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Contract based on yearly average or your yearly high?

Discussion in 'Bidding & Estimating' started by Krimick77, Oct 26, 2007.

  1. Krimick77

    Krimick77 Member
    Messages: 50

    When figuring out a new contract, what do you use to estimate your number of visits? I have seven years worth of history and have a yearly average of 32 visits per, with a high of 45 and a low of 25.

    Should you use a median between the average and high for your quote?
     
  2. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,045

    Take the median and make sure you bump it up enough. I want the benefit not them. If you can get a 3 year deal, the averages come into play more. I like including everthing, so I can plow or salt at my dicretion.
     
  3. powerjoke

    powerjoke PlowSite.com Addict
    Messages: 1,341

    i know your not getting alot of replies but the reply you have from JD DAVE is one you ought to take to the bank because he is a sizable operator and know's his stuff
     
  4. framer1901

    framer1901 Senior Member
    Messages: 812

    I'd do the same thing but with the wider spread in visits you have, I'd try for a multi year deal, they seem to smooth the edges better - unless you have two pounding years in a row.
     
  5. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    I always use 25 times for my contract price
     
  6. cet

    cet PlowSite Fanatic
    Messages: 7,202

    I'm in Newmarket. On a zero tolerance, black all the time I base MY stuff on 22 plows and 50 salts. I will not always put down the same amount of salt but I can work with that.
    You will be higher on both so don't use my #'s but that is something to think about. I have 1 contract where we do not salt until 1" and plow at 2". These #'s are less so you will have to bid according to your spec's.
     
  7. Krimick77

    Krimick77 Member
    Messages: 50

    Thanks for the feedback guys. They wanted one year, so I went with my numbers and added 5 visits to my average.
     
  8. PlowOrDie

    PlowOrDie Senior Member
    from ohio
    Messages: 164

    Please correct me if I am wrong...

    From what I am understanding, you guys charge per season (or per month?) stating in your contracts that this price is for a total of, say, 25 pushes and 50 saltings?
     
  9. framer1901

    framer1901 Senior Member
    Messages: 812

    I'm not sure of others but my seasonal deals are based off of x number of plows, y number of clean ups and z number of saltings - Coming up with a "pay me this amount and you won't ever worry about snowplowing" number - I don't mention amount of anything but coins....

    If we have a "good" year with alot of snow, I'm risking plowing for free a few times so I add that fudge factor amount so that the sting doesn't hurt so bad.
     
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    That's about it. Seasonal when it snows I go ,pay one price and that's it.
     
  11. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,045

    It's better for bugeting, you know somewhat, what your going to make before it even snows. A 50/50 mix of both is best, then your covered in a light and heavy winter. The bank likes the guaranteed money every month too.
     
  12. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    We always put a per inch or per storm cap on our seasonals, after which they go into per inch brackets, this way we cannot lose.......
     
  13. Jbowe

    Jbowe Senior Member
    Messages: 167

    Averages

    I do the same thing. I can go back 7 years so what I do is take my three biggest years for total then add them take an average and add 20 percent for good measure. Its worked out well.
     
  14. T-MAN

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

    Wow lucky you, worked out well for you not the customer right LOL.
    In our market here in NE IL you wont get any work bidding like that. The customers here wont pay Overinflated seasonal rates, when they know just 3 years ago we only got 32" of snow, and one of those storms brought 12". Way to many contractors here bidding on snow. Alot of lowballers dont know what to bid, so they get weeded out quick.
    HERE you can take your 10 year average, paid it slightly and you get work. if it snows alot you dont win. if it snows below average you know you still can pay your bills. There is risk involved for both party's.
    We do how ever have a Blizzard clause, so any thing over 8" in a 24 hour period is billed out seperate. It keeps things manageable, and we dont use our entire season's dollar amount on one storm. It is a good CYA policy, and it keeps our seasonal pricing very manageable and competitive.
    We try to do 50/50 on seasonal/ per push. This year we are about 65% seasonal.
     
  15. Jbowe

    Jbowe Senior Member
    Messages: 167

    Works out well

    Wow lucky you, worked out well for you not the customer right LOL.
    In our market here in NE IL you wont get any work bidding like that. The customers here wont pay Overinflated seasonal rates, when they know just 3 years ago we only got 32" of snow, and one of those storms brought 12". Way to many contractors here bidding on snow. Alot of lowballers dont know what to bid, so they get weeded out quick.
    HERE you can take your 10 year average, paid it slightly and you get work. if it snows alot you dont win. if it snows below average you know you still can pay your bills. There is risk involved for both party's.
    We do how ever have a Blizzard clause, so any thing over 8" in a 24 hour period is billed out seperate. It keeps things manageable, and we dont use our entire season's dollar amount on one storm. It is a good CYA policy, and it keeps our seasonal pricing very manageable and competitive.
    We try to do 50/50 on seasonal/ per push. This year we are about 65% seasonal.

    This is a different type of place then where you are. I live in Wasilla, the Matanuska valley, I plow as far norht as Hatcher Pass which is about 15 miles to the north. Last year it snow 33 feet at the base and much more at the top. 15 miles away where I live which is in the flats I got about 5 feet total. To the west 15 miles they got about 20 and thats how it goes here. We can have a Bliaard here ay my house which we did today and 15 miles away hardly a flake will drop. People here know that becuase tomorrow it will be the other way around. Maybe thats why I can bid as I do and it works. When its all said and done I usually will net out at about 25 to 28 % Besides its not three years ago that people worry about. Its this year. I have seen it 101 feet in 1998 then in 2001 we hadmaybe 10ft total for the season. I was working outside in a tee shirt in Feb that year and there was no snow anywhere. My clients pay me to be there when it does snow. Thats what they pay for whether its a 10ft year or a 101 ft year. But usually its somewhere in the middle. lol.