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Actually turned down an existing cliet!

Discussion in 'Commercial Snow Removal' started by MLI, Oct 28, 2002.

  1. MLI

    MLI Member
    from Boston
    Messages: 53

    We had an existing acount(bank) that we serviced for 17 yrs.. It was a small parking lot(60 cars) and easy to maintain. Well ,the bank expanded into a 4 acre lot,(different sight) with islands misplaced all over the place( a plowers nightmare). We just got the bid sheet on this place, I looked at it one more time, and think its just not worth the aggrevation, and excessive liability(also has a health club on property now). The way I look at it, people will be compacting the snow all day long, theres to much foot traffic, its gonna go to the lowest bidder, they set the standards on how it was to be plowed, and bottom line, it does'nt fit into the already profitable accounts we have, with less the hassle. Any of you guys ever walk away from these type of sights?
     
  2. Dan Schulte

    Dan Schulte Junior Member
    Messages: 26

    MLI - new to snow this year but was a sales manager for an alarm and guard company for 13 years. Did about 75million per year for the owners. We turned down business constantly. There are times to break even on a job if theres room in the future for referrals, profit, etc.. There is never room for lawsuits or lost money. Low dollar bids are for companies that will either go under or that you will buy 2-3 years from now. Stick to your guns, stay in contact with them and eventually you may get the job back at reasonable rates and conditions. Just my 2 cents.
     
  3. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    MLI, it was kind of ironic you posting about losing (or giving up) an existing account. Just an hour ago I talked to my last two accounts from last year. I'd sent out letters with rates over a month ago. The first one said sure she wanted me back and nobody else could do as well:cool: . The last one was upset that I raised the rate from last year (by $5). Then he wanted the same rate no matter how deep the snow was or whether I had to come back.

    I told him "no problem" and wished him well. He said he'd call if he couldn't find someone else. :rolleyes: Not going to happen at any price.

    Sometimes you just have to walk away.
     
  4. SnoJob67

    SnoJob67 Senior Member
    Messages: 384

    I have two lots that combined are a total of 12 acres. I was told today that they want me to sign their contract from corporate. We already have a contract in existence with a 30 day written cancellation clause.

    Bottom line, I will most likely NOT sign their contract. If they want to do business with me, it will be on my terms. I didn't write my contract so that some Bozo in a suit could tell me how I should approach the snow removal of a lot that is located several hundred miles away from his corporate headquarter office. If my contract was good enough to operate under last year, it is good enough for this year too.

    I hope to be able to salvage the account, but at no point will I be afraid to walk! If their terms are not what I want, I will stick to my guns.

    I have enough experience (reading more than one spec sheet is enough experience) to figure out that 99.9% of specs written by anyone but a snow contractor are a joke that I want no part of.
     
  5. Ohiosnow

    Ohiosnow Senior Member
    from Ohio
    Messages: 415

    MLI

    Turn down accounts ?? Yes, I've been plowing for 27 yrs. & you have to get rid of the PITA ones ;) when you get better ones. If you don't look @ & every year for better ones how will you ever make more $$$$$ with less work & time.

    I now plow 1/2 as much & make 5 times more than I did 8 yrs. ago. :nod: Never take a account the second yr. if you didn't make money the yr. before unless you charge more & can't find a better replacement account. Some jobs are better not had then having them & bitchin, oh why did I take this account.:waving:
     
  6. SnoJob67

    SnoJob67 Senior Member
    Messages: 384

    The problem is neither of the two lots qualify as PITAs. They were profitable and we can service them just as easily as not this season.

    I am going to let the Manager(s) know that I am unwilling to sign their contract from corporate. If I "needed" to sign their contract, I would have needed to do so last season, presumably. Although I realize that sometimes service isn't given to the letter of those contracts, I don't want to take a chance that they do try to hold me to their contract. Maybe if I explain that they are part of a route and that I cannot service them differently than the rest of my accounts they will drop the idea of me signing their contract.

    Bottom line, I know without looking at their contract that it is set up to protect the corporation (and they don't care what liability the contractor is left with), just as my contract is set up to protect my butt.

    Should I just say, "I'll have my lawyer look at the contract and let him make the decision" and tell them I was told not to sign for liability reasons, or just tell them "no, I won't sign" and then tell them why? I would not waste the time or money on the lawyer (even if I told them that) because common sense tells me that their contract is drafted with their best interest in mind first and foremost.

    My exposure to liability and my profitability are likely the least of THEIR worries. Any advice regarding the previous paragraph would be helpful.
     
  7. Ohiosnow

    Ohiosnow Senior Member
    from Ohio
    Messages: 415

    SnoJob67

    My above post was in general to MLI but as to what you just posted I would have it looked at if it's a good $$$$$ acct. & easy.


    And yes, most large Corp. are trying to shed most of the liabilty on to the plower. Most of the time the Corp. contracts I've signed was concerning times & amounts of snow as to make sure it wasn't being over plowed or under plowed.



    Don't always be afraid of Corp. contracts as I've made BIG $$$$$$ with them over the yrs. 2 yrs. ago I sign 1 that they made a mistake in the contract :eek: as my lawyer pointed out, I signed it as they did too. I then made them abide by the signed contract & they paid BIG $$$$ ( not like it killed them but I did make extra $$). I still have the account but not the way it was the first yr. :(


    I make ALL my accounts sign my contract also, as I'm trying to cover my a$$ just like them :waving: . That's why it's not all bad to have a GOOD Lawyer check it out if it's a good $$$$$ accounts.
     
  8. SnoJob67

    SnoJob67 Senior Member
    Messages: 384

    Maybe I am getting a bit spoiled. However, I don't think that a $500-$700 per push account is worth all the hassle of involving lawyers. I bet if I offered to sign their contract after THEY paid my lawyer to review it, I would hear a completely different tune.

    You are right. Most of the time corporate is trying to save every penny they can by giving specs that just don't work for me, the contractor. This corporation has had some money woes and they are not going to solve their problems by cutting my throat, thank you very much. I salt and plow at my discretion according to my contract. I won't let them make ANY decisions regarding service.

    Generally, these corporate contracts won't let the contractor have the final say regarding salting and/or plowing. Sorry, but if I cannot salt at my discretion, I'll let another (not so savvy) contractor take the job and push 3 or 4 events per season and see how they fare!

    Letting them have the final say is like letting a victim of a house fire decide how a city should approach firefighting. The fact that your house has been on fire does not make you an expert firefighter. Similarly, hiring out snowplowing does not make you an expert on snow and ice removal. I won't tell the customer this, but it is true, nonetheless. I may not be an "expert" but I will guarantee that I have much more skill and expertise in my field than the average retail store manager!

    Maybe a tongue in cheek, "I'll decide how to run your store and you decide how to run my plowing business" comment would better help them hear what they are saying to me. I am somewhat offended and I do have the right to be.
     
  9. site

    site Member
    Messages: 61

    This part of the business is where certain folks make big things happen. NEGOTIATE- its what business is all about. If you see some stipulations you dislike, but the job on the whole is a money maker- ask to get the stipulations changed. If you approach this problem armed with knowledge and a willingness to negotiate you may be able to strike a good deal. Sure, they may tell you to get lost, but you need to at least try.
     
  10. Ohiosnow

    Ohiosnow Senior Member
    from Ohio
    Messages: 415

    SnoJob67

    Again not to tell you what to do but over here my $500.00 per push lots makes me about $15,000.00 a yr. or so. So I don't mind spending a couple hundred $'s to make 15-G's.

    Nobody said you have to agree with all of the contract. When I have a contract I don't like I have a few extra clauses put in my contract & then give it to them. I know they will not agree to them but now we both have some give & take room.;)

    Just like "site" stated in the above post you have to be willing to negotiate. Yes it's BULL$HIT but it's all part of the game. :waving:
     
  11. Got Grass?

    Got Grass? Senior Member
    Messages: 641

    You dont call an eletriction & tell him how to run the wire & where to staple it. You tell him where you want the new outlet. He knows the "proper" way to do it.

    If only plowing was the same.
    They tell you what needs to be done & leave the rest up to the plower to figure out.
    I bet the reason corprate took over the contracts is becasue one of the locations hired a non-profestional & got burned. Unfortunatly large corperations (usually based in the south) dont realize all plowing is not the same. Diffrent areas require diffrent tatics.
     
  12. SnoJob67

    SnoJob67 Senior Member
    Messages: 384

    Last season we plowed 4x and salted 5x. We grossed about $5K off one and about $7K off the other for plowing and salting their lots. If I could have grossed $30K between the two, my feelings might be different.

    Obviously, if we have a better winter this season, those numbers would increase dramatically. However, that is not guaranteed. If I would not have had the discretion to service last season, I might as well have worked at a convenience store for $5.35 an hour.

    During an "average" season for my market, I would do just fine, but we have not had an average winter here in quite a long time. In the mean time, I need to turn a profit.

    If they are going to give me a 2" trigger (guaranteed they don't list a 1" trigger on THEIR contract) and tell me when I can and cannot salt, they can figure out how to keep their contractors from going bankrupt and changing constantly. I'm not real open to negotiation when I already have a legally binding agreement in place.

    I'm not being contrary intentionally, but what is to negotiate? If they cancel or decide not to honor my agreement, I can and will tell them to find someone else for the job. Maybe I will see their contract and love it, but it would be a first!

    If nobody ever has the intestinal fortitude (read balls) to tell them "no" every contractor down the line they hire will be subject to their wants and needs rather than realistic specifications.
     
    Last edited: Oct 29, 2002
  13. Ohiosnow

    Ohiosnow Senior Member
    from Ohio
    Messages: 415

    SnoJob67

    What's to negotiate, every thing you said: trigger,saltings.

    If you already have legally binding agreement in place then I would tell them when it expires will talk but that's it for now. They may tell you to hit the bricks but that's up to you.:waving:

    Yes we all like having our cake & eating it too but it doesn't always happen anymore. So only you can make that choice if it's worth it or not to stick to your :gunsfiring: guns.

    I have the Balls & then some to tell them no way & I have on 3 different contracts but don't spite your self when you can negotiate with most. I have walked away from many jobs because it wasn't in my best interest.
     
    Last edited: Oct 29, 2002
  14. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    That's what I liked about the last estimate I gave (and got the job). I was telling him how I'd approach the job, when I'd plow etc. I've found most people like to talk about it. He cut me off I(politely) and just said "you're the expert, I'm leaving all that up to you" (when and how much to sand, depth for plowing etc). All he wants to know is that he can get out of his half-mile private road and his wife can get out with her two wheel drive.
     
  15. SnoJob67

    SnoJob67 Senior Member
    Messages: 384

    Ohiosnow- Thanks for the input. I like you usage of smilies. :D My agreements expire only after 30 day written notice given by either party.

    Otherwise, they can go on indefinitely. If they are going to cancel, I would likely make them adhere to the very letter of the agreement because those were the ground rules for doing business.

    I sent out a letter in July that explained to existing accounts with new decision makers how our agreement works.

    Technically, I would be in breach of my service agreement by signing their agreement before one of us gives the other 30 days written notice and allows the 30 days to expire BEFORE signing a new agreement.

    I think they are flexing their muscles and expect me to back down. If they were a new customer, I'd be more flexible, but I just feel that you don't tell someone that you are going to change the way you are doing business less than a month before the snow will surely fly, especially when you were put on notice four months prior as to what the specific terms are of your existing agreement.

    I'll also add that fellow contractors in my local market are not in too big a hurry to service them because (despite the fact they have a good payment history with me) there is a perception that they may not be able to pay their bills. The managers are well aware of this fact, too. Therefore, I am negotiating from what I consider to be a position of strength. If I had not grown by 50% plus this season, I might have a different view of it all.

    Thanks for all of the input, so far.
     
  16. site

    site Member
    Messages: 61

    Lawyers write contracts to protect the folks who pay lawyers. Human beings walk on 2 legs and are unsteady on slippery surfaces. People who fall down or crash their cars associate with lawyers (who pay secretaries to wait by the phone in case someone calls with a slip and fall case). Store owners want customers and try to attract customers with pleasant shopping experiences and safe properties. The weather answers to noone. Our job is to make store owners happy so they'll pay us. We are supposed to promise to keep the properties we maintian safe. This is an ambiguous requirement. Everyone listed above acts in his or her self interest. Our service does not make paved areas safe- it makes them safer and less slippery than ignoring them would.
    None of us know the details of your contracts, or the specifics of the lot so we can't tell over the net whether you are making a smart move or a dumb move. It SOUNDS like you have a heap of pride and you're gonna try to make the customer see it your way. I would look for a middle ground without leaving myself uncomfortably exposed and try to strike a deal.
     
  17. SnoJob67

    SnoJob67 Senior Member
    Messages: 384

    Maybe I should clarify: I am looking for ways to convince the customer to abide by our current agreement rather than finding less profitable "middle ground."

    I am in no way looking to negotiate. The terms of our agreement have already been negotiated. I have nothing to gain by further negotiation, with the possible exception of liability. Also, I stand to lose profit by negotiation, unless I raise my pricing to reflect a reduction in service frequency.

    Only one of the managers mentioned the corporate contract earlier this week. The one who mentioned the corporate contract has tried to buffalo me more than once.

    Even I don't know the whole situation, but it will likely unfold for me later this week. Maybe both managers will tell me the same thing regarding the contract. I may have to walk in a way that leaves the door open in the future. I won't burn any bridges, but I won't give up any money, either. If they change the specs, that is giving up money. My money is NOT negotiable. I'm sure you understand a little better where I am coming from now, site. :D
     
  18. Ohiosnow

    Ohiosnow Senior Member
    from Ohio
    Messages: 415

    SnoJob67

    I think I get what you mean :eek: sorry it took so long.

    I wish you the BEST but you have 1 BIG problem as you stated you both have a 30 day exit claus. If you can wait & not sign & snow or ice comes you will be entitled to do as your contract states for 30 days or till they send you their notice ;) .

    I don't see anyway you can enforce it longer then the 30 days :( .

    To convince someone to abide by a contract that they want to change is almost impossible, they have the easy out (30-days).

    That's the reason why we said try to negotiate. ;) I've done it both ways, sometimes you win & sometimes you lose. If you think your in the drivers seat then go for the ride they might blink first.