Business Idea Advice Please - Small Clearance Company

[FashionJules]

Hello There

I am writing to gain some basic general advice as I have an idea yet don't feel I know enough business jargon and conditions to go forward.

A friend of mine has a clearance operation currently in place but is losing jobs and money due to not having large enough transportation. However they can't raise the capital to purchase a new vehicle. I do have the capital but don't wish to lend it to the individual.

My idea is to purchase the vehicle myself and insure the individual to drive it. Then the idea is to take a % of all jobs carried out and once said funds have been raised the individual can either purchase the vehicle from me or expansion into more vehicles and staff could be considered.

Can anyone advise on this idea? Is it too risky or if not what sort of legal contracts/agreements would I need to pull together in order to assure my percentage of income and ownership of assets?

Thanks

 

[mhall]

How will you keep track of the jobs?
What about minor damage/wear and tear? Does your charge cover for this?

As he will only be using your vehicle for certain jobs, how sure are you that the work he is losing out on is sufficient to cover your costs? Surely if he was losing out of plenty of work he would simply lease a vehicle?

 

[webgeek]

I know a couple of removal firms which, while appearing outwardly to be big operations, actually rent the trucks on a per job basis, as well as contract staff on an as needed basis.

Fliers, answer phone, make appointment, bid, close, rent, move, collect.

Their recipe has minimal fixed costs by pushing the most expensive items into becoming variable costs.

Food for thought.

More to what you asked... Do you really want the risks associated with effectively being an hgv leasing company? What happens when they blow the engine, or burn through non-warranty consumables 10x faster than planned (clutch, brakes, tires)?