors. As for money in escrow, if something happens they could lock it up and you still might not get anything.
  15. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    NEVER take on any one account that could sink your company.....Let this one go
  16. Pennings Garden

    Pennings Garden Senior Member
    from VA
    Messages: 242

    I would see if the can pay you twice a month instead of monthly with net 15 terms. I would discuss these concerns with you rental/leasing company, this would not be the first time they have to deal with equipment coming back early due to somebody loosing a account, they might have a system set up that you can buy of the rental contract similar to buying of a cell phone contract

    Asking them to put the money in escrow is most likely useless, they probably don't have the full sum up front any way, you might be able to get the last month of the contract in escrow, but not more then that.
  17. Matson Snow

    Matson Snow PlowSite.com Addict
    Messages: 1,985

    You can put all the verbage you want into a contract......Once they the file for Bankruptcy that is a whole different can of worms......You become a Creditor and you get into a Long line of Creditors.....

    If there has been articles in the Paper about this companys finances chances are they are in Trouble.......My 3 cents is i would not do it..Tough to walk away from 100 acre account...But, even tougher to Not Get Payed for that 100 acre account....
  18. dfd9

    dfd9 PlowSite.com Addict
    Messages: 1,475

    Can you afford to stay in business if you don't get paid?

    As for bankruptcy, you will be an unsecured creditor, so recovering money that is owed is a crap shoot.

    MIDTOWNPC PlowSite Veteran
    Messages: 4,556

    one of my worst customers became my best.
    he was always late to pay... he caught up and next season I finally told him he had to prepay.
    he has prepaid for 4 years now...

    make them prepay.
    don't trust someones work either, they could be on the chopping block.

    tim hortons wont even make your coffee till you pay for it. payup
  20. jomama45

    jomama45 PlowSite.com Addict
    Messages: 1,190

    /\ These two are the best answers to your question.

    To add to the issue involving bankruptcy, you'd be lucky to get 10 cents on the dollar many times.

    Another thing to keep in mind is that often companies that are in rough financial shape like this extend their accounts payable out for longer terms to help stay afloat, 60-90 days isn't unheard of.