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contract billing and satl

Discussion in 'Business Fundamentals' started by OBRYANMAINT, Sep 4, 2002.

  1. OBRYANMAINT

    OBRYANMAINT PlowSite.com Veteran
    from ohio
    Messages: 534

    as i get deeper and deeper into accounts that are a contracted seasonal set price i find my self wondering about adding salt applications to it.Currently some do and some dont, but with the greatest fluctuation in the application rate and number of apps.I am always hesitant.

    I have had as many as 56 apps in a season and as little as 23, yea we can just go to the average , but i am still skeptical

    how does everyone else handle it?
     
  2. SnoJob67

    SnoJob67 Senior Member
    Messages: 384

    I would figure out how many applications you would put out over the course of an "average" season. If you were just as likely to have seasons where you put out 56 apps as you were 23, then about 40 apps would be your average. If you usually put down 23-35 apps and have only put down as much as 56 apps once, you might want to try a 35 application average. Just play with your numbers a little bit and you will have a better idea.

    Try multiplying application pricing times numbers of applications, figure out approximate usage and you can see how much you would profit under different scenarios at a given yearly price for salting.

    If you come up with a reasonable number, you will have fluctuation year to year, but in the end you should end up pretty close to where you want to be profit wise, even with as unpredictable as winter weather is in most markets.

    Selling commercial customers on seasonal is a tough nut to crack in my market, but the above should give you a starting point to work from.

    Running a lot of "what if" scenarios will help you get a better idea of how you want to do business.
     
    Last edited: Oct 18, 2002