QuestionI'm about to purchase a partnership in a towing business which has two trucks, a rented lot and does presently 120,000/yr. Approximately how much should i pay for partnership? Second how can we increase business as we only do towing of auto's now.
AnswerThis is such a loaded question as there is not a standard specific answer to it...
Business value depends on many many factors. Not just the income of the business... It would take a business degree to understand most of it and as I am just a tow truck driver / manager I can not answer OWNER QUESTIONS...
The partnership fee, well what seems right to assume part of the debt, liability, risk, and also receive some of the income... As a partner are you going to drive one of the tow trucks, run the office, or are you just going to be the silent partner who provides money for the daily operations like a bank line of credit.
Increasing business now that is not easy to do either. There are several ways to do this, one is just getting out and doing the door to door talk to the business who you think might use the services you have. You can target auto repair shops, body shops, car dealerships, rental agencies, insurance companies, wrecking yards, salvage pools and yards.
And lets not forget motor clubs and break down services...
BUT the biggest key to increasing business is to know your cost of business.. Do you have any idea what it costs to turn the key and drive down the road.. If your expenses are for example $ 37.00 a call to do a 5 mile tow, and you are charging only $30.00 then you are losing money...
I think you really need to look at or develop a business plan and see where you are at...
If you want to discuss it further feel free to do so...
