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General Questions from the New Guy

Discussion in 'Introduce Yourself to the Community' started by Rico T., Feb 11, 2011.

  1. Rico T.

    Rico T. Member
    Messages: 37

    In a hurry? Skip to the bold section...

    For the rest of you who have a moment, allow me to introduce myself. My name is Rico (I know, the username wasn't clear enough), and I've been a lurker on this site for a while now. :waving: I've always thought plow trucks were cool, and I've long thought that I wouldn't mind doing it for some extra cash. And while I love snow, I also decided long ago that once I bought my own house, I was never shoveling an ounce of snow again. However, due to my dad's new remodeling business and Chicago's worst winter in 12 years, I've begun taking the snow plowing concept much more seriously.

    My long-term goal is to operate a small snow plowing service as a branch of my dad's business within a couple years. For now, I'm finishing up college and trying to get my foot in the door of a computer programming career, so this is still in the planning stage. However, in the meantime, I'll be researching every aspect of this venture that I can. As part of that, I'd like to pick the brains of the experienced people on this site. :salute:

    I'd like to use this thread as a continuous platform for any questions I have; here are my first ones:
    For residential work such as driveways and small parking lots, how do you establish your prices? Do you go by an hourly rate? Do you have a standard rate for a driveway? If so, how does that rate fluctuate when the driveway is a different size (50 ft. vs 15 ft.)? Same for parking lots: flat rate or hourly? Or, do you just find out what other locals are charging and shave off a few dollars?

    Thanks in advance for any replies... :cool:
     
  2. JTVLandscaping

    JTVLandscaping Senior Member
    Messages: 860

    Figure out your costs first. Don't undercut anyone. What they charge has no real bearing on you. My truck is paid off and my insurance rate is low, therefore my expenses might be less than a guy making payments with higher insurance. I learned pricing through trial and error. When I won everything I bid on, I found I was too low and working too hard. Then I bid higher, and lost every bid one year. I was too high then. That's when you find your middle ground. When you do the math, figuring insurance, truck payment, fuel and all the other things, you can figure out what you need to make per hour. Add on tax and a profit and you get an hourly rate. If you figure you need to get $150 an hour, then you'd need to do 3 $50 driveways in an hour. In my area, that's real easy to do, but I don't know your market. Get jobs close together, figure out your route with as little back tracking as possible, learn to operate long hours with no sleep and you're ready to make money. Welcome to plow site, I hope you find this site as helpful as I have.
     
  3. 32vld

    32vld Senior Member
    from LI, NY
    Messages: 620

    Why try to build a customer base on doing the job for less?

    These customers will only dump you for the next low baller.

    If the going rate for your area is $40 then go for the $40. Doing a job better then others will keep those customers that want a good job done.

    As when starting out a business costs need to impact price charged. However if everyone uses 30" blower and it takes them a 1/2 hour to do a drive for $40 dollars you can't charge the $80 because it takes you 1 hour with your 15" blower. (yes I know you want to use a plow, but the logic is the same).

    As to business costs, I wouldn't buy a truck unless you can make the payments without getting one drive way to clean all winter. Repo man and the banks don't care. Same goes with buying a plow. If it takes a whole season to pay off a plow, then you plow for free in a sense until the plow needs repairs or replaced. By then you should have a cash reserve.

    If you already have a truck, can afford to buy one with out needing it to make money, or use one of dads trucks AND THEN you can afford to buy a plow for cash then go for it. If not then start out with a snow blower.
     
  4. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Damn good advice for anyone starting out!
     
  5. plowguy43

    plowguy43 PlowSite Fanatic
    Messages: 5,269

    Very True, also factor in maintenance and repair expenses for both the truck and plow.
     
  6. Rico T.

    Rico T. Member
    Messages: 37

    Thanks for the replies, guys. Alright, so the general consensus is to (1) find out what others are charging first, and then base my price off of that without lowballing, and (2) calculate what my costs will be so I know how much I need to make in order to cover myself. Got it. Thumbs Up
    I can afford to buy one without needing it to make money, and actually, that was my original plan. I'll need a truck to haul stuff, and I would still put a plow on it even if it was just for my driveway and some friends' driveways. I just figure that if I have the setup and I can make it profitable, then I might as well go for it. :p
     
  7. KEC Maintaince

    KEC Maintaince Senior Member
    from N.J.
    Messages: 265

    also do not get greedy only take what you think you can handle with a big storm.
    if you make lets say 600 bucks with a 8-10 in storm and it takes you x amount of time think how much time it would take you with 12-18 inches and how your customers will feel if you are late and they have to dig them selves out.
    also have a back up plan or some one who can back you up if something happens.
     
  8. Rico T.

    Rico T. Member
    Messages: 37

    Good point, I hadn't thought about that.

    Now, for driveway plowing, do you guys mainly work based on contracts or do you take each storm individually?

    (I'd like to emphasize that I'm not immediately basing my decisions entirely on whatever is posted, I'm just gathering information to get ideas. The way I see it, you can never have enough knowledge, and this is no different. :cool:)
     
  9. KEC Maintaince

    KEC Maintaince Senior Member
    from N.J.
    Messages: 265

    i dont do a per say written contract with my cust i tell them the terms and they tell me what they would like and we agree.
    you will have to feel the customers outand get to know them.
     
  10. KEC Maintaince

    KEC Maintaince Senior Member
    from N.J.
    Messages: 265

    oh yea the back up plan i didnt think of it either till i needed one.
     
  11. Rico T.

    Rico T. Member
    Messages: 37

    This presents a great deal of risk, in my opinion. I mean, I could see using an oral contract if you were starting out or if you have a low number of regular customers that you've done business with for a while. In that case, I could even see it being nothing more than "Hey, I'll plow your driveway for 40 bucks. Okay, cool." But if you're operating as a full-on plowing service, and you're consistently providing regular services to new people, not having a written contract seems like an ugly dispute waiting to happen. :gunsfiring:
     
  12. KEC Maintaince

    KEC Maintaince Senior Member
    from N.J.
    Messages: 265

    like i said it has worked for me
    the customers i deal with come highly recomended
    treat your customers right and they will return the favor yes you will find some who will complain deal with it and move on.
    remember 1 thing every new customer is a potential long term client i have done numerous new customers that still call but i refuse to go back because they wanted way too much extra or complianed about the price i have read a lot on these forums thats its easier to cut your losses in the begining then to get screwed in the end.
    next yr is a whole diffrent story.
     
    Last edited: Feb 11, 2011
  13. Rico T.

    Rico T. Member
    Messages: 37

    Hey, that's your system and I give you credit because it works well for you...I'd like a little more security to ease my mind though.

    Anyone else have thoughts on contracts?
     
  14. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Contracts have been talked about ALOT on this forum... use the search function to get MANY opinions ... IMO if your plowing as a business have a lawyer draw one up for you... its some of the best $ you'll spend...probably around $200 or so... sure you could get some off of this site but you get what you pay for. One missed comma or vauge text and its going to cost you thousands should something happen at the account.
     
  15. Rico T.

    Rico T. Member
    Messages: 37

    $200 definitely seems like a good investment to protect myself, thanks.. Thumbs Up
     
  16. Rico T.

    Rico T. Member
    Messages: 37

    New question:
    When buying a first plow truck, is it better to buy the truck and plow separately, or to buy them together if you can? I see a lot of deals on trucks with plows, but then I wonder if the costs of fixing up the plow would negate the money saved by buying it used. Also, how does rust affect plows? I rarely see a plow without rust, and I would think that it would be important to prevent that...