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Can't afford contract

Discussion in 'Commercial Snow Removal' started by BRIMOW525, Jan 23, 2002.

  1. BRIMOW525

    BRIMOW525 Senior Member
    Messages: 259

    I have a condo complex that wanted a bid for snow services back in Nov. I gave them a bid, they signed and said to be sure that we keep on top of it because of the older people in the complex. Now in the last 3 weeks we have done 1 plowing, 1 parking lot salting, 2 sidewalk removal, 2 sidewalk saltings. The president of the condos who signed the contract called me and said they could not afford my services. The total for these services are around $775.00. They still want me to continue serviceing them. I told her I would knock $100.00 off of the bill and place her on a "will call" basis. My wife says that I am being a softy and should have stuck to my guns with the contract. They are very good customers and have never had a problem with our work. And we have never had a problem with getting paid on time. Am I being too soft. I also take care of the grounds during the summer. I stated in the contract that all work is seperate ie. one price for plowing , one price for salting lot, oneprice for sidewalks, one price for salting the walks. This way if I only salt the lot and walks they are not paying for snow removal. I also told her that if she is on a will call then there is no certain response time or time frame that I can get there. they will get done when I can get to them or send a truck there. Am I taking a chance with them "calling the shots"? In my contract I also state that no one can control mother nature and that we will do our best to keep the area as safe as possible but can not guarantee the conditions before during or after we do our thing. Just wondering if anyone has run into this before. My wife really thinks I am a push over and should not have given them a break as they signed the contract and we have to eat too. Just wondering.
     
  2. cat320

    cat320 2000 Club Member
    Messages: 2,223

    well if you sent them a contract and they signed it I would not go back on it as your wife says.Also don't think that if you don't get there when you stated in your contract that they would not sue you if anything happened.Let them sign another contract not holding you responsable for anything if you let them call the shots.
     
  3. Hmebuildr

    Hmebuildr Senior Member
    Messages: 115

    I tend to agree with your wife, the president of the condo assoc. signed a contract with you for a specifed amount. If they did not budget properly then that is their problem not yours.

    I see problems with the will call situation mostly from the other people in the condos complaining that the job is not being done when they expect it to be done. pardon the pun but this is going to have a snowball effect. I think it will get worse before it gets better. They will be calling you and expect that you will come right away when they call no matter what agreement you have with them.

    If they are going to change the contract that you have now then I would have them agree to and sign a new contract spelling out exactly what you will be doing and the conditions of will call.
     
  4. Jason Pallas

    Jason Pallas Senior Member
    Messages: 662

    That's a tough one - I sympathize with the decision you have to make. I'd continue to do them on a "call in" basis. You don't want to ruin the relationship you have with them for summer work. I assume that brings you good money. I would defintely have them sign a contract (new) that states that they are requesting "call in" services and realize the danger/responsibilities/liabilities for not having a seasonal contract that they assume all liability (as you can't guarantee when you'll be there). This might actually shake them loose and they might realize that not having you opens them up to a lot more liablility - they might decide to retain you. Good Luck.
     
  5. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    I would stick to you guns. I have heard of contractors that get the word of a softy, and once the word is out. Everyone is playing you.

    Geoff
     
  6. JD PLOWER

    JD PLOWER PlowSite.com Veteran
    Messages: 751

    I have to agree with the other members here, if it's a valid contract they owe you the money and they have to pay. I've been down this road before, customer wants to renegotiate in the middle of the winter, "don't come till we call", customer just flat out tells you they don't have the money.......on and on it goes. And as others have posted the will call thing NEVER WORKS OUT! IMO!

    I can't speak about your summer services for them but unless you change the contract price as far as snow removal goes, chances are you won't be servicing them next year. They will just keep looking for the cheapest price and if they get alot of snow they just won't pay that guy either.

    I guess this comes down to how much do you want the work?
     
  7. DaveK

    DaveK Senior Member
    Messages: 420

    That is a tough call.
    On one hand, if you didn't cut them a little slack, they may have found somebody else. And maybe that person would also under cut your summer maintenance. And they may be willing to give him a shot if he does well this winter. And losing that future money may hurt more than losing a little now.

    On the other hand, you don't want to become known as a softy as GeoffD said. But you didn't just cut them a break, you also altered their service. If that allows you to provide service for your other customers sooner, then it also helps in that regard. I agree with Hmebuildr that you should have them sign a new contract.

    That's the way business is, they held you over the fire to see if they could get something for nothing. Instead of just giving it to them, you made them give up something as well. It just comes down to who gave up the most value.

    Not everyone would have done the same thing. And no wife would ever give up money :) , but I think you did the right thing. Just remember to make them give something up if/when they ask for a break on summer services. The way I see it, you spent $100 to strenthen your relationship with all your clients.
     
  8. PINEISLAND1

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    Personally, I would just keep billing them for the agreed upon amount, as per contract, but let them know you will be lenient on the terms if they need extra time. Let them pay it off as they can, and maybe stretch the whole deal into a 12 month pay including the lawn work. Set it up on a monthly budget that they can afford, but stick to the agreed upon prices.
     
  9. Rob

    Rob PlowSite.com Veteran
    Messages: 306

    I am a little confused by your post. From a bit of a different perspective than those that have already responded, I see that they signed a contract with you that had a stated service level and a stated price. Then, mid-stream they want to alter that arrangement. Fine, I tend to agree with DaveK, if you do decent amount of summer work for them and want to keep the account, you can lower the price, but be clear that you did that because you have altered the service level and not because your a "nice guy". The only real danger is that the outside observer (resident) doesn't know about the change and it looks like you've dropped the ball on your services. Actually, I really think that they should pay you the full amount for what you've already done, and then let your new prices go in with your future service.
    What I am confused about is how the president of the association can come out and tell you that they can't afford your service, but want you to keep working. That doesn't make sense. Hey, I can't afford a Ferrari, but I'd like to have one. :D
    One other thought, perhaps you could offer a deferred / installment payment plan, then you can still keep your original contract and service level and make the money that you bid.
     
  10. Randy Scott

    Randy Scott Senior Member
    Messages: 142

    Yeah, and why don't you call the phone company, or electric company, or your equipment dealer, you know, all the people you owe money to, and ask if you can renegotiate their monthly costs. They'll tell you to pound sand you know where. It's your business, but a deal is a deal. We all, except maybe Buffalo, are having a tough winter on our end. My bills still keep coming every month. I can't change them because there is no snow. If they get you over the barrel now, you might as well plan on giving something up when spring gets here also. Times are tough for everyone, but they'll get tougher if businesses don't hold their ground. Do you own your business for yourself, or for them? Good luck with your decision and hope it works out for YOU!
     
  11. ADLAWNCUTTERS

    ADLAWNCUTTERS Senior Member
    Messages: 212

    i feel for you but BUSINESS IS BUSNESS! i would put them on a payment plan. they might drop you anyway for someone who is $10.00 cheaper. most important every time you go there you will think about this and it will piss you off as time goes by .go back and tell them you will do them a favor by giving them a payment plan for the same amount + summer work. that will also lock you in for the summer.if there a good account there go for it & think your a great guy.i have been doing 12 month plans for years and it's good for myself & the customer. good luck
     
  12. thelawnguy

    thelawnguy PlowSite.com Addict
    Messages: 1,011

    IMO they owe you the agreed upon price for work already performed. Since its not a whole lot of money in the contract, seems that if they decided to reneg on it and find a cheaper provider it would hardly be worth the battle.

    You must ask yourself, do I make good money on this account, or great money lol. Then really think about whether or not you would still be happy and profitable doing it for a little less, or even happier not doing it at all and filling the slot with another account?

    Though I dont initially like it, I have renegotiated accounts in the past, mid-season (both up and down) sometimes it works out for the best esp if there is year-round work available and you can get it.
     
  13. digger242j

    digger242j Senior Member
    Messages: 672

    I'm curious, if they can't afford your services during this minimally snowy winter, what kinda discount would they have asked for if you'd been there ten times this year already? It sounds like you're just letting them beat you down on your price.
     
  14. landman

    landman Senior Member
    from NJ
    Messages: 185

    I think you should stick to your pricing. Then tell them to pay the full amount due ( give them a payment schedule) tell them that you would extend terms for the rest of the contract. If you negotiate now they will always try to negotiate prices in the future. We had the same problem with a condo assn last year when our first snow was 19". Nobody expected this amount of snow and after us spending about 8 hrs there plowing and stacking snow they duidn't want to pay. We told them that sevice was provided no owners complained and the job was perfectly done, and they agreed to the prices ahead of time in the contract. I understand that condo and apt complexes only have limited funds availible immediately to pay bills, but condos epecially the owners pay the bills so the only diffrence is the association has to charge the owners at the next meeting for the additional funds. Good luck and stick to your guns!
     
  15. BRIMOW525

    BRIMOW525 Senior Member
    Messages: 259

    Thanks for the responses. I think everyone is right that i should have stuck to my guns and defered payments. I really didn't take into account of being known as a "softy" in the snow removal service community. I am going to draw up a new contract stateing that its on call, bla bla bla . But the prices aren't going to change. what I can 't understand is that I fiqure there are about 40 condos in this complex. I don't know what condo fees are but lets say they are $150.00 per month. Thats $8000 per month. How could they not afford me? The liability thing of having them call the shots also make me wary. They never once complanied about prices just the amount of times we came and took care of things.
     
  16. Snoworks

    Snoworks Senior Member
    Messages: 466

    I have experienced this type of client in the past, they tend to do this because they want to keep the costs down. Once you let them call the shots, you are dependant on their phone calls to go out and perform your work. This will impact the homeowners in the association, and they will think that slow performance of work is due in part to you. It is very hard to get your view to the homeowners when the contract is up for next year, and they are disscussing who to sign up with. It has happened to me!

    Good Luck. CGB
     
  17. rick barnes

    rick barnes Member
    Messages: 61

    Had an apt. complex that thought they couldn't afford to pay for a contract, of plowing as needed. They went to an "as needed ' and found that by the time they needed to be plowed everyone was busy and they were put on the list. By the time someone showed up to plow , the lots were packed in nasty shape, and needed to use loaders & the bigger equiptment to do the job. A couple of times paying for the bigger more $'s equiptment, they were really saving money haveing it plowed as it was needed , on a regular basis . I did offer them a deal that if they paid in 3 days I gave them a 10% discount, They now want me to pickup a check when I'm done, cash in hand. They even tried other contractor and found that I was treating them pretty good.

    Rick
     
  18. RCIPlow

    RCIPlow Member
    Messages: 86

    WOW!!!!Hold the phone...Let me get this straight, they have a signed contract that they now want to alter? You do summer work as well, and want to protect that? Here's my 2 cents....I would have to tell them that I can not alter a current contract with out altering liability. The first thing that comes to mind is that when any civic association/condo association sets contracts, they are or should be budgeted. If during the course of the contract you were to ask for an increase they would tell you to stick it. But they are now expecting you to help them out. Why dont they take the added expense and surcharge the residents a shared portion? That is how most around here do it anytime there is an increase or a special project, ie painting or reroof, each condo gets surcharged for the one time fee. I would not be concerned about the summer work if they can not pay the winter work. My dad always says 10% of something is better then nothing. He also says you have to know when your getting the shaft. Guess what? I think your getting the shaft.
     
  19. thelawnguy

    thelawnguy PlowSite.com Addict
    Messages: 1,011

    The industrial park condo I plow at did this during the banner 95-96 season. For April, due to the excessive seasonal snowfall, every owner ante'd up two extra months condo fees to pay me for services.
     
  20. John DiMartino

    John DiMartino PlowSite.com Veteran
    Messages: 2,154

    It sounds like they are messing with you,there's no way they cant afford to pay you,they can raise common charges if necessary,I wouldnt budge an inch on a signed contract,the only thing i would do is offer to upgrade it to seasonal now,that would allow them to know there budget in advance,and plan accordingly without sacraficing service.Next year,put them on seasonal,and have 1/2 of it by dec 15th,we never get any snow before that anyway,if they bail on you,you have 1/2 the money,and shouldnt have had to lay out much on your end.