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Running a mobile product tour and the finances around it

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My company has recently been asked to submit a proposal for running a mobile tour for an existing customer.    This project includes the purchasing/leasing of a truck and trailer, the wrapping of them, hiring the driver, handling the insurance and delivering the vehicles to each event.  Everything but running the event once the trailer is on-site.  This seems pretty straightforward to do the analysis and set the price, but am looking for some guidance to see if anyone has been through this and can advise on areas that were out of the ordinary.  My basic areas that I am budgeting for are as follows:

1. Purchase of equipment - lease vs. buy, depreciation implications for tax (S-Corp), residual values at end of the contract.

2. Maintenance of equipment - do we outsource, buy a bumper-to-bumper insurance policy here?  Contingency plan if equipment breaks down.

3. Driver - Contracting a driver, employee vs. 1099, etc.

4. Insurance - Do we require driver to carry own - how much do we supplement a rider policy

5. Permitting - Working w/ DOT to ensure compliance - Not sure what to budget on this.

 

Anything glaring that I am missing here?  Appreciate the advice in advance.

 

Mark

Answers

Bryan Frey
Title: VP Finance/Corp Controller
Company:
(VP Finance/Corp Controller, ) |

That looks like a good list. I would just be absolutely certain you have the right insurance coverages for the truck, the driver, and for your company to be in business providing these kinds of services. Coverages are usually cheaper than you think and not having them will open you up to all sorts of ridiculousness if anything goes wrong.

As for the analysis, I would look at the broad range of outcomes, starting with, what if they use us for less time than we had hoped. You could end up holding a bunch of assets (equipment & trucks) that are worth nothing to you outside of this one customer.

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