# How did you establish your working capital?



## duramax plow (Aug 31, 2015)

Hey guys, I'm New to Plow business, 3 years in doing commercial. That's new in my book.
Just a motivational question from me., How did you guys get your business off the ground and get a great working capital? I do commercial., cut my accounts down from 9 to 5. Reliable employees is hard to find.

My small plow Background
Lessons I learned
1.) I'm experience, as far as I've learned not to spread myself out more than 10 miles.
2.) Don't take accounts near small street areas, stay near major highway
3.) Make sure client does NOT have a problem with pre Salting
4.) Some contracts are NOT worth the hassle. 
5.) Plowing with a DIESEL is Costly even doing the repairs yourself.
6.) Having the WORKING Budgets for supplies for business is CRUCIAL!
7.) Sleep is a myth

Any insight is welcome, and criticism.


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## Collision (Jun 16, 2016)

Agreed, we are both in Philly, those damn side streets are the worst, they were so icy, what kind of truck are you driving anyways? We'll probably see each other if you are around erie ave, levick street, cottman ave or rising sun ave. Plowing isnt cheap gas or diesel, but diesels do use less fuel while idling.


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## duramax plow (Aug 31, 2015)

Collision said:


> Agreed, we are both in Philly, those damn side streets are the worst, they were so icy, what kind of truck are you driving anyways? We'll probably see each other if you are around erie ave, levick street, cottman ave or rising sun ave. Plowing isnt cheap gas or diesel, but diesels do use less fuel while idling.


2014 F250.... I typically try to plow near the I-95 corridor. But I did Salt the Macys at cottman(not my normal)., Diesel, is harder to find Diesel stations 3 am in the morning., I had a Chevy 3500 Dually, crashed, it Was COSTLY., the repairs, the injectors, even oil change, fuel filters., it just adds up. Gas is so much cheaper.

Erie ave, Levick street., I would not be incline to take a CONTRACT near that area. Only would do extras their. But it looks like a salting event tomorrow, and thursday.

You plow commercial?


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## Collision (Jun 16, 2016)

duramax plow said:


> 2014 F250.... I typically try to plow near the I-95 corridor. But I did Salt the Macys at cottman(not my normal)., Diesel, is harder to find Diesel stations 3 am in the morning., I had a Chevy 3500 Dually, crashed, it Was COSTLY., the repairs, the injectors, even oil change, fuel filters., it just adds up. Gas is so much cheaper.
> 
> Erie ave, Levick street., I would not be incline to take a CONTRACT near that area. Only would do extras their. But it looks like a salting event tomorrow, and thursday.
> 
> You plow commercial?


I only plow commercial in philly, i do resi back home in royersford. Ill keep an eye out for your truck, youve already seen pics of mine, i do the bank of america on cottman ave, and a bunch of pnc's. You looking for subs?


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## Randall Ave (Oct 29, 2014)

I think most people here do more than just snow. But money needed to start a plowing business is not very high.


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## leigh (Jan 2, 2009)

Randall Ave said:


> I think *most people here do more than just snow*. But money needed to start a plowing business is not very high.


That's the key.You need another source of income to pay for the plowing side of business. Thats how you lower your income/taxes and qualify for Obamacare, foodstamps etc. And to supercharge this strategy you sub out to Nationals.


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## JMHConstruction (Aug 22, 2011)

leigh said:


> That's the key.You need another source of income to pay for the plowing side of business. Thats how you lower your income/taxes and qualify for Obamacare, foodstamps etc. And to supercharge this strategy you sub out to Nationals.


I prefer the "don't do anything and have lots of kids" approach


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## On a Call (Jan 14, 2015)

I worked for my capital unlike some I know who the gov gave bussiness loans and or grants.

Seemed like back years ago they handed out money to those wanting to start a company...everyone I know who did fell flat on their face.

If you work for it...you tend to take it personaly and treat it like a wanted child


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## Philbilly2 (Aug 25, 2007)

Here is the key...

Your margins have to be profitable, 
then you have to save the profit to have capital.


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## Philbilly2 (Aug 25, 2007)

Randall Ave said:


> I think most people here do more than just snow. But money needed to start a plowing business is not very high.


My accountant tells me:

The only way to make a small fortune plowing snow... is to start with a large fortune...


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## FredG (Oct 15, 2012)

duramax plow said:


> Hey guys, I'm New to Plow business, 3 years in doing commercial. That's new in my book.
> Just a motivational question from me., How did you guys get your business off the ground and get a great working capital? I do commercial., cut my accounts down from 9 to 5. Reliable employees is hard to find.
> 
> My small plow Background
> ...


I used money that I earned over the years before I retired. What do you do in the summer months, This is where we earn 80% of our earnings. Snow operations for us is extra income but could not survive without our summer work.

I'm usually not one to suggest debt but if your smart and it's manageable debt maybe a small line of credit, 90 to 120 day notes, Private investors. You can find reliable guys, gals you have to know where to find them and have creative payroll in place.

Most union or non construction guys are looking for something to do in the late nov. layoff. You have to make it worth it to them. They will not give up there unemployment and sub pay for a day here and a day there. You get what I mean? Not recommended in the summer months when you can keep a guy busy all season. Good Luck


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## leigh (Jan 2, 2009)

A friend of mine was a part time drug dealer:gunsfiring:Back in the "crack is wack" days..He took the money and used it as seed money to purchase real estate and start to companies.He retired in his mid 50's.Another won a couple mil in the lottery and started many failed companies.*trucewhiteflag*Another inherited a large sum.I would probably steer clear of the drug gig,risk/reward questionable!
Maybe take it slow and safe!
PS those were weird crazy days,sitting on beach,rocks through windshields,guns out,my wife and I started hanging out further away from him lol


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## On a Call (Jan 14, 2015)

Robbing banks helps with starting capital....however there are


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## duramax plow (Aug 31, 2015)

Yeah, I appreciate the replies. I had working capital, until a client called his credit card company up last year and said 5 months after the fact, he never received the goods, got me for +20K. That nearly bankrupt me. I'm in the process of suing. But that was a hard pill to swallow, didn't know such FRAUD was common until it happen to me.
I do Construction throughout the year. I was doing good until that happened. I'm re-establishing my capital.

I look forward to you guys replies, learn from other peoples experience, and to keep me motivated. I take on what I can handle., and no vacation or trips., I will wait until my capital is up to $20K and then, slowly build.


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## FredG (Oct 15, 2012)

duramax plow said:


> Tell me more., Just kidding.
> Yeah, I appreciate the replies. I had working capital, until a client called his credit card company up last year and said 5 months after the fact, he never received the goods, got me for +20K. That nearly bankrupt me. I'm in the process of suing. But that was a hard pill to swallow, didn't know such FRAUD was common until it happen to me.
> I do Construction throughout the year. I was doing good until that happened. I'm re-establishing my capital.
> 
> I look forward to you guys replies, learn from other peoples experience, and to keep me motivated. I take on what I can handle., and no vacation or trips., I will wait until my capital is up to $20K and then, slowly build.


No sweat, We all been knocked down before, Keep going you will come back. I had to take on some debt before not cause of anybody else my own stupid mistakes lol. Credit Cards trump all as you found out I did to.


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## Philbilly2 (Aug 25, 2007)

duramax plow said:


> Tell me more., Just kidding.
> Yeah, I appreciate the replies. I had working capital, until a client called his credit card company up last year and said 5 months after the fact, he never received the goods, got me for +20K. That nearly bankrupt me. I'm in the process of suing. But that was a hard pill to swallow, didn't know such FRAUD was common until it happen to me.
> I do Construction throughout the year. I was doing good until that happened. I'm re-establishing my capital.
> 
> I look forward to you guys replies, learn from other peoples experience, and to keep me motivated. I take on what I can handle., and no vacation or trips., I will wait until my capital is up to $20K and then, slowly build.


20k as working capital??? and you are obviously doing jobs that are the size of your 20k capital if a customer can dispute that you did the job and wipe you out...

Either you are not retaining enough to capital or something does not add up with this story.


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## duramax plow (Aug 31, 2015)

Philbilly2 said:


> 20k as working capital??? and you are obviously doing jobs that are the size of your 20k capital if a customer can dispute that you did the job and wipe you out...
> 
> Either you are not retaining enough to capital or something does not add up with this story.


No, my capital was much lower., I've made it thru plow season last year, and 1 phase with the client, increased it to $10k. I've ordered material for the next phase, started installation., he want to add on the project., so small deposit, used my material their, half thru., kicked me off job, mean while he was disputing the service from 5 months ago w credit card company.

What don't add up. , I was growing last year till that. Took a bigger job, and then got the no Lube treatment


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## JD Dave (Mar 20, 2007)

There has to be more to the story as Visa looks at both sides of the story before offering a refund like that.


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## duramax plow (Aug 31, 2015)

I'm not going to get into detail with the case., but if for example you plow for me February March April. And February charge is $15K I pay it March and April is warm so $2k. Then I have you start landscaping Job in June, 5 months later, after you start the digging and drop off material., I kick you off the job for a bogus reason., even though I'm breaching contract. TheN get the $15K returned to me from my credit card company. It's a big hit, plus the materials you just kicked out., and your labor wants to get paid...


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## duramax plow (Aug 31, 2015)

JD Dave said:


> There has to be more to the story as Visa looks at both sides of the story before offering a refund like that.


It was American Express. They only care about their client, even when you have proof.


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## FredG (Oct 15, 2012)

JD Dave said:


> There has to be more to the story as Visa looks at both sides of the story before offering a refund like that.


No they don't! I had someone cancel a payment on a CC and could not do nothing about it besides taking them to court. CC trumps all.


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## FredG (Oct 15, 2012)

duramax plow said:


> It was American Express. They only care about their client, even when you have proof.


They can do it with any card if they are dishonest.


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## Philbilly2 (Aug 25, 2007)

Sounds like you you need to invest more into yourself.

What are your margins on a typical job?


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## FredG (Oct 15, 2012)

Philbilly2 said:


> Sounds like you you need to invest more into yourself.
> 
> What are your margins on a typical job?


That is the key words, Invest in yourself.


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## Philbilly2 (Aug 25, 2007)

FredG said:


> No they don't! I had someone cancel a payment on a CC and could not do nothing about it besides taking them to court. CC trumps all.


One of the many reasons we still refuse to take credit cards.

But if all you do is retail, you almost have to this day and age...


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## FredG (Oct 15, 2012)

Paypal is safer they will look at both sides of the story. I still won't take no CC payments even Paypal.


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## FredG (Oct 15, 2012)

Philbilly2 said:


> One of the many reasons we still refuse to take credit cards.
> 
> But if all you do is retail, you almost have to this day and age...


Yes Sir, You are correct.


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## FredG (Oct 15, 2012)

I know a couple of young guys just run around door to door with the CC thingy on there phone. They never been plucked but there small amounts.


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## FredG (Oct 15, 2012)

Some people will look at you like your some kind nut meaning HO, There honest and think what is better than a CC? They don't realize you can just cancel if you want and just walk away till maybe you end up in court. 

I didn't even know till I got plucked lol, I found this out the hard way.


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## duramax plow (Aug 31, 2015)

FredG said:


> Paypal is safer they will look at both sides of the story. I still won't take no CC payments even Paypal.


Ironically it was through PayPal., Paypal stated American Express basically did Not care to be a judge., They mainly look at what their client says and that's it. Google chargeback claims from paypal. CASH IS KING., well, unto you get pulled over and the cops take it... so I have to fight it in court.

My margins are high after that incident. The profit was going to be great with that client, but then that happened. And next year, I will be buying real estate., no middle man. Cash, and selling the property for cash to increase my income. I can trust myself, no more construction for other people. My margins are lovely in snow removal. No let me get back to salting more lots, 1-2 inches they claim... A couple of my Lot triggers are 1 inch lowblue: payuppayuppayup


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## cjames808 (Dec 18, 2015)

duramax plow said:


> 1.) I'm experience, as far as I've learned not to spread myself out more than 10 miles_. _
> 2.) Don't take accounts near small street areas, stay near major highway.
> 3.) Make sure client does NOT have a problem with pre Salting
> 4.) Some contracts are NOT worth the hassle.
> ...


Sticking to those is what will get you ahead. May take a few seasons to gain enough good accounts. We only have 2 gassers out of 10 trucks, don't ask. $$$$

We can drive UTVs and Loaders to over half our accounts from our shop. Advertising and marketing got me there.

Salt on call, or service when they call avoid like the plague.

Cash flow not capital is key. With cash flow you build capital. Having a few seasonals to cover your expenses is a no brainer.

Sounds like you are aware of the downsides that are avoidable.


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## treemover (Jun 16, 2008)

Cash flow is the king!

I still don’t understand how diesel pickups are so expensive to maintain. I guess I haven’t owned a gasser since my teenage years.


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## Philbilly2 (Aug 25, 2007)

treemover said:


> Cash flow is the king!
> 
> I still don't understand how diesel pickups are so expensive to maintain. I guess I haven't owned a gasser since my teenage years.


When you do the numbers, unless you are plowing 365 days a year, pulling 10k plus every day, or in a extremely topigraphical area... a gas truck is more economical.

They suck hole... but are fiscally cheaper to operate.


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## plow4beer (Nov 16, 2016)

Philbilly2 said:


> When you do the numbers, unless you are plowing 365 days a year, pulling 10k plus every day, or in a extremely topigraphical area... a gas truck is more economical.
> 
> They suck hole... but are fiscally cheaper to operate.


Stop it...please...your sounding logical & s h ! T


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## plow4beer (Nov 16, 2016)

FredG said:


> I'm usually not one to suggest debt but if your smart and it's manageable debt maybe a small line of credit, 90 to 120 day notes, Private investors. You can find reliable guys, gals you have to know where to find them and have creative payroll in place.Luck


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## plow4beer (Nov 16, 2016)

FredG said:


> I
> 
> I'm usually not one to suggest debt but if your smart and it's manageable debt maybe a small line of credit, 90 to 120 day notes, Private investors. You can find reliable guys, gals you have to know where to find them and have creative payroll in place.Luck


I agree, but that is such a slippery slope and i would rarely suggest debt for a small business. There is such a thing as manageable debt but if poop hit the fan all that goes out the window...i carried some "manageable debt" about the first 10yrs of being in business..but no more. Lines of credit with suppliers, yes...tools/trucks/equip, no. Hard work and diligence is the key...and it seems most people I meet any more Dont work as hard and diligent as they claim.

When things are going really good, live and spend like things are bad...do that for a few yrs and you'll find yourself sailing through down times and being more mindful of when you do spend your hard earned money.


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## On a Call (Jan 14, 2015)

Rob the rich and allow them to think you are making them richer.

Simple you say....try it.


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## On a Call (Jan 14, 2015)

duramax plow said:


> Yeah, I appreciate the replies. I had working capital, until a client called his credit card company up last year and said 5 months after the fact, he never received the goods, got me for +20K. That nearly bankrupt me. I'm in the process of suing. But that was a hard pill to swallow, didn't know such FRAUD was common until it happen to me.
> i
> I look forward to you guys replies, learn from other peoples experience, and to keep me motivated. I take on what I can handle., and no vacation or trips., I will wait until my capital is up to $20K and then, slowly build.


That really is something that would send me over the edge and I would be left in Jail.

How can anyone do that ??


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