Hi,
I'm on the verge of acquiring our first sit on, i've been thinking about this for a while, wanted the correct piece of kit etc etc, how much, will it do the job etc etc.
I've been to see a local mower place all they do is commercial larger mowers, all re furbs, in fact they hire and lease all of Southend on Sea councils kit to them.
Ive been shown a Kubuto GR 2120, with a brand new 48" rear discharge deck. It s a lot of money but fits on my trailer etc etc.
The next part of my question is i've just put together and won a 3 year contract with domestic client, and tied him down to 18 cuts per year, 18 year 1 at £180 and 18 year 2 and 3 at £150.00, has anyien got a contract that someone will sign that is legally binding, any help will be much appreciated.
Thanks
Andy
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Replies
Hi Richard, Thank you for your reply.
I had a few option to put to the customer, but my aim was to secure 3 years worth of work, as this would help finance the machine i need.
I already had the figure of £180 per cut to him which he accepted, so hence had to give him a dangling carrott. I though he would only accept a 1 year contract at £180, he came back to me with a offer of a 3 year contract at £150.00 which i declined on the basis, of 3 years is great, but i would need year 1 at £180, then i could do the following 2 years at a reduced price of £150.00. The maths add up for me over the period and i can still make at £150.00.
Like anything with a new machine its a learning curve, etc etc, looking forward to the ride, hopefully.
Some might say i'm mad, but £8,100 on a 810 hr kubuto LR2110. with 48" Let hope the business man / women at HSBNC thinks so too. This is a base contract obviously if i obtain the machine we aim to get more bigger areas to help earn from it. It fits on our 51" wide trailer - just!
Still i would like a contract if anyone could help. Much appreciated.
Andy
I can also see you wanting to get the 3 years even at a lower rate. I would not do it myself now but I would have done in past times.
As to a contract I'm not sure in a private setting as you could have a watertight contract but if they change thier mind they change it!!
A good lawyer will get people out of almost anything!
If you want to go down the bigger mower route I would say go for it as the machine will make money in the end.
Others will say don't buy for one contract but you have to start somewhere!!
That machine is very expensive imo. You can get a brand new iseki sxg 216 which is the same class of machine but a slightly smaller deck and much better wet collection for 6.5k brand new.
A Brand new 323 low dump which has the same size deck as the kubota but overall is a much more commercial machine with a larger collector is about the same as the Kubota at 10.5k
I would be a bit worried about the 'descending' charges per year if I was the customer and can see why he has offered 3 x 18 x £150. He knows full well that you can make money at £150.00, as you are prepared to do it at that rate for two years and may well think you will not be as enthusiastic in year 2 and 3, when working for less. Far better to have offered a fixed price of £2880 per year I would have thought, broken down over the cutting period of say 8 months at £360 per month or even annually at £240.00 per month.
Plan for the worst, hope for the best...
Re contract, there are many legitimate reasons for someone to stop the service; quality, death, circumstances etc and so would be difficult to tie down. Also, you may end up locked in as a consequence. Fundamentally, do you think the customer is trustworthy and easy to work with? Much more important that a contract.
I looked at buying a larger mower a couple of years ago and Lister Wilder Kubota Reading had a good asset finance chap who quickly gave me a proposal with funding limit and monthly figures. Better rates than the banks would get to - I would go that route rather than bank loan. Lister also normally have a good selection of ex-demo machines.
That £8k figure seems high, what exactly are you getting for that? Plus re planning for worst, would they give you buy back figure in the first year.