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Does recession bring out new/lowball plowers?

Discussion in 'Commercial Snow Removal' started by Alan, Dec 7, 2001.

  1. Alan

    Alan PlowSite.com Addict
    Messages: 1,393

    We're too new in the business to have been through this before, missed the 89-90 recession. But we're seeing layoffs almost daily up here right now so it's definitely starting to get close to home this time. What I'm concerned about is the guys who have all those new trucks, either financed or leased, because the customers think they are SO pretty. Granted, they are locked in for this winter, but next year may be a different story. I'm afraid I can see a lot of lowballing just to keep cashflow and make them payments! I cna also see a lot of now unemployed guys with a truck hangine a beat up (cheap) plow and going after a few residential accounts to pick up extra cash. You guys who have been in this lond enough, is this a valid concern for next year on the commercials and even this year on the residentials? Any other thoughts on the economic downturn? I know plowing is a necessary service, so I don't see the demand going anywhere but I think the supply side may see a glut and resulting price shopping if things stay down long enough.
     
  2. JCurtis

    JCurtis Banned
    Messages: 862

    How do u think I got started....

    In this business... LOL

    Seriously, what you are concerned about may happen, but being pros' we should be able to point out that we are in for the long haul.... not just the quick buck.

    Besides, if the economy gets better in mid year the way the economists are predicting. these lowballers will disappear for the most part, going back to their regular line of work...

    Smart thing to do would be get them to sub for you and take on more work...

    Gotta get it before John Allin sews it all up :D LOL
     
  3. Eager Beaver

    Eager Beaver Senior Member
    Messages: 104

    I have to agree with Jeff on this one. Your old customers that you have established a repore with will not leave if you have given them the service they expect. Customers that accept a low baller will more than likely be back and at that time you can decide if you want them or not. Replace them with good new clients that respect you proffesional status and work ethic's. Also the more years you are in business will help your customers to know that you are not going to be here today gone tomorrow..

    Good Luck and Hang in There
     
  4. Ohiosnow

    Ohiosnow Senior Member
    from Ohio
    Messages: 415

    yes & no : you will see some in res. but hardyly in difference in comm. Here in Ohio steel mills & tire factorys there is & was many times major layoffs & plant closings over the last 30 yrs. besides a couple of recessions. But never a nuff to make a real difference in the bottom line.
     
  5. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    Been through the good times and the bad times.

    I wouldn't worry too much.

    Geoff
     
  6. JD PLOWER

    JD PLOWER PlowSite.com Veteran
    Messages: 751

    It's been my experience that lowballers come out more so after bad winters (high snowfall total). After 93' which was a great year to own a plow (86"). Around here everybody and their grandmother bought a truck and called themselves a contractor.
    Prior to that it had been five years since the last good snow year and when our accounts realized how much they were spending they decided to shop around, thats when the lowballers came out of the woodwork. The next year we ended up losing about 1/3 of our contracts because of price. This was coupled with a slow economy and a lot of unemployed contractors looking for work. If this year turns out the way it did that year then you will more than likely see a drop in prices come fall. But if its just an average year or below average I expect to see prices stay the same. This year we had an account close down September 1st and I had just sent out a notice to them a week before asking for a renewal (as a plowing contractor your always the last to know!)As a side note, my father said if it had'nt been for that year he would more than likely lost his house since the economy was so bad in the previous years.

    Alan look at this way alot of those new trucks will be for sale come spring if its not a banner year.
     
  7. casey

    casey Banned
    Messages: 180

    Scrubs die a quick death in snow removal. Too much dedication necessary to be ready 24/7 during winter months. We pick-up new contracts every year from customers who have previously hired an unreliable lowballer.
     
  8. Alan

    Alan PlowSite.com Addict
    Messages: 1,393

    No matter what happens, I think I'm in pretty good shape. No major payments to speak of. I've got enough locked in for this winter so that I'm pretty solid there. I looked at upgrading a truck last month but decided against it, I didn't feel comfortable taking on a $400+ payment right now.
     
  9. OBRYANMAINT

    OBRYANMAINT PlowSite.com Veteran
    from ohio
    Messages: 534

    i agree with above posts

    not woried because of economy.... i see a bigger changes and slight hint of extra competition the years following big snows the last for me was 95/96 the following year many people bought trucks but then they were all for sale come spring
     
  10. Rob

    Rob PlowSite.com Veteran
    Messages: 306

    Same as lawns etc.
    I think that the same applies over on the green side. Whenever the economy turns down, anybody with a push mower and a pickup (or trailer) becomes a "landscaper". The truth be told they can cut the lawn and take a stab at some other stuff, but they can get out there and take a couple customers that are looking solely at the bottom line. Those customers will generally want to come back after they get hung out to dry once or twice or the quality of the work is just not there. The question then becomes whether you want to take a customer back that is constantly looking to cut corners. (and if you do, at what price increase)

    Just my opinion,
     
  11. HandyHaver

    HandyHaver Senior Member
    Messages: 279

    I can't speak for the green or white(fairly new to me) industry, but in my industry (general contractor) with all the down sizing going on the past 5 years or so & now with a slow enconmy, seems like everybody with a station wagon or mini van with a couple of Home Depot economy ladders tied on top is a contractor. The way I see it is you gotta do what you gotta do to feed your family & if it means lowerballing my prices & the customer is shopping price over quality, proffesionalism, insurance, ect.........than so be it. I've been doing what I do for a long time and have seen alot of these fly by nighters come & go. If you are a proffessional than you charge a proffesional rate and let the wanna be's have the bargin shoppers. Some times losing a bid to one of these can hurt but chances are they will be back. I'll stay busy with or without them!!

    Mark
     
  12. TRITONSNOWREM

    TRITONSNOWREM Member
    Messages: 81

    When the economy drops off so does everybodies money intake.The people that are out of work are looking for anything to make money.Everybody thinks snow removal is a big money maker, until they have to get the equipment and maintain it. The snow removal buisness takes dedication.You just cant go into the buisness and call yourself a successful contractor the first year .You have to maintain that drive for years to be successful and be considered a professional!!
     
  13. Big Todd

    Big Todd Senior Member
    Messages: 126

    Great site by the way; I'm a new member and I'm excited to have the chance to talk plowing with all of you.

    As far as low-ballers go, I agree with the other posters that said that those guys either won't last or won't get repeat business.

    When we first started out on our own a few of years ago it was just two of us and we had two apartment complexes. We were priced prety close to some of the other big guys in the area and we did an awsome job for them. The next year they changed the way they wanted pricing (from per push to hourly) and we got "low-balled" big time. As you can guess, they did a rotten job and the following year we were asked to come back. Unfortunately, as much as the property manager wanted to use us, we just couldn't come down to the price that the parent company was looking for.

    Well, here we are two years later and the property manager is at a different place. She called up last minute, begging us to plow their place (and their sister apartment complex). because of our reputation from a few years ago, we were able to walk in and set our own price.

    Bottom line, what goes around, comes around.

    Todd

    PS: Saw the first flakes of snow this morning! It accumulated on the grass and was gone within a couple of hours:(. I Don't expext we'll have much of anything to plow for at least another week or two, but it was certainly an encouraging site.
     
  14. Deere John

    Deere John Senior Member
    Messages: 410

    We see lots of new faces each year:
    They have old trucks, old plows, balding tires and routes that take them all over the place.

    We think they have no insurance, pay no taxes, have no backup equipment and don't necessarily love the sport in the first place.

    We usually only see them for one year, or portions of the season. We get calls from their customers, but the customers are always just shopping price, so we can't compete.