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How come the members don't form there own snow managment association?

Discussion in 'Commercial Snow Removal' started by Olderthandirt, Feb 11, 2006.

  1. Olderthandirt

    Olderthandirt Member
    Messages: 74

    With all the members on the differnt forums why don't we form some kind of managment group ourselves? Each member would be responsable for contacting and following up with a CVS, Wal-Mart, National Bank etc. I know it could be done. You do whats you can in your area and the other members would take care of there areas. Pricing would be more than competitive becoase your eliminating the middle man. Why be a sub when you can hire the subs for areas or jobs you don't want to do. As a group we could offer a price for snow removal if the company turns it down the individual contractors could submit another bid on there own, like getting 2 bites of the pie since differnt areas support dif. pricing structures.
    Now if your gonna bash me for the idea be gentle I'm like a virgin and need to be treated kindly.
  2. echovalley

    echovalley Senior Member
    from CT
    Messages: 456

    If it was only that easy.Within an hour of hearing about a major snow managment company losing the snow contract for a major pharmacy.I was in contact with them.They wanted one company to handle the whole state[we did about 10 of there sites]It just was to big of a contract for us to handle.They were not interested in splitting the state up.I don't know what ended up happening but most of the sites look like crap.
  3. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,921

    You a virgin ha!ha!:D

    That would be price fixing.... I think someone would complain..lol:waving:
  4. cincy snowdog

    cincy snowdog Senior Member
    Messages: 262

    hey mac
    possible yes,very hard probably but very possible.i would be up to possible support for this.yes sir.it is frustrating to see these big co. from another state that has never even seen the lot take it from you.yes i think we should stand up for something of this nature.the big guys are making the money and we are the ones out in the middle of the night or during daytona 500 or superbowl while they sit in their boxes watching the race or game.let get it rolling i am for it the truckers have a union we should be able to have one but with more on standards also pricing and directed to the snow industry.
    snow and ice control service union.

    speak up fellows lets get what we deserve-------respect.
  5. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,921

    I am a UNION member all ready. NO thanks!!
    There are unions that would swallow us hole. Like the Teamsters. etc... You would be a union guy getting the going rate, a pion. You would be working for the big corp. You would need a special license, carry a card and take some class.
    If you can not compete then get back on the porch.
  6. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    Who would set the pricing structure? In what state would you incorporate? Self insure, or umbrella policy? What would the dues be? Tax free or for profit. What percent goes to the head office? I've heard about some office space for rent in Erie. :rolleyes:
    You plan has you doing all the sales and service and collecting less money, because something would have to go into the CO-OP. What would the advantage be? We all watch one another's back, I send business that doesn't fit in my plan to "friendly Competitors" who work in that area or have the right equipment, my only pay back "what comes around goes around." If the work is spread to far or needs more equipment use Subs and Rental equipment.
    You have what you need right here. You can participate in numerous discussion groups covering all phases of the Business. You can find technical help, business help, weather, Networking, and it doesn't cost a thing.
    Read "ATLAS STRUGGED" by Ann Rand and perhaps you'll understand.
  7. NJ Plowman

    NJ Plowman Senior Member
    Messages: 799

    I am starting a new organization...something like SIMA...I call it AMIS...the Association to Manage the Industry of Snow! :sleeping:

    Now everybody send me your $100 yearly dues ASAP or I will stop the snow! :dizzy:
  8. Olderthandirt

    Olderthandirt Member
    Messages: 74

    Negative views will never make you the big money. How does any of the managment companys do any of the questions that was asked ?? There are the people that do and the people that get other to do it for them. and the big mangemant compamyies have got a bunch of subs doing exactly what I suggested and all they do is sit on there azz and rake in the money. Price fixing is not an issue. Each member here has accounts and he would continue to have them at what he determines to be a fair amount. but as a united bunch of plowers [managment co.] we could say were doing it for x amount of dollars, any company that did not like the price would shop around for cheaper bids. If an individual could plow for less he could submit his bid.
    It was an idea if others can form a mangement company with no idea of the plowing business I feel that the guys that have been in the business could form and run one alot better.

    Never any talk of low balling on this forum, must be missing it :nod:
    Last edited: Feb 11, 2006
  9. Tommy10plows

    Tommy10plows Senior Member
    Messages: 345

    I would like to stay and talk, to work out the solution to this, but it is finally snowing outside and I have to go now, the jeeps are calling me.
  10. justme-

    justme- 2000 Club Member
    Messages: 2,138

    Great concept, but not really praticle. do you want to be responsible by contract for Joe schmoe's effeciency and plowing pratices in New York while you're in PA? I sure don't. I also don;t want to be contractually obligated to so many people with no local touch in my business.

    I would be happy to be involved as a fill in driver- someone has trouble and needs subs could call on the association but the problem is sub pay varies so much from region to region, and I doubt any of us are willing to work for each other at less then local sub pay just because we all know each other from here...
  11. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    being realistic isn't negativity. The history of snow management companies seems to be take the money and run. Read the threads, they don't pay, then they fold. I am my own management company. I sell the service, purchase the supplies, assign the work load, send all the kiddies out to play in the snow. I then collect the monies, distribute their share to the subs, and bank the rest. I spend more time pressuring the subs to get their equipment right before the storm, and bailing them out during the storm, then I do on my own stuff. How would I do that if they're 250 miles away. Why would I want anybody else to stick their nose in and take part of MY money? Why would I want to get involved in snow removal in east west Egypt, unless you want to plow and send me some of your money. And you'll never stop lowballers, There will always be somebody who wants to be the walmart of snowplowing. Professional quality service, fair pricing, and good customer relations, they all combine to keep customers,. A solid bid backed by certificates of insurance, company history, and good references will get the customers I want, if the price is the only concern let then suffer though with the lowballer. Sooner rather then later the lowballer will f^%k up. Either the customer will have learned their lesson and will hire a pro. or they will find another cheap fix, and we all know how long they last.

    Record breaking snow yesterday, and I don't send any part of the money to anybody, except my insurance man, the tax man, the employees, the bank, the gas company, and the wife.
  12. Olderthandirt

    Olderthandirt Member
    Messages: 74

    I agree with everything you say except that I'll except a % from 250 miles away for a job that all I did was book. How hard is it to call around and get subs? You may be your own mangement company but your growth will be limited by distance.

    I don't think you know or care this is my last yr in the business. So it makes no differnce to me whether prices fall to nothing or sky rocket but after 31 yrs I can say with almost 100% certanty that they will be stayng where they are or actually getting cheaper after the cost of living. I made more net for 1 truck in 75 than I can in 2005 and the equipment sure did not go down in cost.
    Last edited: Feb 13, 2006
  13. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    Last night I spent three hours chasing after subs. difficult driveway to hard, one got stuck, tucking in parking lots, finding more parking spaces. Things I couldn't do from 250 miles away. That % also includes a percentage of liability, and possibly a dual state tax liability, additional insurances just to CYA.

    How do you evaluate the work ethic and ability levels of these subs that are so easy to find. How do you fulfill the contract obligation if he does not? I have a customer who I know spent about a grand on his sub contractor's equipment then deducting it from their pay after it snowed. If the Subs have any contracts of their own they will have first priority. What if he gets stuck in his mom's driveway and can't finish(happened last storm.) It's not as easy as just taking a %.

    I agree, a information exchange, some kind of guide to creating pricing structures, or just a basic business plan, including cost projections, and business education programs would help realign the pricing structure. I heard a state highway engineer tell a group " snowplowing is the most underpriced commodity in the state." Every industry deals with the lowballer, and they generally offer the same thing, a false promise of quality service/product for a bargain price. Buyers (SAM) is a perfect example, or Walmart, only the things at the end of the alse are a bargain, and the stuff thats cheap is CHEAP.

    It's kind of like the old saying " If guns where illegal only criminals would have guns" You can't organize or legislate inappropriate behavior. Operating below a reasonable profit % is definitely inappropriate behavior.
  14. justme-

    justme- 2000 Club Member
    Messages: 2,138

    Basher is right on the money- management is the concern, it's what the "company" would be doing, but realistically can't do.

    Seriously, think about it. I will propose this problem, you tell me the solution- hypothetical, but predictive of things you will encounter.

    You and I are both "members" of this assoctiation. You live in Philladelphia and I live in Boston. You are aproached through the associaton by a company operating a manufacturing business in a bordering city to Boston, they have a 1 acre parking lot with 2 loading docks which needs to be opened by 4am and kept open all day until 8 pm, Monday through Sat. They're Snow maintenance company from last year had financial trouble and closed so they need a new provider. They have contacted 2 other local contractors and have estimates in hand.

    You check the "association" listings and see I am the closest provider, with the next closest over 50 miles away. We agree I will service the account for the association. I would have to estimate the account on behalf of the association (are you going to drive up here to do an estimate? Of course not). Knowing what I need to run my business for the work involved in this account I make my estimate, and because I know I will be paying "commision" as it were to the association I have to up my estimate (bid) by the association fees to remain profitible.
    1st problem- how often do you think the association fees are going to put the bid over other local competitors? How many of us are going to be willing to make a narrow profit margin instead of the regular profit margin to keep the bid in line and still pay the association fees?

    Continueing, suppose the client accepts my bid from the association. After 3 storms we get nailed with a blizzard. This account is not my only account, thus while I am maintaining my other accounts which are not tied to the association snow builds beyond my ability to clean said lot. I maintain my personal clients and ignore the Associations's account.
    2nd problem- it's 5AM, company employees start showing up to a 4 foot snowbank and 2 feet of snow in the lot. I'm nowhere in sight. How are you, in Philadelphia, going to resolve the situation?

    Subsiquent questions: How do you enforce me to maintain said customer?
    How do you ensure I am doing an acceptible job?
    How do you convince me that the customer paying the association and me billing the association (which is in essence, you) for the services is a good idea and is any more trusting than if I bill the account and pay the association it's fair share?
    How about if I'm under 18?

    These are problems that WILL surface- how do you propose to solve this? If I am a responsible individual I would call in subs for said account before the snow got out of hand or call the association for help, again, before the snow get's out of hand. Assume I am not and the only time you find out is after it's too late.
  15. Olderthandirt

    Olderthandirt Member
    Messages: 74

    I don't understand why you would presume that I/me would be responsible for anything. An association is we as in all of us, if one does bad it reflects on the association. Its no different than employees good ones you keep and reward bad ones are history. As far as how do you get enough subs look at a couple threads where a management company asked for subs and there are plenty of subs available. You line up 3-4 for as back ups for every property. And why would you want t pay a % to be a part of an association
    #1 growth #2 advertisement and name recognition, IE. SIMA #3 the % you pay to belong could be recouped from volume buying discounts.

    If management companies are so bad why are they so successful in getting contracts.? Will there be problems YES same as there is for any business. I don't have all the answers but I know there out there and I know that someones going to put together an association that will be doing most of the plowing in yrs ahead. If your not the biggest its hard to survive let alone grow.
    I'm not referring to the guys that plow and make 30-100k a yr I'm talking about company that wants the contracts that pay in the millions each yr.
  16. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    I presume you would be responsible because you booked the job and took a %.
    Under what authority would you "get rid" of an association member.
    How do you choose the #1 sub vs #2 and how available is #4 gone to be when you call in a panic after #1 screwed up and #2 and 3 no show because of the magnitude of the storm.
    Growth, and advertising, I have been the only limit to my growth, maintaining a quality level is tough, I turn down as much work as I do. I never advertise and I focus on high end contracts. major corp. only want one thing the lowest price.
    Who's going to warehouse the equipment and supplies purchased with your Volume discounts? What would the assoc. do if members didn't meet the projected purchase amount the volume discount required? Back bill every body the end cost or purchase the additional required units and warehouse until needed? Would this mean we all would have to use the plow the assoc. got a discount on?

    Being a management company isn't a bad thing, it just isn't a loose conglomeration of like minded individuals. It is a organized group of marketing, sales, legal, and accounting personal, all whom expect a paycheck. What we would become is the subs
  17. justme-

    justme- 2000 Club Member
    Messages: 2,138

    Don't forget there have been polls on this ste before reguarding associations in our field, specifically SIMA and the concensys is SIMA is a waste of $$ (in a nice way). Percentage of board members that are SIMA members is minimal. Now, if a big organization like SIMA is not worthwhile for the majority of us to join..... If I remember correctly the benifits and group buying power ability was not reported as favoribly as it should be for an organization of it's size. Besides, outside of the industry who has ever heard of SIMA? To the industry they are a "necessity" to the general public they're a non entity- noone has ever heard of them. They don't advertise- the only advertising they get is in an ad a local plow contractor runs who happens to be SIMA and says so.

    The thing is many people may join for different reasons, but the mechanics of running it isn't in our intrest. You're essentially talking about starting a management company- companys need people running them. Most of us already have enough work managing our own companies and have no time or desire to run a management company in addition to our own business.

    Management companies get contracts because Corporate America micromanages, is decieved, or likes simplicity. There are no other reasons (bribes or friends/politics don't count) for it. I'll explain:
    CVS corp, for example uses a Snow Management company. The corporate offfice has the company contracted for their retail locations all over New England. The Management company hires subs to actually do the work, right? Now there is a possibility the CVS exec who deturmined the said management company was the way to go could have been looking at "We have 235 locations, that would mean 235 managers responsible for finding snow removal and potentially 235 problems with contractors, plus 235 different payees for services rendered. Snow management means one contact person for CVS and one payee."
    The Exec could have been been decieved into thinking the Snow Management company was actually a real service providing company that would be "personally" servicing the locations and signed a contract...Mistaking them for someone like The Middlesex Companies- a BIG contractor in the region.
    The Exec could have decided that the store managers are not smart enough to make good business decisions and hire plow companies on their own- as Walmart management operates, and many other companies which have gone out of business operated (Zayers, Ames, Trendlines, etc)

    It's the same problems for any business- you hit it on the head- but in order to be an effective entity our Association would have to BE a LIGITIMATE business- with contracts between clients and Subs to ensure the subs do the job and have the equipment necessary. People to handle collections of the clients payments and pay the Subs. Manage the business. If it's done loosely, "people belonging who want to belong" and not with binding agreements it WILL fall apart. Who wants to start that company is the question. And most of the contracts that pay in the millions are sold to the big companies- not the management companies but the big contractors. The guys who do nothing but State and City work under contract all summer. At least around here that's the way it is- I have only seen minimal Management company influence- mainly in CVS. Look up The Middlesex companies. These contractors are not interedtes in plowing Apartments, medium retail stores, residential accounts, etc. They're too big to consider it, that's where the little guys come in. Us, if we are competent business people.
    If I had more equipment I'd take several contracts for places locally (several would be easy to take from the poor service provided) from the contractors doing them now, but I havn't the cash to invest, use for the equipment the rest of the year, or the man power to run such an operation. The subs you would need for such a business would also have to be basically dedicated to that one account- I can't plow my customer route and maintain a retail store (for example) without expanding myself. Even if there are 4 other subs working the same lot with me. We all know the logistics of plowing.

    You don't have to be the biggest to survive let alone grow- in ANY market. You have to be responsible, reasonable, reliable, and intelligent to grow. If you're not growing in your market and you are the above, you're doing something wrong, OR you don't want to grow. Simple as that. If you needed to be the biggest I doubt any of us would be here. I am no way the biggest in my area- never will be. But I have been here for 8 years and counting, and had most of my customers since the beginning. This is the first year in 3 years I have advertised. Word of mouth is way more effective than advertising.
  18. DaveOhio

    DaveOhio Member
    Messages: 68

    Dirt: "I made more net for 1 truck in 75 than I can in 2005 and the equipment sure did not go down in cost."

    my comment: So sad, so true. Why aren't there more discussions about this simple fact?

    Bash: Atlas Shrugged

    Me: Are you sure you meant this book? Ayn has never been brought up on these boards before.

  19. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    Yes I meant Ann Rand's Atlas Shrugged Has nothing to do with plowing snow but everything to do with how we live our lives. When those who can and do are required to provide for those who can or will not. What happens when the capable retire the battlefield to the unwilling. Long, and often boring, it's a road map to what should never be. I've heard it called a attack on communism, on unions, on democrats, on the welfare system, but whatever else it maybe, it is definitely eye opening.
    I this instance i refer to the fact that those who (whom?) pursue the work and get the contracts then expect subs or employees to preform to expectations with out supervision are in for disappointment. If those people (subs and Employees) had that level of pro-activity and self motivation they would be competition not subservient.
    If they are too lazy to hustle for the contracts themselves, what would make you think they would do the actual work in a reliable and satisfactory manner.
  20. DaveOhio

    DaveOhio Member
    Messages: 68

    Well said.

    Who is John Galt?