I operate an excavation business and had never been asked this before and my consultants don't know what to tell me and said ask others that might know. I'll try to keep it short, people don't want to read long detailed posts I guess.
I'm currently happy with my size of operation, lifes good not great but I should expand some and have always done it slowly, most of my customers are finacially solid and long term repeat customers and I'm not going to give them up or put them second for anybody.
A younger guy who's been buying a lot of land and renting even more came to me and wanted me to his contracotor of choilce on all his farms owned and rented and do all his work, no big deal until he starting the list of what he wants done. Now this is unchartered waters for me anybody else who buys land only spends so much every year and does that for years, he wants all his projects done basically right away so he can benefit from them from day one and has talked his landlords into spending a certain percent of the rent on projects HE wants done and doesn't want to wait for someone to get there to do them or be on any contractors list and wait. He basically wants to direct traffic and dispatch where I'd go to what farm and when and in order to accomidate him and also keep my current customers I'd have to more than double my operation which could be done and maybe it's time but I"ve never expanded at that rate and it makes me nervous. The other problem is I wouldn't call him financially sound, he's highly leveraged, to the point of a banker somewhere is calling the shots and can shut him down tomorrow if need be, now's he's not the broke flunkie crowd but he's a long way from financialy secure and I've not done much for that group of people before.
My attorneys are talkng contracts and extensinve agreements and I'm sitting there thinking what if something better comes along and I'm locked into a nightmare or I don't like the deal after a little while. He's wanting a long term commitment say 5 years plus but contracts don't mean much if he goes broke and I'm left sitting with hundreds of thousands in equipment I don't need. I told all involved I don't want partners of any kind and everyone agrees thats not the case. The kinds of jobs he wants done fit into my operation but not the amount and timeframe and its hundreds of thousands of dollars per year on him alone. Has anyone heard of this being done before or had experience with anything like it. I could go on for days of the pro's and cons but what do you guys think.
I'm currently happy with my size of operation, lifes good not great but I should expand some and have always done it slowly, most of my customers are finacially solid and long term repeat customers and I'm not going to give them up or put them second for anybody.
A younger guy who's been buying a lot of land and renting even more came to me and wanted me to his contracotor of choilce on all his farms owned and rented and do all his work, no big deal until he starting the list of what he wants done. Now this is unchartered waters for me anybody else who buys land only spends so much every year and does that for years, he wants all his projects done basically right away so he can benefit from them from day one and has talked his landlords into spending a certain percent of the rent on projects HE wants done and doesn't want to wait for someone to get there to do them or be on any contractors list and wait. He basically wants to direct traffic and dispatch where I'd go to what farm and when and in order to accomidate him and also keep my current customers I'd have to more than double my operation which could be done and maybe it's time but I"ve never expanded at that rate and it makes me nervous. The other problem is I wouldn't call him financially sound, he's highly leveraged, to the point of a banker somewhere is calling the shots and can shut him down tomorrow if need be, now's he's not the broke flunkie crowd but he's a long way from financialy secure and I've not done much for that group of people before.
My attorneys are talkng contracts and extensinve agreements and I'm sitting there thinking what if something better comes along and I'm locked into a nightmare or I don't like the deal after a little while. He's wanting a long term commitment say 5 years plus but contracts don't mean much if he goes broke and I'm left sitting with hundreds of thousands in equipment I don't need. I told all involved I don't want partners of any kind and everyone agrees thats not the case. The kinds of jobs he wants done fit into my operation but not the amount and timeframe and its hundreds of thousands of dollars per year on him alone. Has anyone heard of this being done before or had experience with anything like it. I could go on for days of the pro's and cons but what do you guys think.