# Selling route - Value?



## M&M (Sep 8, 2008)

I have been plowing in a specific town for 14 years. I have 2 trucks running with v blades and this year we (me and 1 employee) are plowing 75 driveways with trucks in the signature. Our average price is about $45 per drive. It takes on average 6 hours each to do the route (I'm in a perfect town that most driveways are too big to shovel but they are close enough to have 6 or 8 in a 1/2 mile stretch which we have a many bunches of driveays.) My 14 year average is just under 12 pushes per year. Last year I had 18 and the year before I had 6. Year before that I had 17. Very much variable. Old truck needs about $1,000 or so of work each year. Gas, insurance, wages. Do the math and it's great. Last year was around $60k gross.

Edit: I don't leave the truck to shovel anything and I don't do summer maintenance for any of my clients.

I'm probably giving too much information but my philosophy is I'm an open book.

I have other opportunities that are pulling me away from snow and I'm trying to determine how to end my snow career. From the info above you can see that there is a "potential" for a great amount of income.

I know there is good value to the tight route I built and would like to get all your input on what you think I can ask for. I have a ton of ideas on how to divest this but ultimately, if I remove the equipment and just sell the route what do you think is the value?

Please be honest. I get that it's not worth the moon. I also get that that if I find the right guy that looking to build his business he can instantly gain winter income.

I also realize that not all customers will follow over to the new owner. I'm thinking a purchase price based on who follows. Yes there is a level of trust between me and the buyer but it also puts a level of work on me to secure the clients for him as well. This I'm willing to do.

Big question is how much? Route is tight. 1/2 a tank of fuel each truck each push. Most clients have been loyal for years but it's a revolving door on about 10% of the route each year. Moving, bought a snow blower, etc.

Thoughts? Anyone want to buy it?


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## M&M (Sep 8, 2008)

Edit: These are "hand shake deals" as most driveway "contracts" are done. Also, I have received a lot of hardscaping work from them over the years. All the proper insurances have been in place as well.


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## Sawboy (Dec 18, 2005)

A route has zero value. There is zero guarantee anyone stays.


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## Arrowbrook99 (Oct 22, 2017)

Ditto


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## FredG (Oct 15, 2012)

In theory you are trying to sell something you don't own. I gave away a bunch of small commercial to the best qualified contractor I could find to protect my own name. It might be worth a small amount to someone as a lead fee. You did a good job building a nice little route but there is not much of a reward in the end. Good Luck


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## iceyman (Mar 1, 2007)

To say zero value might be a little harsh


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## FredG (Oct 15, 2012)

iceyman said:


> To say zero value might be a little harsh


Well whats it worth then, This is what the OP is asking lol.


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## ALC-GregH (Nov 26, 2008)

It's hard to sell something you don't own!


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## framer1901 (Dec 18, 2005)

A declining percentage of paid invoices maybe over the next two or three years. What that percentage number starts at is a good question. 10/5/2 over three years?? That to me seems viable...

Selling accounts would really be like a commissioned salesperson... They do have value.


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## iceyman (Mar 1, 2007)

FredG said:


> Well whats it worth then, This is what the OP is asking lol.


Its worth what anyone will give you. Im willing to bet he can get something for it. And i bet a majority of the people would go with the new guy just out of convenience of not having to find another plow guy


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## iceyman (Mar 1, 2007)

Or at least give the new guy a chance..


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## plow4beer (Nov 16, 2016)

It has value, but probably not what your expecting..the deal would have to heavily favor the buyer..but the fact it's all "handshake deals" & per push billing pretty much ruins all value imo. Not to say I've never done or have anything like that, but it's not for "typical customers". Too risky for the buyer, unless you helped the first season to retain and service the accounts, then you might get something..?..if we were talking seasonal accounts under written contract this would be a different conversation.

Can you hand them down to your employee or is he getting out too? Sounds like an easy & profitable route? Why not just hire another driver & keep them? Leaving you with simply customer relations & billing. 2 employees to do all the account servicing & equip maintenance.


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## Randall Ave (Oct 29, 2014)

You could advertise on Craigslist, see if anyone bites. But your selling basically good faith. Your not going to get big money.


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## Sawboy (Dec 18, 2005)

Zero value.


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## Freshwater (Feb 28, 2014)

I literally can't give my driveways away. They pay good, I just don't want to do drives anymore. Ive been trying for weeks.


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## JMHConstruction (Aug 22, 2011)

You're only selling leads. Not sure what company's who sell leads (homeadviser type companies) charge for a driveway lead, but I would say that is a max price.


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## plow4beer (Nov 16, 2016)

Freshwater said:


> I literally can't give my driveways away. They pay good, I just don't want to do drives anymore. Ive been trying for weeks.


It's amazing how value of driveways can vary so greatly from one region/area to the next. For example, say you get a 6pack to plow a drive in buffalo, ny...for that same amount of work you would get a kegger here. Driveways, for what we have invested, are the most profitable plowing jobs we do...by a long shot. Mmmm did I say shot...this conversation has made me thirsty


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## leigh (Jan 2, 2009)

framer1901 said:


> A declining percentage of paid invoices maybe over the next two or three years. What that percentage number starts at is a good question. 10/5/2 over three years?? That to me seems viable...
> 
> Selling accounts would really be like a commissioned salesperson... They do have value.


This has been asked before. This seems to be the most viable idea. Devil is in the details.


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## JD Dave (Mar 20, 2007)

It's worth what someone is willing to pay. Takes years for some guys to start grossing 60k. If you hold someones hand for first few storms and introduce him to the new clients it's definitely worth something.


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## BUFF (Dec 24, 2009)

JMHConstruction said:


> You're only selling leads. Not sure what company's who sell leads (homeadviser type companies) charge for a driveway lead, but I would say that is a max price.


When I subbed for a guy who decided to get oot I picked the property's I wanted and paid him 30% of what he was changing per push for the property's for the leads and referral. I thought that was fair for all.
I got oot this year and gave a buddy the same deal.


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## Jacobmb (Dec 3, 2013)

When you say your average price is about $45 per drive, is that because you bill per push or are your clients on contract and that figure you base on average snowfall/services?


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## Jacobmb (Dec 3, 2013)

You have real assets. I wouldnt listen to anyone who says what you have is worth zero. The trucks and plows are worth something. The trucks and plows with drivers, insurance and contracts/route is worth a whole bunch more!I guess the best answer I can give is that what you have built is worth exactly what someone else is willing to pay for it. If you are starting to think of an exit strategy that is good news! I would start planning now for next winters exit.

You can negotiate anything you want depending on the buyer and their situation. I would reach out to every single client around March 2018 to let them know that you are offering 2 years of snow removal on contract for a discount. Sign up as many contracts as you can and follow up with every one else in August and September 2018. The more signed contracts you have the more you will sell your business for. Advertise your business for sale everywhere all spring summer and fall and in the sale includw your business name, phone number, contracts, employees, insurances, vehicles etc. Ask for a number that you could drop by a few grand and still walk away from the deal happy with. Advertise *Work to own a possibility! and see what offers come in.

Best case you find a young buck who is willing to put in sweat equity and work in your place next winter and let the profits go towards his purchase of the company for $xx,xxx. Worst case hire another driver for your truck and keep the operation going! Alternatively, offer the existing employee driver a chance to own a peice (since he/she already knows half the operation!)


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## BUFF (Dec 24, 2009)

Jacobmb said:


> *You can negotiate anything you want depending on the buyer and their situation. I would reach out to every single client around March 2018 to let them know that you are offering 2 years of snow removal on contract for a discount. Sign up as many contracts as you can and follow up with every one else in August and September 2018. The more signed contracts you have the more you will sell your business for. Advertise your business for sale everywhere all spring summer and fall and in the sale includw your business name, phone number, contracts, employees, insurances, vehicles etc. Ask for a number that you could drop by a few grand and still walk away from the deal happy with. Advertise *Work to own a possibility! and see what offers come in.*


So you'd miss lead customers into thinking they're signing a 2 year deal with you to make your business look better to a potential buyer before the 2 year contract starts..... I'm my book that's ethically and morally wrong and will come around full circle to bite you in the iss....


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## Jacobmb (Dec 3, 2013)

Perhaps I didn't elaborate enough.

I was in no way suggesting to mislead anyone.

It is very likely when selling his business he will find someone who is willing to take it over but who can't afford to take it over and so this would likely be a scenario where he would still retain ownership in the business but someone else will be working off the purchase price in labor. In this type of scenario he would still retain ownership of the company for a year or two.

In my book there is absolutely nothing wrong with offering clients to sign a 2-year contract for snow removal for a discount. This way he could sub out the work and still earn a profit and have that as an option. He could also find someone else to work and keep his company and have that as an option. In the event he found someone who had cash who is willing to purchase everything and for a price he is willing to let everything go he could easily call clients and let them know that the business is changing hands. If clients want to cancel a percentage of deposits could be refunded.

I don't really see a problem there.


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## thelettuceman (Nov 23, 2010)

I got out of snow plowing after 38 years in the business. July 1, 2017 , I sent a letter to all of my customers telling them I was getting out of the business. This gave them plenty of time to find someone.

I purposely did not try to sell the business. I did not want a potential slip and fall to come back and get me. Although I could have sold the business, the fact that I would be saying " here is the next guy " ... and someone slips and falls based on my "next guy" recommendation, had me think do not sell but exit.

I know the above paragraph is not the smoothest english, I hope you understand my thinking.


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## JMHConstruction (Aug 22, 2011)

Jacobmb said:


> You have real assets. I wouldnt listen to anyone who says what you have is worth zero. The trucks and plows are worth something. The trucks and plows with drivers, insurance and contracts/route is worth a whole bunch more!I guess the best answer I can give is that what you have built is worth exactly what someone else is willing to pay for it. If you are starting to think of an exit strategy that is good news! I would start planning now for next winters exit.
> 
> You can negotiate anything you want depending on the buyer and their situation. I would reach out to every single client around March 2018 to let them know that you are offering 2 years of snow removal on contract for a discount. Sign up as many contracts as you can and follow up with every one else in August and September 2018. The more signed contracts you have the more you will sell your business for. Advertise your business for sale everywhere all spring summer and fall and in the sale includw your business name, phone number, contracts, employees, insurances, vehicles etc. Ask for a number that you could drop by a few grand and still walk away from the deal happy with. Advertise *Work to own a possibility! and see what offers come in.
> 
> Best case you find a young buck who is willing to put in sweat equity and work in your place next winter and let the profits go towards his purchase of the company for $xx,xxx. Worst case hire another driver for your truck and keep the operation going! Alternatively, offer the existing employee driver a chance to own a peice (since he/she already knows half the operation!)


I could be wrong, but I thought he was only selling the route. I assume that's what everyone is talking about when stating it's worth nothing.


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## Jacobmb (Dec 3, 2013)

Open gave some detail about the trucks condition and maintenance costs. I assumed he wanted to sell it along with route. I could definitely be wrong.


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## FredG (Oct 15, 2012)

This is only about the 100 time this been discussed? Most think it's worth a lead fee or squat, Some think it's worth money because the OP did a good job building a successful profitable route.

No equipment with the purchase, A person or a driveway is not your property to sell. This is not retail, There is a lot to say about selling a business. Plow4beer pretty much is spot on.

Meaning staying on and getting some 2 -3 year contracts. I can knock on doors with a folder with qualifying reference and right equipment and pretty sure I could score 40 drives. Can I keep them is a shot in the dark,

Some of you guys should do a search on the subject before possibly responding. These are the type of post that go south. Whats next, Gas or diesel, New or used, Color, Auto or manual. Get the pic. Peace Out.


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## plow4beer (Nov 16, 2016)

FredG said:


> This is only about the 100 time this been discussed? Most think it's worth a lead fee or squat, Some think it's worth money because the OP did a good job building a successful profitable route.
> 
> No equipment with the purchase, A person or a driveway is not your property to sell. This is not retail, There is a lot to say about selling a business. Plow4beer pretty much is spot on.
> 
> ...


I agree Frederick...and your new meds must be working because I think you & I might actually be able to get along


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## Freshwater (Feb 28, 2014)

I'm pretty sure as soon as soon as the business is sold all existing contracts are void, or can be voided by the home owner without penalty.


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## plow4beer (Nov 16, 2016)

Freshwater said:


> I'm pretty sure as soon as soon as the business is sold all existing contracts are void, or can be voided by the home owner without penalty.


Maybe....depends on if they spit in their palms before shaking


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## Randall Ave (Oct 29, 2014)

If he's selling the trucks and plows, they are worth current market value depending on condition. The driveways are worth mabey one storms worth of income for a finders fee. The loyal customer is staying because of him. There's no guarantee that they will stay. You do not own a customer.


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## BUFF (Dec 24, 2009)

FredG said:


> Whats next, Gas or diesel, New or used, Color, Auto or manual. Get the pic. Peace Out.


Gas for plowing, Diesel for pulling
New unless you find the right deal
White
Manual which leaves only new Dodges, Fords till '10 and GM's suck....
Direct lift
Studded Duratracs
Single Stage up to 8-10"
Have a contract in place
Don't work for free

The rest of what ewe mentioned is on point.


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## M&M (Sep 8, 2008)

Thanks for all the responses guys. Appreciate it. Some really good food for thought.


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## Mr.Markus (Jan 7, 2010)

I had a guy low ball offer me a price on a dump truck I was thinking of selling, when I told him what I wanted for it he tore into everything he didn't like about it. I don't see value in yielding my value to you because you are in the market for something different or think the value is lower. Of course you think that , it’s not yours and you want it.
No value in a proven stash of paying customers??? In the 25 years that I have been selling services, the hardest part was never the work. It was finding and selling the customer, there is value there
What all these people who don’t see it are telling you, is,that the only value in this business left is, the graveyard of equipment you are creating is your only redeemable asset when you want out, if that’s the case what’re we all doing..


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## M&M (Sep 8, 2008)

I just wrote a long reply but my computer froze and I lost it. I have to run out for the day but will update later tonight. I have a lot more thoughts that would like input on.


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## FredG (Oct 15, 2012)

plow4beer said:


> I agree Frederick...and your new meds must be working because I think you & I might actually be able to get along


Of course we can get a long, Before they got me fixed up I was a lunatic. I couldn't concentrate or keep things in context.. Just looking to fight lol.


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## M&M (Sep 8, 2008)

From what I'm taking away is all the responses are a great help. Even the zero value responses. I get it. For a lot of buyers (established snow companies) there is little value in their eyes. Which leads me down the road to think that I need to find someone who is relatively new to the industry and is not maximizing his potential each storm. 

I'm trying to put myself in the buyers shoes for a minute. If this was say 13 years ago and I was couple years into plowing and knew that it was going to be a long term play for me, I would have jumped all over this opportunity. Now I didn't have any money to pay for it so I would have wanted to do a payment plan throughout the winter and allow the route earnings to pay for the purchase price.

I asked a couple good friends of mine who are established in the snow game what the thought and one flat out said he would never pay for accounts. my response to him was would you pay $100 for an account that brought in $100,000? He obviously said yes. That shows that there is "some" value.

It will cost someone money to build a similar route. Whether it's advertising dollars, your time knocking on doors, or the missed income for 2 years while you build it. It cost money in some form. That's going to be part of my selling strategy.

I spent money building the route over the years. Not a ton but it did cost money and time.

As far as equipment, my philosophy is everything is for sale for the right price. From the shirt off my back to my house and everything in between. I'm sure there will be a price for route and price for equipment. If that means 2 different people buy things that's cool with me. Equipment is easy to price.

Clearly, I'm looking to maximize what I can get for the route. If the max is $100 then I'll take it. Bring the wife out for a moderately priced dinner and a couple of drinks. Haha. If it's more then I'm going to try to find it.

I had a conversation with a young guy who is a go getter. He has been in the lawn care business for 2 years and the snow biz for 1. He expressed interest. I'm going to start the conversation with a few other guys I know who plow in my route area and get their input. There really are not a ton of players where my route is because most focus on commercial which might hurt me but who knows?

I do like the declining % idea but I don't want to be married to this for 3 years. I'm thinking that it needs to be based on what accounts stay with the new guy.

I forget who said it but the idea of hiring another guy and running the business from my desk doesn't really appeal to me. I think you either need to be fully in or fully out with snow. I'd like to have my winter back and be able to plan vacations and even nights away.

Lastly, I was never a fan of hearing the argument that our business are only worth the equipment. Like I mentioned above, it takes money to build a business. There is value there. I just need to find the right guy who sees the value. I've accomplished a lot of goals with my summer and winter business and I intend to accomplish this goal as well.

I think we started a good conversation on this and would like any and all further input. It can help a lot of people on the buying and selling side here.


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## JMHConstruction (Aug 22, 2011)

M&M said:


> From what I'm taking away is all the responses are a great help. Even the zero value responses. I get it. For a lot of buyers (established snow companies) there is little value in their eyes. Which leads me down the road to think that I need to find someone who is relatively new to the industry and is not maximizing his potential each storm.
> 
> I'm trying to put myself in the buyers shoes for a minute. If this was say 13 years ago and I was couple years into plowing and knew that it was going to be a long term play for me, I would have jumped all over this opportunity. Now I didn't have any money to pay for it so I would have wanted to do a payment plan throughout the winter and allow the route earnings to pay for the purchase price.
> 
> ...


To me, a route this size would have value. It would also take me back to the "pay for leads" comment I made earlier. Out of 70, surely at least 10 would sign on with the next guy assume prices were similar. Like you said above, it would cost something to gain 10 customers by myself. Most established companies know what each of their new customers cost them to gain, so there is value in a new customer.

With that said, I personally would want some kind of guarantee for X amount of new customers or something (not sure exactly how you could go about doing that), unless the deal was low enough to make it worth taking the risk.

Your not really selling a business, only potential customers. It's a bit of a gamble for the buyer. I would guess at least 20% would resign as long as the old provider recommended the new, and the new was a half ass salesman.

Just my 2 cents


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## Philbilly2 (Aug 25, 2007)

M&M said:


> Lastly, I was never a fan of hearing the argument that our business are only worth the equipment. Like I mentioned above, it takes money to build a business. There is value there. I just need to find the right guy who sees the value. I've accomplished a lot of goals with my summer and winter business and I intend to accomplish this goal as well.


Have you ever had a "professional business evaluation" done?

I am sorry to tell you, but your business is only worth the equipment, property, and any other tangible assets. Along with cash on hand...

The money that you spent to "build your business" should have been re invested into equipment,property, and any other tangible assets.

The only way that a route will be worth any real money is if you hold a large enough piece of the pie that someone else wants or needs to pay for.


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## Philbilly2 (Aug 25, 2007)

I will say that this has been about the most civilized discussion on this topic I have seen in my 10 years or so on here...


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## theplowmeister (Nov 14, 2006)

Back in 2000 I sold my rout 104 clients. It sold for %50 of the income of one plowing.

The worth of the plow rt is what it will sell for. For a brick and mortar business the price is usually between 5 and 10 times its annual sales plus invitorie. For some reason not plow routs.

When you buy a brick and motor business there is no guarantee that anyone will walk in the door and buy. but it sells for a lot more than plow routs.

Advertise and write a letter to your customers get a response if they will go with the new owner. That would increase the sale price.


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## framer1901 (Dec 18, 2005)

To the folks that say there is no value: 

1) What does it cost you to get a new customer? Yellow page add, website cost, seo management, truck lettering, business cards, local adds - those are all things we spend money on to get new customers.

2) I hand you 70 customers for the upcoming season, all you have to do is perform, is there not value there?

A salesman should earn no commission?


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## Unraveller (Jan 28, 2014)

framer1901 said:


> To the folks that say there is no value:
> 
> 1) What does it cost you to get a new customer? Yellow page add, website cost, seo management, truck lettering, business cards, local adds - those are all things we spend money on to get new customers.
> 
> ...


For us a driveway "Sale" costs about $50 and 20 minutes of time. That's about 10% cost/annual revenue.

If I was to buy this from the OP, I would say I would off to pay him 5% of the annual gross of the clients that stayed on.

That's roughly equal to one push per client that signs on. The more clients OP helps me sign on, the more money he gets. That puts it on par with traditional advertising, and he might pull a few thousand from the deal. The density of the route is also attractive.


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## Broncslefty7 (Jul 14, 2014)

i sold a chain of 25 residentials a few year ago for a grand. The storm total on the 25 was about $2,800.00. Basically once we reveiwed all the details and he made the purchase i sent a letter out to the customers stating what was happening and then i drove from house to house introducing the new guy to all of the customers. he retained all of them and continues to do the route to this day.


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## Philbilly2 (Aug 25, 2007)

framer1901 said:


> To the folks that say there is no value:
> 
> 1) What does it cost you to get a new customer? Yellow page add, website cost, seo management, truck lettering, business cards, local adds - those are all things we spend money on to get new customers.
> 
> ...


1) You should not be paying those costs directly out of pocket. That customer cost acquisition should be passed back onto on to the customer threw your overhead via invoices.

2) If you hand someone 70 customers that have zero obligation to stick with the new person after you hand them to that person, then they are worth zero. Someone may be willing to pay you for them, but from a business evaluation standpoint, they are worth zilch...

A salesman's commission typically is also a percentage of the amount of a transacted sale, again... paid by the customer.


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## Broncslefty7 (Jul 14, 2014)

right so why not introduce the new guy to them face to face, who ever agrees to stay and actually does you collect a finders fee of lick 75-100 bucks.... 

your telling me that if someone handed you a commercial route and got the contracts signed with you, you wouldnt see any value in that? he can do the same thing just on a residential level, as soon as they find out he is not going to do it anymore they will ask if he knows someone else. or he should say, i am retiring however i have someone that i trust that will continue performing the service for you. most customers will use that person regardless, its up to the new guy to retain them from year to year.


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## Philbilly2 (Aug 25, 2007)

Broncslefty7 said:


> right so why not introduce the new guy to them face to face, who ever agrees to stay and actually does you collect a finders fee of lick 75-100 bucks....
> 
> your telling me that if someone handed you a commercial route and got the contracts signed with you, you wouldnt see any value in that? he can do the same thing just on a residential level, as soon as they find out he is not going to do it anymore they will ask if he knows someone else. or he should say, i am retiring however i have someone that i trust that will continue performing the service for you. most customers will use that person regardless, its up to the new guy to retain them from year to year.


I agree with a signed contract... it has value.

A handshake holds water like a screen door on a submarine when it comes to money. Get burned a couple times and you will learn.

Here, let me try a different route...

So I want to sell you this route... you give me 10K and I will give you the names and addresses of a route that will yield 200K annually. I will introduce you to the people and tell them to go with you because you are the best (next to me of course ) But, I hold no contracts with these people, so they don't have to go with you, and you could be giving me 10K to introduce you to some people you will never hear from again in your life.

See what I am saying?

And what is to say that the rumor on the street spreads that I am retiring, and some young buck wants that piece of pie and steals all your future customers? What do we do then? You just paid me 10K and got nothing more than some handshakes from these "accounts"


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## Unraveller (Jan 28, 2014)

Philbilly2 said:


> I agree with a signed contract... it has value.
> 
> A handshake holds water like a screen door on a submarine when it comes to money. Get burned a couple times and you will learn.
> 
> ...


Payout is a % of people that Sign Contracts with Buyer.

Simple.


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## Broncslefty7 (Jul 14, 2014)

i must have missed the part where he did not have contracts.


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## Philbilly2 (Aug 25, 2007)

Listen, so this is why I say that it is a crock. You can acquire the work without purchasing. I did it a few years back.

Another shop in my area, the guy was retiring. I was at his auction where he was selling all of the tools, shop items, trucks, etc...

I just happened to bump into him and ask him what he was planning to do with the company "name" as it was a very well known name in the area. He said he would sell it for $xxx,xxx.xx, I said OH... wow... OK, no but thanks. I proceeded to sit threw the auction, (planning my attack) left that day and started hitting the streets on Monday AM first thing. Calling the factories, schools, business, all the stuff he had for years and years and informing them that he has retired and if they need someone to handle their facility to give me a chance and left them with some good references.

SO...

Couple weeks later, that company was sold to one of my other competitors for $xxx,xxx.xx. 

The issue was that I had already got my foot in the door with many of the customers that had called this shop for the past 30-40 years.

The branch made it a bit over a year with terrible monthly margins (from what I hear) and was closed earlier this year due to the business branch not being profitable. 

So, the morel of the story is... you can't sell something that you don't own...


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## Broncslefty7 (Jul 14, 2014)

^^smart guy

so how many of his accounts did you sign?


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## Unraveller (Jan 28, 2014)

Philbilly2 said:


> I just happened to bump into him and ask him what he was planning to do with the company "name" as it was a very well known name in the area. He said he would sell it for $xxx,xxx.xx, I said OH... wow... OK, no but thanks. I proceeded to sit threw the auction, (planning my attack) left that day and started hitting the streets on Monday AM first thing. Calling the factories, schools, business, all the stuff he had for years and years and informing them that he has retired and if they need someone to handle their facility to give me a chance and left them with some good references.


So... You got lucky and spent time doing sales?

Time is not free, and luck is not guaranteed. All those things have value, What value? Depends on the profitability of a contract, but if you could have saved all that time and gotten a warm transfer, for $5? $50? xxx?

This thread is full of operators, and sadly lacking in sales and management.


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## Philbilly2 (Aug 25, 2007)

Broncslefty7 said:


> ^^smart guy
> 
> so how many of his accounts did you sign?


I took the Hospital, handful of factories (of which one of them has 8 buildings in the town and another has 12 buildings) 2 School districts, and a bunch of small one location business'.

I have since lost 1 of those above school districts. 

There is not many signing of contracts in my line of work on the service end of things. You are in or you are out. They issue PO's or have you do it on T&M for each project. It is the facility manager's discretion.

This is also why I have a tough time paying for a name or a list due with out a contract tied to it due to the fact that as soon as there is a new "Sheriff in town", that new facility manager can drop you like bad habit and get "his guy" in... dog eat dog world...


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## Philbilly2 (Aug 25, 2007)

Unraveller said:


> So... You got lucky and spent time doing sales?
> 
> Time is not free, and luck is not guaranteed. All those things have value, What value? Depends on the profitability of a contract, but if you could have saved all that time and gotten a warm transfer, for $5? $50? xxx?
> 
> This thread is full of operators, and sadly lacking in sales and management.


Yeah, you are correct. If we are talking about $50... I would have ripped his arm of trying to get $10,000 in to his hand to purchase the "name" just for the phone number being around for 40 some years. I am not talking about $50 or even $10,000 though. I am talking about a six figure price tag for a name and phone number with no for sure contracts that any customer has to stay with me.

Not sure what the "operator" comment really means?


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## Unraveller (Jan 28, 2014)

Philbilly2 said:


> Yeah, you are correct. If we are talking about $50... I would have ripped his arm of trying to get $10,000 in to his hand to purchase the "name" just for the phone number being around for 40 some years. I am not talking about $50 or even $10,000 though. I am talking about a six figure price tag for a name and phone number with no for sure contracts that any customer has to stay with me.
> 
> Not sure what the "operator" comment really means?


Yeah I'm not really talking about buying a business, that's a whole separate discussion, just the route part.

The Operator comment is just means that most guys here seem to be viewing this as a "I'll get the business myself, why pay someone" and that's an Owner-Operator approach.

Talk to a Sales Manager at a major service provider (not necessarily snow, just any kind of business that has dedicated sales staff), and ask him how much $10,000 in new business is worth. They'll have a number, based on Margin/CLV etc.

To me, if you offered my 1000 signed driveway clients at my current rate, it would be worth $200 EACH if I want a 1 year payback. $400 if I wanted 2 year, $600 if I wanted 3 year payback (manufacturing industry standard).

Now I can acquire new business at a rates of $10-50 per client myself through various methods, but my acquisition rate is finite, maybe 300 customers per year through the various methods. So what price would I pay for 1,000 signed customers? Honestly? $100,000 or so. $100 each, and I'll take as many people will sell me. Although I know I can probably get them for $30 each from any contractor around here that wants to sell.


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## Philbilly2 (Aug 25, 2007)

Unraveller said:


> Yeah I'm not really talking about buying a business, that's a whole separate discussion, just the route part.
> 
> The Operator comment is just means that most guys here seem to be viewing this as a "I'll get the business myself, why pay someone" and that's an Owner-Operator approach.
> 
> ...


[/QUOTE]

Understood and Sure...


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## Broncslefty7 (Jul 14, 2014)

Unraveller said:


> Yeah I'm not really talking about buying a business, that's a whole separate discussion, just the route part.
> 
> The Operator comment is just means that most guys here seem to be viewing this as a "I'll get the business myself, why pay someone" and that's an Owner-Operator approach.
> 
> ...


agreed, buying accounts fast tracks growth and take a lot of the work out of customer acquisition. So long as you actually retain the customers. Cant do it without contracts.


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## FredG (Oct 15, 2012)

Understood and Sure...[/QUOTE]
It appears a lot of these fellas see value, If so the route should be sold by now. In construction people hire me because they know me, Like me or my work and price. I have picked up commercial accounts just because they got tired of hearing from me when I started legit biz takes time.

Sometime if I send some guys to do something and I'm not there I get a call. Who is supervising the job. Most of the time you get repeat business because of who you are and your clients trust you and like you.

It's very possible the OP clients may take to a new guy. It's also very possible they don't. I would not want some new guy on my property I don't know unless it is my decision not cause a contractor wants out.

A hand shake deal is between two guys, I'm not so sure of this 3rd party thing. Again the Op did a good job building a profitable route, unfortunately there is not a lot of reward in the end on hand shake deals.


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## ktfbgb (Jan 31, 2016)

Everyone here is missing the point, except for Phil. We are talking about a route WITH ABSOLUTELY NO SIGNED CONTRACTS. So thechically he doesnt have a route, he is selling you a phone book. Which is normally free. Yes if he just signed the entire route up for new 3 year seasonal contracts, then yes there would be value. I don’t really buy the customer acquisition savings argument, because you aren’t acquiring any new customers. There is a possibility of acquiring new customers. And you still have to spend all the time selling them, ang going through the contract process with them. 

I would never provide services without some type of written agreement. Otherwise they have nothing compelling them to pay. If we do emergency one time plows, which is pretty much never because I’m bizzie, they have to pay cash, or card, up front, and sign a damage waiver, before performing the service.


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## plow4beer (Nov 16, 2016)

plow4beer said:


> It has value, but probably not what your expecting..the deal would have to heavily favor the buyer..but the fact it's all "handshake deals" & per push billing pretty much ruins all value imo. Not to say I've never done or have anything like that, but it's not for "typical customers". Too risky for the buyer, unless you helped the first season to retain and service the accounts, then you might get something..?..if we were talking seasonal accounts under written contract this would be a different conversation.
> 
> Can you hand them down to your employee or is he getting out too? Sounds like an easy & profitable route? Why not just hire another driver & keep them? Leaving you with simply customer relations & billing. 2 employees to do all the account servicing & equip maintenance.





ktfbgb said:


> Everyone here is missing the point, except for Phil. We are talking about a route WITH ABSOLUTELY NO SIGNED CONTRACTS.


And to imagine this was established by a Richard that drinks too mulch, by the 12th post of this thread.

I will say this site is a wealth and abundance of knowledge, & comic releif..just not sure which of more sometimes.:waving:


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## BUFF (Dec 24, 2009)

plow4beer said:


> And to imagine this was established by a Richard that drinks too mulch, by the 12th post of this thread.
> 
> I will say this site is a wealth and abundance of knowledge, & comic releif..just not sure which of more sometimes.:waving:


Dean Wormer keeps the "comic relief" in check......:waving:


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## ktfbgb (Jan 31, 2016)

plow4beer said:


> And to imagine this was established by a Richard that drinks too mulch, by the 12th post of this thread.
> 
> I will say this site is a wealth and abundance of knowledge, & comic releif..just not sure which of more sometimes.:waving:


I forgot about it since the post was way far back. But, ya, you called it first.


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## FredG (Oct 15, 2012)

plow4beer said:


> And to imagine this was established by a Richard that drinks too mulch, by the 12th post of this thread.
> 
> I will say this site is a wealth and abundance of knowledge, & comic releif..just not sure which of more sometimes.:waving:


That's okay I smoke to much lol, Much more fun before the Docs fixed me up. I go back and laugh at my own threads now, LMAO


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## Sawboy (Dec 18, 2005)

Even with contracts, biz sells, contracts are null and void. 

It’s worth
ZIP....ZERO.....NADA....NOTHING....DEVOID OF VALUE......BUPKUS


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## Philbilly2 (Aug 25, 2007)

Sawboy said:


> Even with contracts, biz sells, contracts are null and void.
> 
> It's worth
> ZIP....ZERO.....NADA....NOTHING....DEVOID OF VALUE......BUPKUS


Woah....


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## M&M (Sep 8, 2008)

Sorry for the delay in response. Got some snow and busy with christmas and stuff. As always the input is great to hear. Hearing both sides of the coin only helps in my expectations of what I can get for it and more importantly how much effort I should be putting in to selling it. Again, if I am to expect little to no value then I won't put much effort in.

The route is in a wealthy area with about 8,000 homes where seasonal driveway contracts are non existent. Most if not all of the guys I know that plow driveways don't have signed contracts. I'm not defending it or saying it's a good just giving you what the environment looks like here.

As far as another company poaching my customers, I'm not sure how they would do it as nobody knows my route. Sure they may have seen me in neighborhoods over the years but that is not a concern of mine. Maybe i should be?

I keep going back to the idea that if someone approached me with this opportunity 10 years ago I would have jumped on it and judging from the responses here I probably would have over paid for it. But I went my first 5 years of plowing before I had over just 35 driveways. The loss of potential income alone would have paid for the route cost. Let me rephrase that. I missed out on a lot of money in my early career plowing by not maximizing what I could accomplish each storm. In the business world that is a cost.

I just need to find the guy that sees the opportunity like I wish I had back then. That's who will benefit the most from this.


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## theplowmeister (Nov 14, 2006)

Philbilly2 said:


> Woah....





Sawboy said:


> Even with contracts, biz sells, contracts are null and void.
> 
> It's worth
> ZIP....ZERO.....NADA....NOTHING....DEVOID OF VALUE......BUPKUS


NOT true By cell carer sold and my contract with them was not null and void, same as with my Car when Fiat bought the Co or my cable TV. selling a Co does not void contracts.


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## iceyman (Mar 1, 2007)

M&M said:


> Sorry for the delay in response. Got some snow and busy with christmas and stuff. As always the input is great to hear. Hearing both sides of the coin only helps in my expectations of what I can get for it and more importantly how much effort I should be putting in to selling it. Again, if I am to expect little to no value then I won't put much effort in.
> 
> The route is in a wealthy area with about 8,000 homes where seasonal driveway contracts are non existent. Most if not all of the guys I know that plow driveways don't have signed contracts. I'm not defending it or saying it's a good just giving you what the environment looks like here.
> 
> ...


Exactly.. its about finding someone who finds value in it. Up where you are its a different world than the masses here in the burbs if whatever city. Like i said earlier i think your customers will be happy that you have a replacement and they dont need to find another guy


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## Sawboy (Dec 18, 2005)

theplowmeister said:


> NOT true By cell carer sold and my contract with them was not null and void, same as with my Car when Fiat bought the Co or my cable TV. selling a Co does not void contracts.


Apples and Oranges Plowmeister.


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## iceyman (Mar 1, 2007)

Sawboy said:


> Apples and Oranges Plowmeister.


What if 80% of his customers agree to a new contract(or just says yes to service) with the new guy. No value then? May take a little work on ops part but if he has 30 spots signed up for new guy than he did his job and can make money off of it


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## FourDiamond (Nov 23, 2011)

The question should be how much is the route worth. Garbage routes are sold everyday. A neighbor just sold his route $400,000 including the trucks. Which the new owner promptly junked. A plow route is no different. On the contact side, unless the contract has a void clause due to sale, the parties have to adhere to the terms of the contract, no different than a lease agreement. The tough part is determining the value, for that you need P/L statements, etc. Unfortunately, most small operators don't keep good records.


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## ktfbgb (Jan 31, 2016)

FourDiamond said:


> The question should be how much is the route worth. Garbage routes are sold everyday. A neighbor just sold his route $400,000 including the trucks. Which the new owner promptly junked. A plow route is no different. On the contact side, unless the contract has a void clause due to sale, the parties have to adhere to the terms of the contract, no different than a lease agreement. The tough part is determining the value, for that you need P/L statements, etc. Unfortunately, most small operators don't keep good records.


And like we keep saying. He has no contracts. Nothing. He just plows and then hopes they pay him something. Everyone keeps saying the contract transfers. That's IMPOSSIBLE when there is no contract.


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## ktfbgb (Jan 31, 2016)

theplowmeister said:


> NOT true By cell carer sold and my contract with them was not null and void, same as with my Car when Fiat bought the Co or my cable TV. selling a Co does not void contracts.


Again you had a contract with the cell carrier. This guy has zero contracts


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## FredG (Oct 15, 2012)

Why is this discussion all about contracts now, The OP stated they are all handshake deals. Lets make another post for Business selling with Contracts.

I say it's worth squat or a lead fee. If you think it's worth something leave a number! This is what the OP is asking! Whatever he can get is not going to cut it. If you think it's worth something state a starting value.


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## ktfbgb (Jan 31, 2016)

FredG said:


> Why is this discussion all about contracts now, The OP stated they are all handshake deals. Lets make another post for Business selling with Contracts.
> 
> I say it's worth squat or a lead fee. If you think it's worth something leave a number! This is what the OP is asking! Whatever he can get is not going to cut it. If you think it's worth something state a starting value.


There you go.


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## Sawboy (Dec 18, 2005)

FredG said:


> Why is this discussion all about contracts now, The OP stated they are all handshake deals. Lets make another post for Business selling with Contracts.
> 
> I say it's worth squat or a lead fee. If you think it's worth something leave a number! This is what the OP is asking! Whatever he can get is not going to cut it. If you think it's worth something state a starting value.


Bingo!


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## iceyman (Mar 1, 2007)

What does he make for a 6” storm with the route


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## ktfbgb (Jan 31, 2016)

iceyman said:


> What does he make for a 6" storm with the route


Not enough to get me to pay anything for it without contracts.


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## iceyman (Mar 1, 2007)

ktfbgb said:


> Not enough to get me to pay anything for it without contracts.


Listen i hear ya but you have to understand its a different world in the mountains of newhampshire and vermont. My uncle(who is a crazy mountain man) lives a mile from canada and gets about 200"+ at his house. If a guy tried getting him to sign a contract he would think the guy was trying to scam him. Just the mentality. They do **** different up there.


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## FredG (Oct 15, 2012)

iceyman said:


> What does he make for a 6" storm with the route


What if another reputable contractor gets wind he wants to sell more likely get out? Which he has been discussing with other contractors in the area. I personally would go with the qualifying contractor with out the OP on board the first season or two.

This is business if I could go score them by my name and my years of snow and ice why would I pay. Morally you could be called a rat. This is the world we live in. I have done plenty of work on a handshake. This does not mean these jobs have any value to anybody but myself.

If the mentality of these people would think a contract would screw them this is strange to me. Most think a contract is to protect both parties involved not to mention what stands in a court of law.


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## M&M (Sep 8, 2008)

iceyman said:


> Listen i hear ya but you have to understand its a different world in the mountains of newhampshire and vermont. My uncle(who is a crazy mountain man) lives a mile from canada and gets about 200"+ at his house. If a guy tried getting him to sign a contract he would think the guy was trying to scam him. Just the mentality. They do **** different up there.


Iceyman, my gross is a couple hundred over 3k per push. Most storms only require one push but if its a big one then i push twice and charge twice.

You are correct about NH being different that ESPECIALLY Jersey. I see a lot of my customers around town and we chat and have a beer together. Play golf. It's a friendly community. That's the reason nobody uses written contracts for driveways up here. We all know each other and there is a high level of trust. I'm not sure how contracts would go over with my clients. Especially the long time customers. Why are you changing now M&M? I think it will reduce the trust level. And I have to see these people when I stop plowing so I can't sign them for 2 years then sell it 3 months later.

With all this contract talk, one thing we are forgetting is that verbal contracts are a binding contract. I don't just go out and plow and hope to get paid. I have taken 3 customers to small claims and won each time. Binding contract. Just wanted to bring that up. But on the flip side, I would not say that it is a transferable contract. So I am not selling contracts, I'm selling a list of potential clients. But those clients are loyal to me and trust me. I'm sure I can get a vast majority of them to stick with the new guy assuming his service is similar to mine. That's where I need to find the right person.

I've said it before but nobody is going to be able to steal the clients. Nobody knows my route. I'm not concerned about that.


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## ALC-GregH (Nov 26, 2008)

M&M said:


> I've said it before but nobody is going to be able to steal the clients. Nobody knows my route. I'm not concerned about that.


You're right, they can't steal them. That would be kidnapping!


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## lawntec (Aug 20, 2006)

I firmly believe your route HAS a $ value. I say this because, if someone around me approached me and said: I don't want my route, I have X customers and it makes $Y. I would be very willing to give him money. Therefore, a route does have value...to me! How much is the question.

What I would do:
If you clear $50k per year, and the right buyer was willing to give you $10k up front, then 10% of gross profit per year (max $5k/yr) for the next 2 years. I would list it for $20k but $10k up front and the remaining $10k as contingency of 2 more years.

My numbers are 100% random numbers!!! I don't mean to say it is worth $20k, nor am I saying it is not worth $30-40-50k. But that type of arrangement would be suitable for a non-goodwill company.


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## M&M (Sep 8, 2008)

lawntec said:


> I firmly believe your route HAS a $ value. I say this because, if someone around me approached me and said: I don't want my route, I have X customers and it makes $Y. I would be very willing to give him money. Therefore, a route does have value...to me! How much is the question.
> 
> What I would do:
> If you clear $50k per year, and the right buyer was willing to give you $10k up front, then 10% of gross profit per year (max $5k/yr) for the next 2 years. I would list it for $20k but $10k up front and the remaining $10k as contingency of 2 more years.
> ...


That's kind of my thought. I don't want to be married to this for another 2 years but if I can get more and essentially finance the purchase then I will go that route. I think that will allow the purchaser to use the income from the route to pay for some if not all of the purchase price.

A couple of different times I was "given" a handful (6-10) of accounts. I gladly would have paid for them but either of the 2 guys that gave them to me asked for anything. They just emailed me the list and said have at it. I made the calls and got most if not all of the customers. I ended up sending gift cards to a local restaurant to the guys who gave me the lists as a thank you. The amount of money I made off those 2 lists I estimate at 40-50k. All for a gift card? They didn't know what they had when they gave it to me. Never mind all the extra work I got from those customers too.

The word is out which I'm happy with as I had a friend come up to me the other day asking to have a meeting regarding the route.

I'm convinced that there is value to the right person. I'm going to find that person.


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## EWSplow (Dec 4, 2012)

I did buy some accounts from another contractor once. He was a friend and we were basically helping each other out. I paid him the amount of the first time plowing his accounts. So, plowing once for free got me three years so far with the same clients. Not bad.


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## M&M (Sep 8, 2008)

EWSplow said:


> I did buy some accounts from another contractor once. He was a friend and we were basically helping each other out. I paid him the amount of the first time plowing his accounts. So, plowing once for free got me three years so far with the same clients. Not bad.


That's great value for you.


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## FredG (Oct 15, 2012)

EWSplow said:


> I did buy some accounts from another contractor once. He was a friend and we were basically helping each other out. I paid him the amount of the first time plowing his accounts. So, plowing once for free got me three years so far with the same clients. Not bad.


Not bad at all, But I would not necessarily call that selling a business, I'm thinking that would fall under lead fee. Buying a business legally and smartly you close on it like a piece of real estate. JMO


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## EWSplow (Dec 4, 2012)

That's true. I more or less gave him a finder's fee. They were his accounts. 
However, there was no guarantee that his former clients would continue service. I also knew we could provide better service and people generally don't want to go out and look for a snow service provider. 
I think 10% of annual sales would be a fair price to ask for the route. You'd definitely want references before you introduce the new service provider to your clients.


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