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Calculation Of Prices/work

Discussion in 'Commercial Snow Removal' started by DAZ982500, Apr 12, 2005.

  1. DAZ982500

    DAZ982500 Senior Member
    Messages: 142

    I Have Figured My Overhead For The Year.my Question Is When I Am Cutting Lawns I Can Figure Out Based On Length Of Season And The Number Of Times I Will Be Cutting A Lawn In This Season As To How Much I Need To Take In To Cover My Overhead. With Snowplowing Its A Little More Tricky. I Have Know Idea How Much Snow We Will Get Despite The Overhead Being A Constant Insurance $1800 A Year Plus Gas Equipment Truck Payment. How Do I Figure What I Should Becharging Using This System Vs Small/medium/large Driveway.i Know I Need Volume Number Of Jobs And Of Course Snow. I Want To Make This As Profitable And As Competitive As I Can.live In N.y.upstate.
     
  2. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 27,961

    What I do, is figure out what I need to charge / hour to cover my bills in the winter.

    I want flat contracts so I'm paid regardless of whether it snows or not.

    My family needs a house, cars, gas, etc., and doesn't need to be sitting around if there's no snow for 2 months or more.

    Anyways, once I take that cost / hour, I figure out how long it's going to take me to do a commercial lot, then multiply by 1.5. I've learned over the years that I can consistantly bid low, so I've learned to bid like I normally would, then just add another 50% to the hours.

    Anyways, then I multiply by 18, since that's on average how many snow events we have / year.

    Then I divide by 6, since my snow contracts run for 6 months.

    Say I want to make $75 / hour.

    So, the parking lot takes me 1.5 hours to plow. I figure it to be $125 / event + 50% or another $60 for a total of $185 / snow event.

    $185 x's 18 = $3,330 for the year, or a monthly fee of $555.
     
  3. DAZ982500

    DAZ982500 Senior Member
    Messages: 142

    I Appreciate Your Feedback I Calculate My Spring/summer Work Somewhat The Same Way.the Problem I Have With My Situation Is All Of My Work Except One Business Is Residential Driveways. So Its More Difficult To Apply Your Method Lawnmowerman22 In My Situation. I Would Like To Get Commercial Accounts However This Has Not Happened Yet, Mainly Due To Just Beginning. I Like Your Plan So Question Two Is This If , In My Case You Only Had Residential Accounts How Do You Apply This Calculation. Alot Of People Will Not Pay Ahead Of Time For Work When They Do Not Know How Much Snow We Will Get.dave
     
  4. Mick

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

    My advice is to, essentially, figure how many "average" driveways you'll need to make the money you want. The kicker is, as you point out, that there is no way to know how many times you'll be plowing in any given season. For this, you'll have to work with averages - as in average number of pushes per season and average snowfall for your area. Obviously, in a year with below average snowfall, you're going to be a little hungry.

    Since you've got your fixed and variable costs figured, I'll skip that part. So say you need to generate $10,000 per season, the "average" driveway is 40 and you get an average of 80" of snow per year. These figures closely match my situation, so I continue to use my calcualtion. I figure an "average" of 12 pushes per year. I may not actually go out 12 times per year, but the income generated is approximately that as if I did. For instance, I charge based on amount of snow in a given snowfall. So, if it snows 12", I charge twice as much as I would for pushing 5". The 12" snowfall would count for two "pushes" of income.

    So I want to make $10,000 in 12 pushes at an average of $40 per push. I'd need 21 driveways. ($10,000/12/$40 = 20.8)

    Also, a bigger driveway or private road would yield more money per push and fewer total number of driveway needed to reach the income goal. Also, a lower trigger would result in more pushes per season, but other costs would increase.

    Does this help or simply confuse the issue?
     
  5. Mick

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

  6. PSDF350

    PSDF350 Senior Member
    Messages: 577

    Thanks for that link Mick. much appreciated :nod:
     
  7. DAZ982500

    DAZ982500 Senior Member
    Messages: 142

    Thanks for the come back Mick this does help with calculation.The only difficulty in southern ny I have not been so lucky with landing residential accounts that will pay 40.00 per push.The numbers for me were between 25-40 which was a decent size driveway.Two thoughts that I have at this time and maybe you can help me here.First the truck I have is 3/4 TON Dodge Ram ext cab 7.5 Myers 5.9L.This year was a bad year I purchased it 9-04 and have put 2000.00 dollars already into and yes I am paying 297.00 a month for 4 years.Has 8' box.This is a big truck to do driveways with when I think about at this time I would like to maximize my profit with gas prices conyinuing to ascend and the size of the truck it crossed my mind that maybe I should have purchased either a Blazer with 6' blade or a smaller truck to perform driveway work.Or try to jack up prices/keep attempting to find commercial jobs.dave
     
  8. Mick

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

    It's been my experience that trading in a truck (or car) is a losing proposition. At least with the Dodge, you know what you have. If you trade, you'll basically be starting all over. Also, it's better to have too much (truck/plow, etc) than not enough. I'd rather plow a 3" snowfall on a 50' driveway with a 5500 than a 16" snowfall on a one mile road with an s10.

    I had the same problem with charges for driveways. I really just stuck with my guns and passed up any that didn't want to pay what I thought it was worth. It's paid off for me and I have a reputation of not being cheap, but for good service. The flip side of that is that you'll lose out on some revenue. It helped that I didn't depend on snow for a living and I had other income to fund my equipment. The first year I plowed, I didn't even make enough to pay my liability insurance. But I look at it like this - Any given amount of work will cost the same, so I'd rather make $40 for it than $20. I'd rather just pass up the $20 job and save the gas and wear and tear for that $40 one.

    Hang in there and avoid being known as "the cheap guy".
     
  9. DAZ982500

    DAZ982500 Senior Member
    Messages: 142

    I an all for this philosophy and I will carry this philosophy with me when the next season arrives.Thanks dave.
     
  10. T-MAN

    T-MAN PlowSite.com Addict
    Messages: 1,363

    Micks right Daz, hang in there. It takes time to get the good ones. maybe sub out for some commercial stuff to help offset your expenses/overhead. Usually you will have lower triggers then residential so you get out alot more.

    Todd
     
  11. DAZ982500

    DAZ982500 Senior Member
    Messages: 142

    I did get an offer way to late in the season from a guy to think about sub-contracting which I told him that I would consider this I don"t have any details on this end of it except this. The head guy calls you the night before the storm and tells you the locations and times to plow.H e told me they pay about 40.00 per hour that seems low to me but I do"t know. Can anyone shed some for light on this to help me decide it this is something I should think about.A second point to consider is the location I have to drive to is about 10 miles from home base.DAZ.
     
  12. DAZ982500

    DAZ982500 Senior Member
    Messages: 142

    One More Thought I Had Here.i Have Rental Properties That I Took On For A Guy I Worked For In The Summer These Were Terriable Driveways Students Who Sleep In Until 11am In The Morning Would Nt Move Car Or Cars. Driveways Were The Blade Would Not Go In Even When Angled.driveways That Even With Shoes On Blade Clear Surface By And Inch The Plow Would Trip The Surface Was Uneven.other Driveways Without Any Great Places To Push And Stack Snow.i Took Them To Generate Income And Cover Expenses Some I Neededto Use Snowblower.anyway I Agree It Does Take Time And Yes I Will Hang In There.by The Way Some Of These People Were Only Willing To Pay 20.00 Bucks For These Jobs.that Was Not Encouraging By Any Means. Thanks For Ideas Thoughts.daz