PDA

View Full Version : Opportunity to buy big contract


Rodriguez11
11-15-2011, 08:39 PM
My parents who own a contracting company doing facility maintenance for many big companies such as riteaid, cvs, blockbuster, dollar general etc... Here's the deal, They picked up a contract this past year for 300 dollar generals to do the lawn maintenance on them this year. Well keeping up with 300 stores and billing all them has just become a little much for her company because they stay busy with all their other work. Question is, how do I offer a fair price on the contract for next season? I know it is my parents but it is still business and that's how I am looking at this. Each property is paid out $50 per cut and done 2 times a month. On the 1st and 15th. That's a total of $30,000 a month in pay out. She currently charges $15 a property per cut to the company she got the contract from which comes out to $9000 a month revenue. The contract is a 9 month contract for a grand total of $351,000. Out of that is $81,000 revenue, any idea on where to make an offer on something like this? Because it is my parents I know she will let me buy the contract over the course of the contract, so from that point it will help me a lot. Any ideas or suggestions?

Dragger
11-16-2011, 08:53 AM
no idea how much to offer

but the price seems very low on the amount of work and billing your going to have to do for 100 usd a month per job.
and I am guessing with 300 stores your going to be subbing it out and taking a percentage of what some one else would make.

let me guess your and your parents are a national company? with out equipment or manpower to do the work just bid low to get contracts and then sub it all out for even less?

IF I am wrong forgive me but I see it happen all the time in the snowplowing industry and its begging to affect the lawn care also.

Steve
11-16-2011, 11:47 AM
Each property is paid out $50 per cut and done 2 times a month. On the 1st and 15th. That's a total of $30,000 a month in pay out. She currently charges $15 a property per cut to the company she got the contract from which comes out to $9000 a month revenue. The contract is a 9 month contract for a grand total of $351,000. Out of that is $81,000 revenue

Ok let's break this down to understand what we are working with.

$50 per cut x 2 = $100 per month per location.
$100 x 300 locations = $30,000 per month.

How does the $15 a month come into play? I got confused there? Is she paying per property to get the bid? Or how does that work?