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Darn condo associations

Discussion in 'Commercial Snow Removal' started by Plowin in VT, Jun 28, 2008.

  1. Plowin in VT

    Plowin in VT Senior Member
    Messages: 233

    I know that one of my condo acct's is going to dump me this year due to me having to increase my rates (probably close to 40% due to me f'ing up when I bid it last year), even though I provided them with the best service that they have ever had (per all of the members of the condo board, many residents, and the prop mgt co).

    They will be sending the job out to bid, even if I was to quote them the same price as last year, and their sole deciding factor in whom to hire will be price. Obviously for this development, service means nothing, so now I wonder why I busted my butt last season? (yea, I know, I had a contract, and it wasn't their fault that I completely messed up pricing when I bid it....)

    Losing this account will definitely hurt, but IMO it's worth it, not to have to put up with all of their BS. I'm still pretty new to commercial plowing, but is this the way that most condo boards./HOA's act, or is it just this one? I'm going to be submitting bids to various businesses whose "plowers" last year hadn't even started their lots by the time I finished all of mine, but if most HOA's and condo associations only care about the bottom line, I might skip them.

    My business accts were also thrilled w/my performance last year, and even with a price increase, they will not be asking for bids from anyone else.

    Thanks for your input.
  2. MickiRig1

    MickiRig1 PlowSite Veteran
    Messages: 3,617

    Just because they put it out for bid does not mean you will lose the bid. You have to cover your costs and make a profit. Poor service could have you back for the second snow if you lose the bid. We pickup jobs all the time because the lowest bidder could not do the job. Clems snow removal with 3 trucks over 25 years old and a 1972 salt truck couold not do the job.
  3. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    the quality and hard work , do go along way....just be nice to them , if ur service was good, after a year or less with a cheaper service they will call back , they always do
  4. Flipper

    Flipper PlowSite.com Addict
    from CT
    Messages: 1,180

    All my condo's go out to bid every year. Heck most of my commercials do as well.

    Its just business. I called three companies last week to have my wood floors done. Probably will go with the guy who has done work for me before but I still look for the best price.
  5. NoFearDeere

    NoFearDeere PlowSite.com Addict
    Messages: 1,709

    I have one condo assoc. that has been with me for 5 years. Other companies have bid at 40% less than me but they still go with me. I know everyone there in all 36 units by first name, we stop and talk all the time, etc. So getting personal and doing a good job still does rate higher with some people than price.
  6. Plowin in VT

    Plowin in VT Senior Member
    Messages: 233

    Thanks guys, I just needed to vent a little bit. A "friend" of mine is the president of the board of directors there, and while hanging out the other day I mentioned that there was going to be a price increase, and she flipped out, and it got pretty heated and ugly (on her side). It's probably not reflective of all HOA's, but more along the lines of why I usually don't work for pay for friends!
  7. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    We service several associations. I ussally offer to resign with no price increase. I know what some of you will say, cost etc. Figure out what the replacement (advertising, bidding, etc ) cost is for a client then tell which is more cost effective. Our longest has been with us since 1999. We also over service these accounts @ no extra charge. Association work is like residentials (lots of bosses (& opions)), not understanding contrat triggers, but with higher dollars at stake. If you can pull it off sucessfully in my mind you can do anything.
  8. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    RLM , Well put, you know i have a few places the same way, i havent even given them a contract in 4 yrs...they just say go ahead...they know i give them over 100% and a free small service here or there, fair pricing , they just got with us...best way to have it
  9. Flipper

    Flipper PlowSite.com Addict
    from CT
    Messages: 1,180

    I agree, although I get signed contracts every year.

    It kind of goes along with my comments on fuel surcharges. If you keep the customer happy you will end up making more money, then if yuou have to constantly look for replacement work. Instead you can focus on growth knowing you have a solid base for income and for references etc.
  10. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    Dont get me wrong.... I will, and do raise rates and all time and material on the property is kept track of...This year there rates will be rasied, by a small amount to cover fuel costs.....I already bit the bullet this season, and they know that...I have even given them a heads up to budget slightly more for next season...

    and you should get signed agreements... I just got lazy on a few of them....shame on me

    Almost all the rest of the acounts go out for bid yearly...... One thing that you could try is a mulitiple season contract.. Raise the rate a little..but reallize that what you are getting is guariteed income or 2 or 3 years... As long as you still show a profit payup then thats a good way to plan on getting more equiptment, or newer trucks....You need a blance of accounts....
  11. cet

    cet PlowSite Fanatic
    Messages: 7,196

    I bid one of my grass contracts wrong 3 years ago. It was a 2 year contract with a 1 year option. They took the option year so I had to cut it for 3 years. I just bid it again this year and raised the price close to 80%. I got half of the work back. If you screwed up the price then you have to raise it by what ever percentage is needed. I made money but just wages and that was with some creative cutting if you know what I mean.
  12. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

  13. Brant'sLawnCare

    Brant'sLawnCare PlowSite.com Addict
    Messages: 1,748

    I wouldn't worry about it too much. If all your other customers were happy, I'm sure that some other jobs will come along from word of mouth.
  14. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    Ive learned over the years to bid what you need to bid to make it worth your while with out pricing your self out of business. You have to know your market. We picked up a new set of condo's last season and we happen to be one of the lower bidders but I still did ok. Some of the other bids were crazy in their pricing and like your condos told you, we were the best plowing service they have ever had. Condo's or HOA's can be a bit of a challenge at times but They are my #1 customers and they pay well and on time every month so they are my priority when it snows. Quality seems to be making a come back in our area. I keep trying to pound that into potential customers heads, for just a few bucks more they get so much more.
  15. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    i think after last years large snow storms/winter.... i think you will see a few things

    1. Some snow companies that dont take the winter seriously, or 1 truck guys that dont properly prepare, might have at somepoint , not showed up, or were rushed to do the job, ...(Keyword some, not all) ... those that did let there customers down, ...and im sure theres many, ...will be looking for a new contractor and maybe willing to pay for it to...

    2. The companyies that were good about showing up, ...i know alot of property managers that are over budget, and they will be looking at "other options" to cut the budget down, If you come in at a good price, and do a good job, this season, it maybe a great business move to "get ur foot in the door" for work in the following years....thats not to say do it for free,

    But bottom line is , find out Y are they taking bids and what they were unhappy with , price? or service? --
  16. Plowin in VT

    Plowin in VT Senior Member
    Messages: 233

    Price. My seasonal rate for them was exactly the same as their previous company, however they wound up with thousands of dollars in salting charges due to us getting over 10' of snow. At the beginning of the season I was salting at about 10% profit, however at the end I was salting at about a 20% LOSS due to the price increases. The salt shortage was a good thing for me, as I had to switch to sand/salt mix, which allowed me to make a little bit of money again.

    I don't think that my price increase is that terrible, going from $75 to salt 4 walkways (2 long, 2 short) and approx 90 parking spaces located on 2 lots (upper and lower) to $125 for just the lot, and $25 for the walkways, but I know that they see it as a 100% increase and are livid. For what it's worth, on your "average" push, I put down 800-1000# of bulk salt. Even though I "only" pay +$100/ton, I still need to take into consideration all of the wet salt that will become a giant rock if it's not used, the cost of my equipment and repairs, as well as holding costs, as they are invoiced net 30, yet pay about net 45. That, and I'd like to see some $$$ in my pocket at the end of the month!

    I've reached a point where I'm going to submit my bid, and if they take it, great, if not, THEIR loss. They'll be back once they realize the crappy service that their resident w/a plow (and probably no commercial insurance) will give them, and then they'll come crawling back..... By then, it'll be too late for a seasonal contract, and they'll have to go with a per push one

    Thanks for letting me vent folks!