A small local company is selling their plowing route. It consists of 90 residential plow customers. He's had most of them for over 5 years. Is anyone familiar with how much they're worth?
I have always been weary of buying routes. Some can be sxpensive and there is no real gurantee that you will keep all the accounts. Also,I would ask to see the accounts and make sure that you can handle them. Find out what the accounts bring in. Will you need to purchase more equipment? These things must be thought of before you spend the money on the route.
We pay the equivilant of 2 plowings for the route. 1st payment is due 30 days after the first plowable snowfall. 2nd payment is due 30 days after the second plowable snowfall. This is payable only on those accounts we 1) elect to retain, or 2) that stay with us.
In a market that gets little snowfall, maybe only pay for one plowable event.
Might seem cheap... but buying another's route is risky business all around. However, I will say that if you get the right route (with commercial customers), it can pay off big time.
We often keep the commercial accounts and sell off the residential accounts. Of course, we want the equivilant of 4 plowable events (in a market that gets 25 events regularly). Gotta make money on the resale !!
It all depends on HOW CLOSE THEY ARE. And how much they pay.
They could be worth $15,000 in the right scenario.
In the wrong scenario, they might not be worth anything.
What do they pay/year?
How long does it take?
How man MILES to drive through the route?
~Post an answer to those questions and I'll post a value based on the residential route sales I've been involved with.
90 driveways? What did the guy do the rest of the night?
No.... they walk in. Word is out that we do this, so we draw them. We get alot of local press because of our size, so most of the small guys know that they can come to us if they're getting out of the biz for some reason. Same with landscape. The deal is different, and we usually buy them to get their people and/or equipment more than their accounts.
Hmmm.... None of the SIMA Mags I have contain a contractor profile for John's company. In fact I only saw one profile. Maybe there should be a profile in each issue, and maybe we can start with John in the next one? I think I've seen his company profiled in a different mag. but I can't find it right now. Do I remember correctly?
go to http://www.timesnews.com
that will bring you to another site, but its basically an Erie newspaper on line. On the left, in the search box, type "allin" and you will read a profile on Allin Co from last sunday.
I read the whole article. CRAZY stuff. Very impressive. John, it said The Allin Cos. do about $1.3 in snow each year, does that include the snow management group? How are you able to coordinate jobs like the bank w/1300 sites???
That figure ($1.3 mil) is for snow revenue the Erie market.
Snow Management Group (SMG) should do (roughly) $6 mil.
Total 2001 projected revenue for all companies we own/run is just under $10 mil. at it's current level. However, we expect that our total company revenues will increase about 50% more for next year, if all goes as planned.
As for co-ordinating SMG and our efforts at establishing ourselves as a national snowplowing contractor ???
..... oh no.... can't tell you all my secrets, yet.
We have a landscape design-build business including irrigation installation and maintenance, a chemical lawn care (fertilizing) business, a landscape maintenance business, a holiday decorating business and a real estate property management company (commercial and residential income property rentals) that makes up $2.2 mil. bringing the local dollars to $3.5 (roughly).
John,what a great article!It gives us a bit of background on you and your co.My problem is selling my services here,no one wants to think about snow & ice management until after the fact...not sure if Mr.Hillenmeyer had the same problem when they started dealing with this side of the business,of course,he is in city and I'm kind of out aways.Maybe its because I'm the "new guy in town" Its just a hard sell here at least so far.Thanks JRB