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Flat rate per season

Discussion in 'Commercial Snow Removal' started by Blink74, Dec 11, 2009.

  1. Blink74

    Blink74 Member
    Messages: 30

    I've got a prospect who is requesting me to quote snow and Ice management at a flat rate for the entire season. This is not a common practice here in Central Ohio since our winters are so sporadic. I'm thinking I will take the maximum number of events expected and multiply by the minimum $ I must make to get a number. Any thoughts?

    Is this common elsewhere?
     
  2. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    You're on the right idea. You might not get away with using max events. Average, plus a small factor increase is more like it. Try to get them to sign up for a few years to cover your risk.
     
  3. MahonLawnCare

    MahonLawnCare Senior Member
    from Ohio
    Messages: 851

    Yes, it's common. Most people are requesting a flat price in order to budget for it. It makes our job in Ohio impossible because our winters are either horrible like last winter or like this winter where there have been about 3 saltings so far that's it. I usually do what you mentioned as far as the max events to cover my a$$. I would rather lose the bid than lose my business.
     
  4. Blink74

    Blink74 Member
    Messages: 30

    Anyone have an idea of multipliers for Cental Ohio?
     
  5. digit

    digit Member
    Messages: 94

    If you know the average plowings for the last five years take that number maybe add a few.Maybe some years you won't make out as good and them some years better.
     
  6. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    That's why you want to get a multi year deal.
     
  7. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    2COR is right on for the multi-year idea. Another option instead of thinking about "events" is to look at a 5 year average pre-cip total and figure out your price to service that average. And add a margin for your benefit. If you can cap it and go per inch or per push, per app or whatever over your cap then the multi year isn't so important. But build your cap and margin to a reasonable limit for your area. AND be wary of people signing this late, often they are headaches for varying reasons.
     
  8. digit

    digit Member
    Messages: 94

    A multi year year is defiantly better but sometimes hard to get. I feel it's just a risk you take.
     
  9. AGMI

    AGMI Member
    from NE Mass
    Messages: 36

    I am not in Ohio, but here is how I do it. I measure the square footage and figure out how long it will take me to plow it and how much material I will need to put down per application. Then I read the contract and see what thier specs are (whether it is a 1" trigger or a 2" trigger, zero tolerance, cap/no cap, etc.) Then I take the average (which for around here is 50" and 20 treatments) Then I try to get them to sign a multi year agreement and cross my fingers. But, I have by the inch accounts, seasonal accounts with a cap, seasonal accounts with no cap, and accounts by the push. So, we are profitable at every increment and we are covered on low snow years because of these accounts. These accounts are good if you get multi year agreements, but can be risky.
     
  10. Deco

    Deco Senior Member
    Messages: 453

    i have abetter idea, T&M . ;)
     
  11. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    Customer is requesting seasonal price....
     
  12. Deco

    Deco Senior Member
    Messages: 453

    sell them what you offer . i dont let anyone direct my business , especially pay schedule.take it or leave it . they are the ones who are still shopping and not signed
     
  13. Burkartsplow

    Burkartsplow PlowSite Veteran
    Messages: 3,245

    Half of my accounts here in Cleveland are seasonal and the other have are per push. Either way I am making money and if I go above my set number for the seasonals I make it up in my per push since they are priced higher. It is the way to go I think living in Ohio with the winters we have year to year. Good Luck.
     
  14. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Seasonal are the way to go. Everyone bitches that they would lose money if it snows a lot. But you never see them wanting to give money back in a slow year. You should be billing salting as a extra.That's how you lose money if you include in the seasonal price ,unless you really know your weather and numbers.
     
  15. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    I prefer to provide what they are buying.....
     
  16. Ramairfreak98ss

    Ramairfreak98ss PlowSite.com Addict
    Messages: 1,905

    yeah ive asked the same questions broken down to price and events etc.. search my older posts from a month ago...

    This is how it works in a nutshell.

    You live in whatever state you live in, Ohio i think you said?

    07-08 you got 2 plowable events, say you're to plow every 2" trigger, so you did lets say 7 pushes.... then you put down salt 35 times

    08-09 you had 15 plowable events "big winter" , 2" trigger, you made 50 pushes, and salted 45 times.

    Salt x $100 per =$4500 season
    push x $150 per =$7500 season

    Now thats a hard winter say, and you KNOW you can very well have that type of winter this year so you bid $12k... you'll have companies coming in at 8k just because they figure they could have an 07-08 winter where they'd only bill out 6k and this would make them 2k extra for doing nothing.

    Its a chance game, i read all the time about large and small companies buying insurance to cover these problems they run into in seasonal contracts.

    I bid them as i see the possiblity... Last year we quoted seasonal and per push to an account. It was 13k seasonal. They denied and took the per push... we billed out $12.8k and it wasnt a rough winter at all, more than the last but certainly a hard winter could bill out 20-25k easy.. This year we bid 14k seasonal and "less per push" lost the bid, we wernt even in the top 3 for the manager to chose from :/

    Its kind of playing the middle number, but i for one LOVE when it snows and LOVE even more the MORE it snows and like to keep it that way. Never do i want to think about losing money because it snowed too much or possibly "cheaping out" on an account or client just because its now cutting into our profits by feb/march and making bad business decisions or to tarnish our reputation for good service.

    If we have a bad winter, ill be laughing to the bank when it comes end of February and other seasonal companies that had outbid us that way are rarely on site, causing frustration among managers and barely suppling any salt or calcium