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Commercial Custom Complaining About Invoice

Discussion in 'Commercial Snow Removal' started by cclc1021, Feb 27, 2006.

  1. cclc1021

    cclc1021 Junior Member
    Messages: 26

    Good afternoon. My name is Harold. I have 3 contracts with commercial customer. We recently got a Noreaster here in MD. The snow was from 10" and above. They were billed 7300 dollars for each of there locations. My team and I have to make multiple visits to each location to ensure that we stayed on top of the snow.

    They want to meet with me on Friday to renegotiate the contract. I told her that I thought our pricing was far based on the size of the properties, cost of gas, labor, insurance etc.

    Here are the fees that we charged. I'd appreciate any input as to whether or not this pricing was fair?

    Location #1

    Remove snow from sidewalk, walkways for less than 1” of snow, ice, sleet and or freezing rain _$300.00 per snow removal operation. Plow parking lot _$250.00 per hour per snow removal operation.
    Remove snow from sidewalk, walkways for 2-5" snow, ice, sleet and or freezing rain $400.00 per snow removal operation. Plow parking lot _$350.00 per hour per snow removal operation.
    Remove snow from sidewalk, walkways for 6-9" snow, ice, sleet and or freezing rain $800.00 per snow removal operation. Plow parking lot _$550.00 per snow removal operation.
    Remove snow from sidewalk, walkways for 10” and above snow, ice, sleet and or freezing rain $2000.00 per snow removal operation. Plow parking lot _$1100.00 per snow removal operation.

    Location #2

    Remove snow from sidewalk, walkways for less than 1” of snow, ice, sleet and or freezing rain _$150.00 per snow removal operation. Plow parking lot _$125.00 per snow removal operation.
    Remove snow from sidewalk, walkways for 2-5" snow, ice, sleet and or freezing rain $200.00 per snow removal operation. Plow parking lot _$175.00 per snow removal operation.
    Remove snow from sidewalk, walkways for 6-9" snow, ice, sleet and or freezing rain $400.00 per snow removal operation. Plow parking lot _$275.00 per snow removal operation.
    Remove snow from sidewalk, walkways for 10” and above snow, ice, sleet and or freezing rain $1000.00 per hour per snow removal operation. Plow parking lot _$550.00 per snow removal operation.

    Location #3
    Remove snow from sidewalk, walkways for less than 1” of snow, ice, sleet and or freezing rain _$150.00 per snow removal operation. Plow parking lot _$125.00 per hour per snow removal operation.
    Remove snow from sidewalk, walkways for 2-5" snow, ice, sleet and or freezing rain $200.00 per snow removal operation. Plow parking lot _$175.00 per hour per snow removal operation.
    Remove snow from sidewalk, walkways for 6-9" snow, ice, sleet and or freezing rain $400.00 per snow removal operation. Plow parking lot _$275.00 per hour snow removal operation.
    Remove snow from sidewalk, walkways for 10” and above snow, ice, sleet and or freezing rain $1000.00 per hour per snow removal operation. Plow parking lot _$550.00 per hour per snow removal operation.



    How can I renegotiate to ensure that we do not lose the business? They also want us to bid on a 18 locations for lawn care maintance and landscape.

    Thanks for any feedback.

    Harold
     
  2. dumper

    dumper Junior Member
    Messages: 28

    Confused............

    Is plowing the lot per hour in all cases??

    If yes, why does the price per hour change? We only plow by the hour, but the per hour price is per piece, per hour, regardless of the amount of snow.

    Easier to comment if the above questions are clarified.
     
  3. cclc1021

    cclc1021 Junior Member
    Messages: 26

    It is suppose to be per snow removal operation, not per hour. Execue my typo. So based on that what is your opinion?

    Thanks,
    Harold
     
  4. grassmanvt

    grassmanvt Senior Member
    from Vermont
    Messages: 153

    The way this is written up is confusing at best. Also, if I follow the pricing anywhere near correctly I don't see how you come up with $7300 per location for a 10" storm at the prices given unless I don't follw your pricing scematic.
     
  5. Plowfast9957

    Plowfast9957 Senior Member
    Messages: 280

    I dont really understand what you are asking. If that is the price in the contract they agreed on why would they be complaining about it as long as you provided the proper services. And yes it is extremely hard to follow that pricing structure.
     
    Last edited: Feb 27, 2006
  6. Rappa

    Rappa Member
    Messages: 84

    How many vehicles/peices of equipment? How long do these lots take to plow? Is there equipment there during the entire storm?
     
  7. cclc1021

    cclc1021 Junior Member
    Messages: 26

    Thanks for all the comments. Yes, they agrreed to this pricing structure and did not complain about the invoices where the accumulation was 2 - 5 inches. We have 1 truck with a plow and 3 snow blowers as well as hand shovels. To apply the calcium chloride, we use 2 manual spreaders.

    Since this was a large storm we had to visit the locations multiple times at least two. Which in the agreement is defined as a snow removal operation. So we billed each site for multiple snow removal operations.

    Is that clear? I am meeting with them on Friday to renegotiate the contract.

    Thanks,
    Harold
     
  8. bgingras

    bgingras Senior Member
    Messages: 282

    why woudl the cost of a "snow removal operation" go up as the amount of snow goes up? why would you plow 10" at once...wouldn't you be charging the same per operation or per push regardless of the snow amount, and per push every 2" or something like that...I'm guessing that they thought that the first location would be $3100...you deifinetly need to seriusly clean up your pay scla/rate/contract, or something...they will most likely fire you if you insist on the $7300 per location...by the way how large of a place are we talking? and how long did all 3 locations take?
     
  9. cclc1021

    cclc1021 Junior Member
    Messages: 26

    It was not 7300 per location, it was 7300 for each of the 3 locations. It took us about 7 hours to do all three locations the 1st time and then about 6 hours to do all the locations the second time around.

    Thanks for the feedback I will work on the structuring of the contract.

    I am a little nervous about the meeting on Friday. My goal is to restructure the pricing so that I am still making a profit as best I can.

    Any suggestions on how to make sure the customer understands what the signed? I really don't want to tell them how I determined my pricing structure i.e. labor, matrerials, gas, business insurance etc.

    However I will have to weigh the cost of doing business with this client to see if it is my best interest.

    I'll let you know how I make out at the meeting on Friday.

    Thanks
    Harold
     
  10. bgingras

    bgingras Senior Member
    Messages: 282

    Well if I sere to read it the way I think they did, it comes to $6100 or so...I think it's going to look to be about $1200 to much to them, your invoice that is...the contract really should state either per puch is this much, or per inch is this much and that's it..and make sure that you also say that the depth is determined by some set factor like the NWS report from the storm or something official that can be looked up.
     
  11. DJ Contracting

    DJ Contracting PlowSite.com Addict
    Messages: 1,392

    Wow

    Lets see 1 Truck w/plow two walk-behind spreaders three snowblowers 13 hours of work @ a total of $21,900 thats $1,684.62 per hour of work where did you get that experience? There arn't many Drs. that make that kind of money.
     
  12. mike33

    mike33 Senior Member
    Messages: 335

    Bobcatservice

    Harold, What part of Md. are you from? Im in Allegany county ill look closer at your post later this evening.

    mike
     
  13. bgingras

    bgingras Senior Member
    Messages: 282

    if you read he also sates that the total bill for all 3 was $7,300
     
  14. bgingras

    bgingras Senior Member
    Messages: 282


    you still saying it was $7300 fopr each location, and not $7300 for all 3 combined like I think you mean?
     
  15. Mdirrigation

    Mdirrigation Senior Member
    Messages: 408

    Why would you renegotiate the contract ? You sold them on a service at the prices you quoted , they agreed . Thats sales . Undoubtly the customer will want to pay less , dont we all . It seems that the person who signed the contract didnt expect that we would get a lot of snow . Thats their problem .

    I went thru this in the 1996 blizzard , customers wanted to talk me down due to the amount of snow , did I lose customers , sure , did I get paid , every last penny . For every customer I lost I picked up another.

    I wouldnt budge on my billing , services were performed as contracted , payment should be made as required .

    Pricing doesnt have to be fair , it has to be agreed upon by both parties , As a customer 10 dollars an hour for a truck and plow is fair , as a contractor
    $ 200.00 per hour is fair for a truck .
     
  16. Mick

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

    I just looked real quickly cause it's too confusing, but the first thing I see is your bracket for 10" is too big of a jump. No way can you justify the jump in brackets, such as - Plow parking lot "$350.00 per hour per snow removal operation" for 5" to "$2000.00 per snow removal operation. Plow parking lot _$1100.00" for 10". This is just site #1. You really need to take a look at your final brackets compared to 5" brackets. I started to, but just got lost in all the confusion.

    Or is that $350 per hour???
     
    Last edited: Feb 27, 2006
  17. Remsen1

    Remsen1 Senior Member
    Messages: 188

    Do you have a copy of the agreement that they signed? If so, apply that to the services that you performed.

    For example going with your original pay scale (which is not confusing to me now that you cleared up the per hour vs. per push issue). Make sure you can justify your price by showing the number of visits to each site, and a record of the accumulation upon each visit. ex below (of course my numbers are do not reflect the days events cause I wasnt there:)

    Date---time----Site----Accumulation--Rate
    2/27___6AM__Store#1_______2"_____$750
    2/27___9AM__Store#2_______4"_____$375
    2/27__11AM__ Store#3______ 6"_____$675
    2/27___1PM__Store#1_______6"_____$1350
    etc.etc.etc. etc.


    Then professionally explain that they are paying for around the clock service, a crew large enough to handle the work, and that you were focused 100% on their account, your persistence prevented liabilities. Your fees are based on an estimation of how long it will take to service the property under those conditions taking into account man hours, fuel, insurance, wear and tear, being on call 24 hours, etc etc etc.

    Here is some advice. Simplify the wording of your price rate to something like this:

    XYZ Snow company will perform the following services: ____(shoveling plowing, salting etc)___________ with a 1" trigger during store business hours and a 3" trigger after hours. When servicing the properties the following rates will apply:

    Accumulation---------Store 1---------Store 2 ----------Store 3----------
    1"---------------------$550 ----------$375--------------$375
    2"-5" ------------------$675----------$375---------------$375
    6"-9"------------------$1350----------$675---------------$675
    10"+------------------$3100----------$1550--------------$1500

    You shouldn't have to explain any further how you came up with those prices and as long as you sound as if you have confidence in them you shouldn't loose this account.

    One last piece of advice is to remain open to suggestions from them and take your time to consider whether they make sense for your operation. If you consent to take their recommendations into consideration you may save this one and you may improve your operation (help you land customers more easily in the future).

    The biggest things jumping out at me is why does it cost more to have the sidewalks done? Does this mean you're not spreading salt in the parking lot?

    Didyou wait until there was allot of snow to start plowing? If you waited and it was after hours you could point out that this saved them money. If it was during business, it took way too long, you need to wake from your nap a little sooner.
     
    Last edited: Feb 27, 2006
  18. Tri-County INC.

    Tri-County INC. Member
    Messages: 57

    Wow

    that is rather confusing i see what you mean about the price difference, it takes more to push a 10" storm than it does to push a 5" strom, but the price jumps are way to drastic, however i understand what you are trying to say. might want to consider using orginal pay scale... hmmm the more i think about it the more i get lost... sorry :confused:
     
  19. Idealtim

    Idealtim Senior Member
    Messages: 268

    This is very confusing and i can see where the property owner wants to meet with you because they dont understand it either. It doesnt need to be this hard.Something like this[what i use]...

    lots
    1-3'' x an hour
    4-8'' x an hour
    9-12'' x an hour
    walks
    1-3'' x an hour
    4-8'' x an hour
    9-12'' x an hour

    So on and so forth.Plain and simple [x represents cost].I know your trying to make the most accurate estimate on every property but it just isnt working.
     
  20. dumper

    dumper Junior Member
    Messages: 28

    This is the reason I only plow..........

    by the hour, and invoice for each piece of equipment used!

    Easy to understand, and customer ALWAYS gets what they want. We plow what they want, when they want it, with the number of pieces they want, for how long they want.

    Have never had an invoice problem in thirty-five years!

    A contract like the above would be too confusing for everybody involved.