# From 0 to sub contract plowing in 1 month



## DesMoines2500

This site has been a lot of help for me so I thought I'd pass along my experience so far. Setting up a legit company was easier than I could have thought and my insurance company was happy to provide the coverage needed.

It all started this summer, a good buddy and me often get together for beers in his garage, the conversation usually drifts to how to make some extra loot. I have a solid job and a few rental properties, and he works a seasonal construction job that basically sees him go onto unemployment the second the temps drop. He also just happened to have a CDL and heavy equipment experience. So plowing just made a lot of sense. He'll be driving the plow 90% of the time. I'm the money. He'll plow my 3 rentals for free.

With a $5000 budget we acquired a truck ($4500), a 2000 Sierra 2500 with a 7'6" plow. It's a beast, rusty as hell but seems to run great and was built to plow with lights and everything.

$50 to file a simple LLC document (I'm not risking my personal assets!). 
$4500 for the Truck and plow. 
$150 to register the truck. Resisted to LLC of course (I'm not risking my personal assets!).
$250 for 6 months of $500,000 business liability insurance. (not commercial) 
Set up a Federal EIN for the business online for free. 
$50 for an oil change.

That where we sit today. I have 2-3 good subcontracting jigs lined up that will pay $55/hr with routes near our houses. The LLC and insurance made all the difference to them. I expect to make revenues of $5500-$11,000 this season based on averages snow falls in my area.

Since I'm the money, the deal we worked out is that for every dollar made plowing:

1/3rd comes to me (until I'm paid back my initial $5000 investment), then the LLC owns the truck equally. 
1/3rd goes to a truck maintenance pool including gas, tires repairs. 
1/3rd goes to the driver.

We're both on a handshake agreement but that's not a concern. While I'm not excited to be the only one with a financial stake $5000, I know I can quickly liquidate the equipment so the risk is still low for me. Depending on how this season goes we may just buy a second plow next year. We both drive 1500 trucks, and having a light plow as backup probably wouldn't be a bad idea anyway.

Still, we haven't plowed a single sqft of snow yet, but I feel like we're ready. The combination of 24/7 availability, our own personal trucks as backups, a dedicated plow truck really make it seem like this partnership could take off. It will all depend on how well this 2500 holds up I suppose. Just looking forward to snow.


----------



## BC Handyman

Sounds like your on your way to becoming a business(need income first) I agree, with the small investment you made, even if things go south you wont starve. I wish you luck this year, 
1 piece of advise I can give is: Both of you use your head, slow down & think before you act. This applies to business & the plowing.


----------



## jasonv

Ok.....

Has he ever actually plowed snow before?
How about the insurance on the vehicle itself?
Are you prepared for your beater to blow its tranny? (take that question every way that fits)
Are you prepared with a backup/contingency plan in case the truck doesn't last the season?
Have you checked the frame for cracks at the upper rear control arm mount? Has it been reinforced yet? Wouldn't want to break the frame in half mid winter....

What KIND of jobs will he be doing? Commercial lots? Private driveways? Mix? How big?


----------



## Wilnip

sounds like you've done everything right! Now why not make your partnership right? Put it in writing and that way you keep the business relationship separate from your personal relationship. As you grow you will be sorry that you didnt. But congratulations and here's hoping you have a great season.


----------



## plowguy43

jasonv;1517988 said:


> Ok.....
> 
> Has he ever actually plowed snow before?
> How about the insurance on the vehicle itself?
> Are you prepared for your beater to blow its tranny? (take that question every way that fits)
> Are you prepared with a backup/contingency plan in case the truck doesn't last the season?
> Have you checked the frame for cracks at the upper rear control arm mount? Has it been reinforced yet? Wouldn't want to break the frame in half mid winter....
> 
> What KIND of jobs will he be doing? Commercial lots? Private driveways? Mix? How big?


I'm assuming you didn't read any of the OP's posts. Every question you asked (at least the relevant ones) were answered.

Good Luck this season, you really don't need a large investment or $50k brand new truck to plow snow. I learned that after a few seasons and have been enjoying a much higher profit margin with my (reliable) paid off truck/plow. payup


----------



## ducaticorse

plowguy43;1518031 said:


> I'm assuming you didn't read any of the OP's posts. Every question you asked (at least the relevant ones) were answered.
> 
> Good Luck this season, you really don't need a large investment or $50k brand new truck to plow snow. I learned that after a few seasons and have been enjoying a much higher profit margin with my (reliable) paid off truck/plow. payup


Awesome, I was about to write the same response as you!! :laughing:


----------



## ducaticorse

Looks good. My only question is what happens to your cut after the truck is paid off. If you entered into the biz 50/50 you should have set up the financing for the truck as a loan to the LLC from you. That way you can claim it as a business investment/deduction on your own personal tax filings. You should also be earning interest on that loan that the LLC pays you and can write off as a business expense. Anyway, good luck!!


----------



## DesMoines2500

I was thinking of pulling my initial equity out as a sort of partner draw over the next two years. The tax and payout aspect is definitely the greyest area for me. Over the years of running my rental property business I've gotten a handle on taxes so I'm sure I can learn the relevant tax steps for this LLC as well. 

Luckily this this is one of my best friends (best man at wedding etc...) and we won't have any arguments over money... famous last words I know. We both fully understand that I'll be getting my money out over the next 2 seasons. Once the truck (and all my other out of pocket expenses) is paid off, I'll be signing the truck over to him. So basically, he's pocketing all the money he makes because I'll be paid and the truck will be his. It's a sweet deal for him an he knows it. We came up with this whole plan after about 12 beers each, so he's probably just surprised that I actually followed through buying the truck and setting everything up. 

As far as catastrophic failures go it's a built 2500, so it's pretty tough but "if he dies, he dies". Experiment over, I'm not sinking anything more into this endeavor this year. There's definitely going to be a fair amount of just dumb luck needed, but so far, everything is going well. Plus, I need a truck throughout the year for rehabbing rental houses anyway, so there are uses for the 2500 in the off season.

And PS, I'm making HIM buy the cutting edge for that blade, he needs to put some skin into this... 

What could go wrong!


----------



## Spool it up

a quick 18'' ought to shape things up ! Good Luck .


----------



## BPS#1

$55 an hr.


Oh yeah, you are so gonna shoot a fat pig in the axx on that one.


----------



## Meezer

DesMoines2500;1518100 said:


> As far as catastrophic failures go it's a built 2500, so it's pretty tough but "if he dies, he dies". Experiment over, I'm not sinking anything more into this endeavor this year. this...


So does that mean that you will abandon whatever customers you may have???


----------



## DesMoines2500

Meezer;1518147 said:


> So does that mean that you will abandon whatever customers you may have???


We're going to go through one of the biggest lot management companies in town. If we break down there are probably a hundred other trucks to fill in. Its actually why I went this route, since it's our first year plowing being in a larger team should give us great experience and connections. There are a lot of unknowns and experience this year is just as valuable as money... ok... maybe not exactly as valuable.

As for $55/hr, I love more. I like money. I had 3 companies who wanted our services. One was $45 and the other two were $55/hr. I went with the larger $55/hr company for hte reasons above.


----------



## BC Handyman

again, you sound like you got a good handle on things. Glad to see that someone had put some thought into the business, unlike some who dive in with only thought being: I got plow & truck, lets plow for $ now.


----------



## DesMoines2500

Thanks, the waiting for snow is getting to me. Everything seems good on paper, but no work to do yet. The lot management company said a lot of their regular trucks were out of the business after last years dry winter so with decent snow we could end up sitting nicely.


----------



## grandview

Did this company tell you when you'll get paid?


----------



## Meezer

DesMoines2500;1518174 said:


> If we break down there are probably a hundred other trucks to fill in.


Maybe so, however, a lot of "companies" usually have in their sub-contractor agreement some variation of this blurb:

_If contractor fails to show up for a job, complete a job or is unable to perform a job in any way whatsoever, that he/she agreed to complete, then the contractor shall be charged back for the company cost to complete that job at a rate of $100per hour. Company shall have the option of withholding said amount from any future payment due contractor until said amount is satisfied.
_


----------



## CashinH&P

And thats why I dont sub contract. Sounds like your on top of every thing else. If I were you I would sub contract this year and try to get my own accounts next season.


----------



## DesMoines2500

grandview;1518195 said:


> Did this company tell you when you'll get paid?


15-30 days after the job. They're huge and have year round contracts so they have long relationships. The others were 15-45 days and the $45 place.


----------



## DesMoines2500

Meezer;1518208 said:


> Maybe so, however, a lot of "companies" usually have in their sub-contractor agreement some variation of this blurb:
> 
> _If contractor fails to show up for a job, complete a job or is unable to perform a job in any way whatsoever, that he/she agreed to complete, then the contractor shall be charged back for the company cost to complete that job at a rate of $100per hour. Company shall have the option of withholding said amount from any future payment due contractor until said amount is satisfied.
> _


I'll have to read the contract carefully. That's a non started for us, with only one truck there's no way to guarantee it will never be out of service.


----------



## ducaticorse

DesMoines2500;1518100 said:


> I was thinking of pulling my initial equity out as a sort of partner draw over the next two years. The tax and payout aspect is definitely the greyest area for me. Over the years of running my rental property business I've gotten a handle on taxes so I'm sure I can learn the relevant tax steps for this LLC as well.
> 
> Luckily this this is one of my best friends (best man at wedding etc...) and we won't have any arguments over money... famous last words I know. We both fully understand that I'll be getting my money out over the next 2 seasons. Once the truck (and all my other out of pocket expenses) is paid off, I'll be signing the truck over to him. So basically, he's pocketing all the money he makes because I'll be paid and the truck will be his. It's a sweet deal for him an he knows it. We came up with this whole plan after about 12 beers each, so he's probably just surprised that I actually followed through buying the truck and setting everything up.
> 
> As far as catastrophic failures go it's a built 2500, so it's pretty tough but "if he dies, he dies". Experiment over, I'm not sinking anything more into this endeavor this year. There's definitely going to be a fair amount of just dumb luck needed, but so far, everything is going well. Plus, I need a truck throughout the year for rehabbing rental houses anyway, so there are uses for the 2500 in the off season.
> 
> And PS, I'm making HIM buy the cutting edge for that blade, he needs to put some skin into this...
> 
> What could go wrong!


Forgive me if I understand this agreement wrong. But, you just wrote that you're giving your buddy a free loan, with zero percentage of net profit, and after he pays it off, you have no vested interest in this endevour. There shouldn't be ANY arguments from your buddy on this one because you just financed an entire business for him at zero cost to him, and absolutely zero profit to you.....


----------



## peteo1

ducaticorse;1518313 said:


> Forgive me if I understand this agreement wrong. But, you just wrote that you're giving your buddy a free loan, with zero percentage of net profit, and after he pays it off, you have no vested interest in this endevour. There shouldn't be ANY arguments from your buddy on this one because you just financed an entire business for him at zero cost to him, and absolutely zero profit to you.....


Glad I wasn't the only one thinking this.


----------



## Wilnip

Sounds like he is going to be putting a lot less time in the business than his friend. Maybe this seems fair to both of them? How much interest do you think he will get off of $5k anyway?


----------



## ducaticorse

Wilnip;1518351 said:


> Sounds like he is going to be putting a lot less time in the business than his friend. Maybe this seems fair to both of them? How much interest do you think he will get off of $5k anyway?


It's more about setting up and structuring healthy business practices rather than the amount of interest accrued. I do get what you're saying though.

This whole deal sounds like he's just doing his friend a favor anyway. He hasn't stated where he actually benefits from this set up financially yet. He's paid for everything, and is only getting paid back what he owes on the truck with zero interest.

Correction, his benefit is getting his three rental properties plowed for free.


----------



## Philbilly2

DesMoines2500;1518100 said:


> I was thinking of pulling my initial equity out as a sort of partner draw over the next two years. The tax and payout aspect is definitely the greyest area for me. Over the years of running my rental property business I've gotten a handle on taxes so I'm sure I can learn the relevant tax steps for this LLC as well.
> 
> Luckily this this is one of my best friends (best man at wedding etc...) and we won't have any arguments over money... famous last words I know. We both fully understand that I'll be getting my money out over the next 2 seasons. Once the truck (and all my other out of pocket expenses) is paid off, I'll be signing the truck over to him. So basically, he's pocketing all the money he makes because I'll be paid and the truck will be his. It's a sweet deal for him an he knows it. We came up with this whole plan after about 12 beers each, so he's probably just surprised that I actually followed through buying the truck and setting everything up.
> 
> As far as catastrophic failures go it's a built 2500, so it's pretty tough but "if he dies, he dies". Experiment over, I'm not sinking anything more into this endeavor this year. There's definitely going to be a fair amount of just dumb luck needed, but so far, everything is going well. Plus, I need a truck throughout the year for rehabbing rental houses anyway, so there are uses for the 2500 in the off season.
> 
> And PS, I'm making HIM buy the cutting edge for that blade, he needs to put some skin into this...
> 
> What could go wrong!


Let me tell you a little story about what can go wrong.

Once upon a time, I had a best friend (also the best man in my wedding) my wife and his wife were best friends( marton of honor in our wedding) Thier first born child is our godson... I think unless that type of thing can be reversed, then he is probley not anymore. We did everything togther. I plowed for his wife's company for years. I was their lead guy. I even dumpped a bunch of my own cash into a shop that was built on his property.

Then one day when I created an incorpration to protect my assets (much like yourself) and started looking for my own work.

Little did I know that this was going to create a HUGE problem. Then shortly after that, I got accused through the grape vine of stealing a set of truckside plow pockets out of the shop. Believe it or not, this pissed me off and I am still bitter about it to this day. I am not the kind of person who steals from their best friend, and I am not in a financial state to need to steal $192.50 worth of plow pockets.

I no longer plow for them, go to the shop, or really speak to them unless we meet at a store or at a wedding, then there is ackward small talk.

Looking back whould I have gone out on my own again... (money wise) 100% yes. (in terms of friends) no. It sucks loosing your firends. Especially when you loose your best friend, and because of your own personal business decisions, you have to watch your wife loose her best friend over the whole deal.

I can tell you other stories of partnerships that have gone wrong too. I have watched it happen time and time again over the years.

All I can say is, get somthing in writing while spirts are high. The second that one or the other starts feeling used or abused, the whole best friend thing will start to break down, and somthing will get used against somone. It is a terrible domino effect.

I don't mean to be a downer on the whole situation, but I guess you asked.

Also....$55/hr???????????? You should be ashamed of your self. This is the reason that the whole snow plowing industry is not worth a sh*t anymore.


----------



## DesMoines2500

Wilnip;1518351 said:


> Sounds like he is going to be putting a lot less time in the business than his friend. Maybe this seems fair to both of them? How much interest do you think he will get off of $5k anyway?


This is correct, it is basically a loan since once I'm paid back the truck is his. There's some risk for me, but it's only $5000 and the equipment should maintain it's value over the next 2 years so even that's minimal. Maintenance is built into our agreement

My career is software development but my main side business is rental properties, 3 duplexes. Those just happen to be about the two hottest areas of the economy right now so laying out $5000 to help a buddy, and getting my rentals plowed in return doesn't seem like a bad deal all around. What's 3 driveway plows every storm anyway? $120. There's my interest! That's how I passed it with my wife anyway.

Like I said in the OP, between his seasonal construction schedule and heavy equipment experience and my rentals plowing just seems to fit perfectly. I just had to make sure to do it right and protect my other assets.

And yes, I'm terribly sorry for destroying the plowing industry nationwide by accepting $55 an hour. Did I mention we're rookies just looking for contracts and experience? At least I didn't take the $45 an hour offer! What do you think is fair? $65? $80?


----------



## BPS#1

Whats fair? Many guys get north of $100.





As for the horror stories of not getting it in writing.
I've got stories too.
One of them got so bad and ruined so many friendships ....... because they had nothing in writing. 
The case went to court, lots of judges and finally all the way up to the state supreme court. It was really dirty. 
Cost a whole lot of good money to feed the lawyers, money that could have been used to a better purpose else where.
A "friend" can often screw you faster than some joe blow when there is money involved. 


GET IT ALL IN WRITING!!!!!!!!!!!!!!!!!!!! Its only smart.


----------



## Laszlo Almasi

Philbilly2;1518380 said:


> Let me tell you a little story about what can go wrong.
> 
> Once upon a time, I had a best friend (also the best man in my wedding) my wife and his wife were best friends( marton of honor in our wedding) Thier first born child is our godson... I think unless that type of thing can be reversed, then he is probley not anymore. We did everything togther. I plowed for his wife's company for years. I was their lead guy. I even dumpped a bunch of my own cash into a shop that was built on his property.
> 
> Then one day when I created an incorpration to protect my assets (much like yourself) and started looking for my own work.
> 
> Little did I know that this was going to create a HUGE problem. Then shortly after that, I got accused through the grape vine of stealing a set of truckside plow pockets out of the shop. Believe it or not, this pissed me off and I am still bitter about it to this day. I am not the kind of person who steals from their best friend, and I am not in a financial state to need to steal $192.50 worth of plow pockets.
> 
> I no longer plow for them, go to the shop, or really speak to them unless we meet at a store or at a wedding, then there is ackward small talk.
> 
> Looking back whould I have gone out on my own again... (money wise) 100% yes. (in terms of friends) no. It sucks loosing your firends. Especially when you loose your best friend, and because of your own personal business decisions, you have to watch your wife loose her best friend over the whole deal.
> 
> I can tell you other stories of partnerships that have gone wrong too. I have watched it happen time and time again over the years.
> 
> All I can say is, get somthing in writing while spirts are high. The second that one or the other starts feeling used or abused, the whole best friend thing will start to break down, and somthing will get used against somone. It is a terrible domino effect.
> 
> I don't mean to be a downer on the whole situation, but I guess you asked.
> 
> Also....$55/hr???????????? You should be ashamed of your self. This is the reason that the whole snow plowing industry is not worth a sh*t anymore.


I agree 100% and will never ever have a partner situation ever again.


----------



## Laszlo Almasi

DesMoines2500;1518397 said:


> And yes, I'm terribly sorry for destroying the plowing industry nationwide by accepting $55 an hour. Did I mention we're rookies just looking for contracts and experience? At least I didn't take the $45 an hour offer! What do you think is fair? $65? $80?


I won't even drop my blade on the ground for those amounts if it's just pay on each job site where you do not get paid in between for transit. If I'm subbing for someone (and I do) I get $85/hr. The clock starts running as soon as I show up and doesn't stop until we're done.

And those little clauses you may not see like the ones about you being responsible if your truck fails. It doesn't matter if they already have enough trucks to fill in if yours fails. The fact that you will most likely be given a specific route will be the problem. If your beater fails and they have to send someone else out to remedy the route you were given...guess what? You're going to lose your arse and they will actually make money off of your trucks failure over and above if they have such a clause. I've handed contracts back to companies and just walked away from them while they stood there for just that. They needed me but yet were willing to stick it to me if something happened?

And $55/hr? No thanks.


----------



## Meezer

Laszlo Almasi;1518442 said:


> And those little clauses you may not see like the ones about you being responsible if your truck fails. It doesn't matter if they already have enough trucks to fill in if yours fails. The fact that you will most likely be given a specific route will be the problem. If your beater fails and they have to send someone else out to remedy the route you were given...guess what? You're going to lose your arse and they will actually make money off of your trucks failure over and above if they have such a clause. I've handed contracts back to companies and just walked away from them while they stood there for just that. They needed me but yet were willing to stick it to me if something happened?


Yeah, those pesky little clauses can cause you to lose quite a bit of money. Another thing to look for is the_ "We'll pay you after our customer pays us"_

I


----------



## plowguy43

The only thing I'll comment on is the $55/hr. Think of it this way - 12 hr "event" will gross $660, then subtract your fuel/ins/etc from that and what does it leave you with? Then you need to split that into your thirds that you have setup on page 1. After 12 hours of plowing, your friend won't be thrilled with a $100 paycheck or possibly less.

Other than that, I think you have a decent grip on your situation and the friend situation can go south if you let it.


----------



## ducaticorse

BPS#1;1518407 said:


> Whats fair? Many guys get north of $100.
> 
> As for the horror stories of not getting it in writing.
> I've got stories too.
> One of them got so bad and ruined so many friendships ....... because they had nothing in writing.
> The case went to court, lots of judges and finally all the way up to the state supreme court. It was really dirty.
> Cost a whole lot of good money to feed the lawyers, money that could have been used to a better purpose else where.
> A "friend" can often screw you faster than some joe blow when there is money involved.
> 
> GET IT ALL IN WRITING!!!!!!!!!!!!!!!!!!!! Its only smart.


$100 an hour to sub? Where do I sign up?!


----------



## jasonv

plowguy43;1518031 said:


> I'm assuming you didn't read any of the OP's posts. Every question you asked (at least the relevant ones) were answered.
> 
> Good Luck this season, you really don't need a large investment or $50k brand new truck to plow snow. I learned that after a few seasons and have been enjoying a much higher profit margin with my (reliable) paid off truck/plow. payup


Not a SINGLE ONE of those questions were asked in OP's post, hence why I ASKED THEM. Perhaps YOU should read. At this point in the conversation, most have finally been addressed... and it isn't looking good.


----------



## Wilnip

plowguy43;1518478 said:


> The only thing I'll comment on is the $55/hr. Think of it this way - 12 hr "event" will gross $660, then subtract your fuel/ins/etc from that and what does it leave you with? Then you need to split that into your thirds that you have setup on page 1. After 12 hours of plowing, your friend won't be thrilled with a $100 paycheck or possibly less.


Your math is way off. Insurance/etc are fixed costs. If they have 50 plowable events this year, the "fixed" cost per hour will be way different than if they only have 5.



ducaticorse;1518479 said:


> $100 an hour to sub? Where do I sign up?!


Im so glad you said that. Top dollar rate in my area, what 2 local contractors charge their customers is $69/hr. You guys need to realize that what you "say" you can get in your area is far different from other areas.


----------



## plowguy43

jasonv;1518488 said:


> Not a SINGLE ONE of those questions were asked in OP's post, hence why I ASKED THEM. Perhaps YOU should read. At this point in the conversation, most have finally been addressed... and it isn't looking good.


As I stated, the relevant questions were answered.



Wilnip;1518492 said:


> Your math is way off. Insurance/etc are fixed costs. If they have 50 plowable events this year, the "fixed" cost per hour will be way different than if they only have 5.
> 
> Im so glad you said that. Top dollar rate in my area, what 2 local contractors charge their customers is $69/hr. You guys need to realize that what you "say" you can get in your area is far different from other areas.


Not necessarily off, I was tossing out a simple example. Regardless of fixed cost or not, it is a cost that will be deducted off of his hourly rate. I was trying as simply as possible, to show the net amount off of a single storm after multiple hours of work. The take home for his friend isn't much when they figure their 1/3 split.


----------



## peteo1

No but it won't take much to pay off 5k. Besides, I'm more interested in where it is you guys are making north of $100/hr. Around here I know guys that make anywhere from $45 up to $75 an hour depending on the rig they have.


----------



## BPS#1

peteo1;1518632 said:


> No but it won't take much to pay off 5k. Besides, I'm more interested in where it is you guys are making north of $100/hr. Around here I know guys that make anywhere from $45 up to $75 an hour depending on the rig they have.


I'd not bother buying my own plow for that. 
I'd just drive for some one.

At $75 I can see it starting to make sense.

Under that.......... I'd question if they understand their expenses and what it'll cost to repair/replace their equipment.

I'm not the cheapest guy around, but the guys that only charge $75 an hr are major milking the clock.
Or so my customers tell me.


----------



## peteo1

I'd love to start at $75 and go up but the market here doesn't really support it. Some guys I know get that but they are few and far between. Our market is saturated with guys that have $40,000+ trucks and plow for $45/hr. I just can't figure out how they make it. I do much better than that and I still feel like there is room for improvement as far as the pay scale goes. Although unlike most guys here, I stick to residential. I plow one commercial lot and that's it. I like the residential bit. Everyone wants to kill each other for commercial, and that's fine for them, but I'll stick with where I make good money.


----------



## BPS#1

There are places where a pickup can get $125 an hr. (not sub)
Plus salt/sand.


----------



## ducaticorse

BPS#1;1518837 said:


> There are places where a pickup can get $125 an hr. (not sub)
> Plus salt/sand.


Those rates are great wherever planet you are from... I live and was born and breed in Boston, and if a guy in a 3/4 pickup asked for 125, we'd just laugh our asses off at him and send him on his way. My Komatsu 120 works in Boston and is set up with a 12 ft box and gets $125 an hour. One tons get 65-85 with a sander plus material. I don't know what your COL is out in Wyoming, but it seems high as a kite. You live in a different world than the rest of the US, because NO ONE gets $125 an hour in a ******* pick up truck lol. I'd like to see that on paper. I call MAJOR BS on your numbers......


----------



## Philbilly2

I have had $120 offers in a pickup before. They are in downtown chicago. That is why I have never had any interest in them. That is to far for me to travel in the snow and I don't even go into the ciry for... well... anything.

It all depends on the area that you are in, the amount of work total snow work possible, and the number of guys that are willing to do it for nothing. Supply and demand is what drives the pay for the industry.


----------



## joe2025

DesMoines2500, Sounds like you guys are off to a good start. Good luck to you this year and for many years of profitable plowing. I would however read and understand the post by Laszlo Almasi. I also had a "bad" experience with a "friend" as a partner as I'm sure a lot of others have had. Before you do anything else you need to sit down with your partner and get "everything" in writing. There are so many things that can go wrong with a friend as a partner. Take it from someone who has lost thousands of dollars because "everything" was not in writing. It can become a "he said he said" in court and could cost you a lot of money.

I don't care how long you have been friends, even if you were brothers, you need to have a partnership agreement so that both of you are on the same page. There's an old saying. "never do business with family or friends" and there's another one that states "Business is business and friendships are friendships". There is a reason that these statements exist. If you are truly good friends then both of you will understand how important it is go get it in writing.

Sorry this is so long but it still pisses me off when I think about how much money it cost me because we were in a hurry to start plowing and did not take the time to write up an agreement. 

Hope you take this advise and get it in writing. It will not only save your business but it may also help you avoid losing a good friend.


----------



## DesMoines2500

Philbilly2;1518865 said:


> I have had $120 offers in a pickup before. They are in downtown chicago. That is why I have never had any interest in them. That is to far for me to travel in the snow and I don't even go into the ciry for... well... anything.
> 
> It all depends on the area that you are in, the amount of work total snow work possible, and the number of guys that are willing to do it for nothing. Supply and demand is what drives the pay for the industry.


Does Chicago still have a law that you can't park pickups on the street? I lived tehre for 4 years and my old roommate bought a little toyota pickup, the next thing you know he was getting $50 tickets daily for daring to park his pickup on the street in Chicago! The Audacity!

I hated that city so much...


----------



## OC&D

Start by dropping the plow when you park it. No sense in your front end carrying weight when it's parked. Also, in the event of some odd mechanical failure, no one's toes can be under it if it falls.


----------



## DesMoines2500

Still no snow but we have our first contract. We'll be subbing for a company that does several large lots as part of a crew and typically spends 6-8 hours out per storm. Should be a perfect situation for beginners like us and be a multi-year type of deal with some luck. $60/hr too which is what I was hoping for. Had to bump the insurance up to $1,000,000 from $500K in aggregate general liability but it's still under $550/yr. 


NOW SNOW DAMMIT!


----------



## junker1

If I may, friends and partnerships just dont work. you, the money man must have control of everything. whether its 51% or 100%. there can only be one decider.
this may or may not happen to you but a friend will expect you to understand that he cant work because of a hangover. if you are doing all the work and shelling out all the cash it should be your venture. pay him what you want, but do it as pay

.good luck


----------



## DesMoines2500

junker1;1528886 said:


> If I may, friends and partnerships just dont work. you, the money man must have control of everything. whether its 51% or 100%. there can only be one decider.
> this may or may not happen to you but a friend will expect you to understand that he cant work because of a hangover. if you are doing all the work and shelling out all the cash it should be your venture. pay him what you want, but do it as pay
> 
> .good luck


In hindsight this was probably the way to go. But everything seems to be working out OK so far. I wanted him to have a strong vested interest beyond an hourly wage. At the end of the day I'm only in for $5K and risking very little of that $5K. It's not worth caring too much over. I'm insured and protected so the worst case scenario has been limited. I'm sleeping well over how it's all shaken out.

Still haven't plowed an inch though.


----------



## Philbilly2

DesMoines2500;1518951 said:


> Does Chicago still have a law that you can't park pickups on the street? I lived tehre for 4 years and my old roommate bought a little toyota pickup, the next thing you know he was getting $50 tickets daily for daring to park his pickup on the street in Chicago! The Audacity!
> 
> I hated that city so much...


Don't know. Never been there over night. Try not to be there at all honestly.


----------



## DesMoines2500

Did well enough the first two storms to justify buying a backup truck that will also be put to some reg use. I'm paying for general liability insurance anyway that's based on revenue, not vehicles.

1993 F250, 70,000 original miles. with some recent suspension and drive train work. Meyer 7.5" poly e60 pump $3000


----------



## DesMoines2500




----------



## IA Farmer

Nice find. We had a heck of a first storm this year. So will you be going out with your buddy in the second truck?


----------



## DesMoines2500

RAM_ON97;1553406 said:


> Nice find. We had a heck of a first storm this year. So will you be going out with your buddy in the second truck?


I thought I was but I literally just found another sub contract that is right next to another buddy who wants to drive for me. Makes sense just to let him at $20/hr!

I'll just be filling in and picking up driveways off hours I guess.


----------



## beanz27

20, PER HOUR? This guys insane. You'd barely cover gas for that price.


----------



## IA Farmer

beanz27;1555257 said:


> 20, PER HOUR? This guys insane. You'd barely cover gas for that price.


I'm pretty sure he means he has been sub contracted to use his truck and is going to pay his buddy 20/hr to drive for him. Which if you can trust the guy running your rig and don't want to do the work then its a win win.


----------



## willshome

what about taxes how are you breaking that up? Are both of you on all the paperwork as owners if not what if he crashes the truck?


----------



## DesMoines2500

willshome;1555429 said:


> what about taxes how are you breaking that up? Are both of you on all the paperwork as owners if not what if he crashes the truck?


The LLC that we're both 50% partners in owns the trucks with the understanding that if we liquidate, I get paid back first. The LLC owes me personally about $9000 at this point, which I will withdraw gradually as untaxed paid in capital as the money comes in over a couple seasons. We've only had two snows and profited about $1200 from them with just the one truck.

Now that we have a second truck, (which is committed to light subbing at $55/hr on a commercial lot) the next snow should really start bringing some decent money in, still while providing assurance that we have a backup for our primary $60/hr contract.

BTW, the newest truck is turning out to have been a great deal for $3000. 1993 F250, good tires with the C6 trans. 70K original miles and a 7.5" Meyer poly. The pump was weeping lower but works perfectly now that I had new seals put in.

We're still hacks, I know that. We're driving two rust buckets that could give up the ghost at any time, but we're in a position that with a little luck we'll make enough to buy yet another truck or a used spreader in the off season so we can do our own lots next season.

So far so good really. I couldn't have invested this $9000 many other places with the possibility of making it all back in 1-2 years and still having 50% ownership.


----------



## DesMoines2500

RAM_ON97;1555413 said:


> I'm pretty sure he means he has been sub contracted to use his truck and is going to pay his buddy 20/hr to drive for him. Which if you can trust the guy running your rig and don't want to do the work then its a win win.


Correct, the driver is a younger guy who works with my partner and is available 24/7 through March will get $20/hr. The new sub gigs are close to his house so he'll be taking the truck. He's a great guy, I know him. In any case I have yet another friend who wants to fill in as well.

Personally, I've only done a few driveway just for fun (it wasn't that much fun) and beer money so far so it looks like that will continue. I'm happy doing the management and contracts side and just filling in when absolutely necessary to to put some cash in my pocket.


----------



## Philbilly2

DesMoines2500;1553386 said:


>


Man, by your date stamp on your camera, that is a good feeling to know that not only you will be plowing on next Christmas Day, but also that the truck is still running and intact! :laughing:


----------



## allseasons87

ducaticorse;1518852 said:


> Those rates are great wherever planet you are from... I live and was born and breed in Boston, and if a guy in a 3/4 pickup asked for 125, we'd just laugh our asses off at him and send him on his way. My Komatsu 120 works in Boston and is set up with a 12 ft box and gets $125 an hour. One tons get 65-85 with a sander plus material. I don't know what your COL is out in Wyoming, but it seems high as a kite. You live in a different world than the rest of the US, because NO ONE gets $125 an hour in a ******* pick up truck lol. I'd like to see that on paper. I call MAJOR BS on your numbers......


We have 3 accounts that are at $125 per hr plus additional for salt apps. That's with a wideout though. Straight blades are at around $105 hr.


----------



## ducaticorse

allseasons87;1564324 said:


> We have 3 accounts that are at $125 per hr plus additional for salt apps. That's with a wideout though. Straight blades are at around $105 hr.


First off, after reading the way I wrote that little bit, first off, I apologize for writing like an a-hole.

Second, I don't see how you get anywhere near 125 an hour for a 3/4 ton, or a 1 ton for that matter. You guys get plenty of snow out there, the rates make no sense...


----------



## allseasons87

ducaticorse;1564386 said:


> First off, after reading the way I wrote that little bit, first off, I apologize for writing like an a-hole.
> 
> Second, I don't see how you get anywhere near 125 an hour for a 3/4 ton, or a 1 ton for that matter. You guys get plenty of snow out there, the rates make no sense...


It's tough to get customers at that price, but they are around here. We don't get tons of snow here in Dublin Ohio, but the market hasn't really been saturated by guys plowing for  $.


----------



## Laszlo Almasi

allseasons87;1564324 said:


> We have 3 accounts that are at $125 per hr plus additional for salt apps. That's with a wideout though. Straight blades are at around $105 hr.


I get a minimum of $125/hr as well for just a straight blade unless I am subbing for someone else after I'm done with mine.


----------



## Wiedmann

Hopefully if this winter doesn't give us much snow we will have a lot of lawn care and plow companies go under. I'd love to pick up more work at more $$$ next year because all these people went out of business. Even though I have a brand new truck and plow I'll be able to make it threw the winter even if it doesn't snow one more inch, just hope this isn't true for lowballers and sloppy subs.


----------



## Wiedmann

Laszlo Almasi;1564453 said:


> I get a minimum of $125/hr as well for just a straight blade unless I am subbing for someone else after I'm done with mine.


how much work are you getting at $125? In my market I don't see many getting these prices. Different area, different prices i understand.


----------



## potskie

allseasons87;1564324 said:


> We have 3 accounts that are at $125 per hr plus additional for salt apps. That's with a wideout though. Straight blades are at around $105 hr.


That's the big difference I think that some guys are having trouble with.... 125 is a sweet price no matter what but equipment makes a huge different in rate. The guy with a wideout is almost always going to plow faster than the guy with with the 7.5 straight blade to the point that paying him 20 - 30 an hr more your still going to come out ahead. Especially since chances are he is more experienced aswell.


----------

