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charge by the hour or by the inch?

Discussion in 'Bidding & Estimating' started by OneBadDodge06, Feb 21, 2005.

  1. OneBadDodge06

    OneBadDodge06 Senior Member
    from Iowa
    Messages: 731

    My dad usually sent out bids based on 1-3 etc but I've noticed alot of contractors charge so much an hour.......is this common now?
  2. gt_racer50

    gt_racer50 Senior Member
    from Ohio
    Messages: 484

    First of all the name of the game is how much money you can make in an hour. If you want $100 per hour and a place with 2" of snow will take an hour, charge $100, if the same place with 4" will take 1 1/2 hrs, charge $150. I can tell the customer anything that I want, however, I'm still trying to make x number of dollars per hour. So present it any way you want, it's how much do you want to make per hour. You have to figure out what your costs are per hour, how long it will take to do the task, and how much you need to make per hour to survive. Bid it that way, and if you can get it done quicker, more power to you and the more you make per hour. These customers crack me up, they say don't give me a per hour quote, tell me how much to do the job??????????????????? Ok, in my head, it's going to take 4 hours pushing it, so it's a 5 hour job.
  3. JMR

    JMR Senior Member
    Messages: 567

    I use 3 different bidding methods. I believe it depends on the type of account and the circumstances as to which method to use. Like everyone, I like to maximize my $$$ per labor hour, but there are certain lots that a per push price or inch bid increment pricing would not be effective.

    I have a number of lots that we usually only push once per storm, pricing is figured on a 24 hr storm total. Breakdowns are either in 3" or 5" increments depending on the lot size with 1" trigger.

    I have some other lots that are on a per push basis with 3" increments with 1" trigger, these may be pushed more than one time per storm.

    I have some lots that are pushed by the hour. This method works best when variables on the lot vary by time of day, day of the week or ??? etc. Example I plow a local downtown motel. Lot is approximately 1 acre, 3 island dividers. If snows on a Sunday nite, 4" snow - plowing @ 3:00am Monday morning, minimal cars in lot 1 1/2 hours. If after 6am Monday (lot rents parking space to downtown workers) 3 1/2 hours. Day of week and time of day can add 2 to 2 1/2 hours of extra plow time to the job. I originally got this job because the original contractor was billing them $300 to plow the lot. Management felt that a times they were being over billed. In my opinion the price probably balanced out to what I charge them now, but they seem more comfortable knowing that they are paying for my actual time. I bill them at $125 an hour and I round up at 1/4 hour increments.

    I should also mention that I plow a lot directly across the street from the motel on a per push basis with a 5" price increment. There are never any cars in the lot when I push it. When we did large apartment complexes I would never do them any other way than by the hour.

    Any method you use can work as long as you are making your desired $$$ per hour. Make sure that $$$ per hour is covering all your expenses and making you your desired profit. payup payup
  4. Mark F

    Mark F Senior Member
    Messages: 101

    I charge by the hour with A 3/4 of A hour minimum charge. Its simple and simple works best for me.
  5. gt_racer50

    gt_racer50 Senior Member
    from Ohio
    Messages: 484

    So JMR your saying that you don't figure how much you want to make per hour in these pricings?
    we can present it any way we want, probably 3 dozen different ways, to the customerm but don't you consider an hourly rate in your presentation? as hidden as it may be.
  6. Mower For Less

    Mower For Less Senior Member
    Messages: 108

    I am working on a per snowflake charge. That way I can bill more for these dense snows, even though the inch total is not that great. :) Just Kidding, but it would be a good thing!

  7. JMR

    JMR Senior Member
    Messages: 567

    As hidden as it may be, I still basically price per hour. It boils down to what your comfortable with and your customer is comfortable with. Some just like it presented differently but the end result is still the same. Under some circumstances straight hourly will work the best, as stated in my example.
  8. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,923

    I charge by the push, this way the costumer knows how much it is going to cost them. on lean years with only small snow falls I will come out way ahead on years with heavy snow falls I'm still O.K. but it takes more of my time.
    using the inch method 1to3 4to6 and so on just leads to arguments about how much snow fell on what day.
    so, for me I like the flat-rate, it not really a hidden by the hr. rate because if it takes me 1hr to plow the lot with an average snow fall and I make x,and if it takes me 2hr I still only get payed x not x2 . There is a few things to look at when bidding a lot or drive, is it going to be easy to plow, obstacles, where can I stack the snow, is the lot in good shape,( smooth or allot of potholes) up hill or down hill or flat. It is some thing you get a feel for after a while.
    Last edited: Feb 22, 2005
  9. glenspot

    glenspot Senior Member
    Messages: 255

    I won a bid on price because I quoted per "job" rather than per "hour".

    In the particular situation the competition quoted them a $45 minimum for the first half hour then $45 for each 15-minute increment after that.

    I shook my head, and said, "So, if they work slow, a 4" snowstorm could cost you $90? I'd be happy to do the job for $45 per occurrence."

    So, I plow their lot, takes me less than 15 minutes to do, and I get the $45. The same amount it would have taken the other company, but I presented it differently, and got the job.

    If I told residentials that I would charge them $135 an hour to do their driveway, they would FREAK OUT. But, I can quote $15 per occurrence, and they think THATS fair. Then it turns out to be a 5-minute job, and I make over $135 an hour.
  10. IndySnowPlow

    IndySnowPlow Senior Member
    from Indiana
    Messages: 214

    Commercial lots = Hourly rate
    Roads = Hourly Rate

    De-icing = Fixed rate
  11. OneBadDodge06

    OneBadDodge06 Senior Member
    from Iowa
    Messages: 731

    I've tried bidding places at an inch increments but they all look at me like I've been sniffin paint. I just wasn't exactly sure what the common method was in larger metro cities. I in turn gave the guy the same look after he questioned my bidding. I figure it would give the customer piece of mind to know how much they're paying per inch instead of per hour, cuz who knows, their contractor could be drinking coffee and pettin the dog all night.
  12. CMerLand

    CMerLand Senior Member
    Messages: 173

    What you charge is going to by the types of accounts you are servicing be they residential or commercial. Way back when I started plowing I use to charge by the hour, for fear of not earning enough money for the time I was on the job. This reduced risks but also reduced rewards.

    Now we plow all of our commercial properties using inch brackets of 2 - 4, 4 -6 etc and do residentials on a per push basis. Once caveat is that we do very few residentials, and only because in most cases they are the owners of the commercial properties we do, and these are not done until the snowfall is over unless its a major storm where we will visit them twice during the storm.

    I strongly recommend you avoid per hour pricing as you will be very limited in the amount of money you can make and will face question over whether you took too long, were to slow, or that they arent paying for drive time and whatever. In addition, there are many hours per vehicle that need to be spent pre and post storm, cleaning, loading, unloading, repairing or maintaining them for the next event. If you are charging per hour, then you are paying these costs and not recovering them from the client.

    Since changing and getting per hour prices of $100 per hour back in 96 and making the switch to per inch prices, we consistently realize earnings of $ 250 to $ 350 per hour, because of highly trained personal, and long term experience on the properties we service. On an hourly basis, we would be cutting our own salaries as we became more effecient in plowing the properties. Does that sound like a good thought to any businessman?

    The bottom line is they want their parking lot clear, and probably really dont care how or what you use to clear the lot or how long it takes. Your bottom line is that you recoup enough money in the few (at least for us in NJ) times that you get to run your plow route to recover all the direct and indirect costs for that particular storm, as well as enough profits to cover all current and future repairs and ultimately replacement of your plow vehicle, so you can service these clients year in and year out.
  13. wstwind

    wstwind Senior Member
    Messages: 103

    I charge based on snowfall totals:
    1.5-4.9= $
    5-7.9= $$
    8-11.9= $$$
    12+ = $$$$
    payup payup payup
  14. gt_racer50

    gt_racer50 Senior Member
    from Ohio
    Messages: 484

    I present a set price for a 2" snow, then it increases every 2" from there. I'm not going to take a beating on a freak 10" snow. The 2" price is competitive and after that, my time is worth something. Salt is at my descretion and is priced per bag put down. On a normal snow I try to tell them it would be x amount of bags, if we have super freezing temps, ice or whatever, it will require more salt to make the property safe and a different kind of salt for super cold conditions, and they know the price of all the different kinds of deicers. It's written on their contract. On the bills I include the time that we were there, temp, depth, conditions and the forcast for that time frame.
  15. lawnandplow42

    lawnandplow42 Senior Member
    Messages: 110

    i do only driveways, and charge per push
  16. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 27,868

    I charge a flat fee / month, for 6 months.

    If a lot is going to take an hour, for a 2-4" snowfall, and I want to make $100 / hour, then I charge $100 for 18 snow events for the season.

    You can find information for your area on how many snow events and how much snow falls in your area for a given year.

    I then take that total, $1800 and divide it in 6 equal payments, for November, December, January, February, March and April.

    This means that the property's set rate is $300 / month for 6 months.

    Some years, sure, I might have 22 snow events, but since I plow myself, I'm just out the extra diesel fuel.

    I've got 15 accounts set up this way, some a little more than an hour, some a little less, but all with an hour minimum / snow event.

    The customer doesn't know how much I am trying to charge / hour, since they're usually not at the lot while I'm plowing at 2 am to see just how long it takes.

    I realize this won't work well with companies with employees, since the longer / more often you have people in a vehicle for you, the less you're going to make.

    However, for me it works well, bringing in over $5,000 / month, even in November, December and January of this year when we didn't have any snow until February.

    Since February, I've plowed 7 times, for an average of 15 hours / time, or roughly 135 hours.

    Now it's mid 60's here in MN, and I'm sending out snowplowing invoices for April.

    My receivables for the 2004-2005 season will be $30,600, for 135 hours worked, or $226 / hour, versus the average of 18 snow events like "average" I'd bring in just over $113 / hour.

    I realize I'm waiting to get paid to a point, but at the same time, all my bills (house, trucks, living expenses) are paid all winter, so I'm not stressed out like buddies of mine when it doesn't snow for 3 months.
  17. cet

    cet PlowSite Fanatic
    Messages: 7,196


    That is the way we bill also. It is great if you can get it. Everything here is contract, flat fee. Some years you plow a little more some a little less but over time it all equals out.

    7 events at 15 hours each is only 105 hours so I am going to give you a raise to $291/hour. It will help with the extra fuel costs.
  18. OneBadDodge06

    OneBadDodge06 Senior Member
    from Iowa
    Messages: 731

    so let me get this straight, I understand where you get your flat fee at but is that per hour or per push? I do like this idea, especially if it is per hour/flat fee. You can get an idea of what you will make for the season with the jobs you do have.
  19. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 27,868

    Mine, I personally figure it based on how much it would take for a 2-4" snowfall / lot.

    The lots I do, are 20 minutes - an hour, and I have a one hour minimum.

    So, lets say I charge $100 / hour, with an hour minimum. I charge by the push, so that's every 2-4" it's $100, whether it's one storm that I go back 3 times ($300), or each 2" snowfall.

    Around here, we average 50-60" of snow / year, with about 15 snow events.

    This year we received just under 30" of which I plowed 7 times.

    Granted I'm not going to get rich this way, but it's much better than going bankrupt when there's no snow.

    Everyone loves it, because they know flat out at the beginning of the season what their snow budget is going to be. I love it because I can go to bed at night knowing my truck isn't going to be repoed when I get up in the morning.

    Even if I had to plow 30 times a season, or 450 hours, that'd still be $68 / hour, which I could live with, since my bills are still paid. I'm just going to be out an extra 100 gallons of diesel, or $250.
  20. cet

    cet PlowSite Fanatic
    Messages: 7,196

    blade masters

    The flat fee is for the entire year. Even if there is no snow you get paid. But if there is 40 snowfalls there is no extra billing. Around here an average size driveway goes for $300/season. We average 14-18 snowfalls. If you plow more you loose your time and fuel but if you plow less you only save your time and fuel. At least this way we know how much we a getting at the beginning of the year. There are very few(this year 1)snowfalls over 6" and most are around 3" or less.