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GIE's Snow Magazine Cover

Discussion in 'Business Fundamentals' started by sunriseturf, Jan 6, 2007.

  1. sunriseturf

    sunriseturf Member
    Messages: 54

    Anyone catch the cover story on the 2 guys that run the residential plow run with 1800 customers. I like a lot of what I read about these two...seem like good hard working guys with a good philosophy....service and quality over price ect They had a good marketing plan and had the right attitude on low ballers. Then I read on and looked at some of the numbers. 1800 customers - anywhere from 17-28 events per year and a snow revenue of only $400,000? My first assumption is that one of these three numbers is wrong and I am guessing it's the revenue from the article. This number should be $1,000,000. I hope it is for their sake because say they do 20 events that means they only bring in $20000 each time it snows? That comes to about 11-12 bucks per driveway. I understand that the route density is high and everything and no shoveling and no salt. Does this seem right to anyone?
     
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Agreed. It seems like the more some of these guys due the less they make.In one of my other threads a company with over 300+ subs and they only do 3 mill? Maybe they just don't want to say exactly what they make?If i did drives my low end would be 400.00 per. 1,800x400.00=720,000.00 divided by 21=34,000.00 per snow. But I do like some of their ideas.
     
  3. sunriseturf

    sunriseturf Member
    Messages: 54

    I think they would have been better off just saying they don't want to disclose revenue. By throwing up that 400K figure they look like bad low ballers which from the look sand sound of the article they are not. It doesn't do them any favor because I am all for making as much money as possibe in this business. You've got to want to be able to get out of bed for this EMERGENCY service that we provide.
     
  4. mcwlandscaping

    mcwlandscaping 2000 Club Member
    Messages: 2,557

    i agree, when i read the article the $400k price seemed WAY low for that amount of driveways, and at the same time there is a whole part about how much they hate lowballers. Doesn't make sense

    AND!! it says that their 05-06 revenue was $400k and they project that it will be the same this year?? either means they gained the same amount they lost from the last season, or they dropped the prices on some of the accounts they have just to keep them and then took on a few more. I agree with the above poster in saying that they should have just said they didn't want to disclose that info instead of making themselves look bad.

    I have to give credit though, it seems like they have some really good ideas as far as marketing and booking keeping goes.
     
    Last edited: Jan 6, 2007
  5. ThisIsMe

    ThisIsMe Senior Member
    from Mass
    Messages: 745

    Think about it. As many competitors we all see in our area, what would it take to get 1800 residential customers?

    Only one thing could get them that strong in the market. Lowest price wins.

    On the other hand, two people, two trucks, $20k per an event? Or do they have more people and trucks?
     
  6. mcwlandscaping

    mcwlandscaping 2000 Club Member
    Messages: 2,557

    20 regular employees (probably close to that many trucks) plus 1 sub.......1800 accounts with two trucks?? that'd be a miracle!! Well, it could be done but the miracle would be if they could still keep the accounts!

    they said in the article that each driver takes care of around 100 accounts per storm. So, 18 trucks.
     
  7. sunriseturf

    sunriseturf Member
    Messages: 54

    yeah i think it was close to 18-20 trucks going out......he did say that ont truck if it is routed right can do 100 driveways in six hours. I beleive that if it is in a development....have plenty of room to put the snow and can bust the drive out in a couple of minutes. The did say all they do is plow......no salt or shoveling. If they can get away with that god bless em.......They are crazy not to salt though....they can increase their revenue and profits in insane amount without to much overhead or additional labor.

    I found all this fascinating. All of my work is commercial and industrial except for 2 or 3 high end landscape management accounts. I still don't know if I would want that headache. I think you have to be geared one way or the other. Can you imagine if someone vandalized all their trucks and a monster storm came? 1800 phone calls. Makes me want to vomit thinking about it.
     
  8. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    The tracking of customers and they way they aquire them with direct mailings and word of mouth is great, but the numbers really don't come out right. Maybe they were bragging to the mag writers. I would think they would check it though.

    It also sounded like they bill on a seasonal rate, not per event.

    1800 driveways
    20 trucks
    6 hours
    Average 20 events.
    $400,000 revenue

    Those are the numbers in the article.

    That means:
    Each truck has 90 drives and has to do each in 4 minutes at $11.11 per drive.

    They also said they were down to 25% profit

    I hope some of the numbers are wrong, because that is LOW balling in my part of the woods. I don't care if they are right next to each other and you have a truck that can go without gas and a driver that can go with out food or pissing for 6 hours. That must be a heck of a technique they do when plowing a driveway.

    I would like some clarification from Snow Magazine on these numbers.
     
  9. chtucker

    chtucker Senior Member
    Messages: 618

    So doing 14 driveways an hour, at $11 = $154 per hour, not bad in my mind..
     
  10. JRSlawn

    JRSlawn Senior Member
    Messages: 346

    I also saw the cover those guys are just north of me there market is crazy these guys are doing driveways unlimited for like 150.00 per year. The bad part about it is some of them are moving down here and are wondering why I am charging them $30 per time and we get less snow. Oh well that is why I try to stick to commercial.
     
  11. snoking

    snoking Senior Member
    Messages: 161

    $222 ea. drive for the season....

    $400000-
    $10,000 insurance
    $12,000 liability and comp
    $32,400 payroll 18 people 6hrs per night, 20 trips
    $18,000 in fuel for 20 trips

    $72,400 in basically set cost for year

    $327,600 left for the 5 transmisions they will replace, taxes(which should be low because its all resi), payroll taxes,

    worst case they make 100,000 ea and i bet i still paid all the expenses for the their caribean vacation for two weeks while everyone else is doing leaves.....

    i dont know ....hard choice but i bet id do it in a second...my 2 cents
     
  12. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,868

    When are you people going to get it through your heads that every market is different and therefore pricing is different???????????????????????????????????????????????

    While I think snoking is low, his numbers are a lot closer than what you guys are throwing out. Look at chtucker's figures?

    Look at what these driveways are, probably 2 car's wide, 50-60' long at most? Think in town, small lots for the houses, small drives, couple minutes per drive. There's companies around here that could crank that many out in less time.

    And you guys that say even $25-$30 per drive would be sitting home doing nothing, even here in GR. I know I would be higher than $200\season, but I wouldn't be able to be much higher if I wanted to get into the residential market. Salting residential driveways? Absolutely unheard of around here.

    Keep in mind, ALL markets are different and pricing is different in those markets. Way too harsh to be calling them lowballers just because they have those kinds of numbers, especially when you haven't seen all the numbers.
     
  13. sunriseturf

    sunriseturf Member
    Messages: 54

    I totally agree that all markets are different. I guess they wouldn't be doing it for that long and for that many years if they weren't. It's just when I did the math $11 per driveway seemed insane. Even if they are right next to each other and small. It just seemed like something didn't add up. I commend them though. They take a completely professional approach and the way they do business is great for our industry.
     
  14. DBL

    DBL PlowSite.com Addict
    Messages: 1,310

    they cant be making any money i hope they have second jobs
     
  15. ThisIsMe

    ThisIsMe Senior Member
    from Mass
    Messages: 745

    Anyone wanna bet they have some condos or apartments in their contracts and they are counting each apartment or condo as one in their total of 1800?

    I see no mention of apartments or condos or such. How could such a large business covering 1800 houses not have one condo, apartment complex? Or do they turn these down in favor of single families? Ya right.
     
  16. DBL

    DBL PlowSite.com Addict
    Messages: 1,310

    i wouldnt consider a condo or apt complex residential and i dont think they would either
     
  17. ThisIsMe

    ThisIsMe Senior Member
    from Mass
    Messages: 745

    Neither would I. I just wonder how someone can get 1800 driveways, but not one complex. Just thinking out loud is all. :)
     
  18. DBL

    DBL PlowSite.com Addict
    Messages: 1,310

    yeah i hear you i wonder how big the town or city is they must have a monopoly out there
     
  19. ThisIsMe

    ThisIsMe Senior Member
    from Mass
    Messages: 745

    Mafia?


    Chris
     
  20. Oshkosh

    Oshkosh PlowSite.com Addict
    Messages: 1,655

    No No No

    Not Mafia, they like a BIG return on their investment.lol