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How much should a truck make plowing

Discussion in 'Commercial Snow Removal' started by yellowsnow, Dec 10, 2005.

  1. yellowsnow

    yellowsnow Junior Member
    from midwest
    Messages: 25

    So whats a gross average for a PU truck to make on a route. I have a relatively small snow route, 3 trucks, 2 w/plows, 1 for sidewalk crew. Start to finish on a 3" storm it takes about 7 hours and pays $2100, and then usually another $300-$400 to clean up stalls, and drive enterances. I've been in this for about 3 years, this job takes a lot of dedication to always be ready 24/7, making sure guys know what they are doing and do a good job. And then the constant upkeep and maitenance on equipment. I Just wanted to make sure I was in the ball park with my pricing, I'm making money but just dont want to leave any extra on the table.
  2. GSE

    GSE Senior Member
    Messages: 108

    Amen to that!

    Are you covering your costs? At the end of the day, do you have more $$ in your pocket than when you started? Not knowing your market or your costs, it's hard for me to tell how you're doing....
  3. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 27,868

    It should make however much you're happy making.

    By this I mean, if you're happy making $60 / hour, granted it's on the low end of most pay scales, but if you're happy, then that's all that matters.

    Personally, I do all contract rates, meaning I get paid a flat fee / month for 6 months.

    I gross out about $4k / month on a route that I can do in 15 hours.

    I base my rates on a yearly rate of 18 snowevents / year, so on average 3 / month.

    Basically I'm running about $80 / hour on average, including drive time, gas time, eating time, from the time I leave the house to the time I get back in the drive.

    For me, I'd rather be a little cheaper and know from year to year that I have the same accounts, with the same people that I know I'm going to get paid on the same day each month, since I cover all my living expenses this way.

    I don't have to worry about life getting in the way and looking for another job.

    Last year I plowed a total of 7 times the whole year, and grossed just under $300 / hour.

    I'm a solo op, so if I were to have to plow 22-25 times in a year, I'd really only be out the diesel, since I'm sitting around with a truck, insurance and a plow already, I don't have to worry about blowing out the budget with sub and / or employee wages.
  4. yellowsnow

    yellowsnow Junior Member
    from midwest
    Messages: 25

    I wish I could get people on a flat fee for a seasonal rate, believe me I have tried. Our winters are so unpredictable, for the last 5 years we havent had snow before x-mas. This year I was out on the 1st, 4th, 8th of Dec, and then once in Nov. I actually had one of my condos ask if they could get on the flat fee for the now that its looking like its going to be a busy winter, I kindly passed and let him know that offer has expired lol.
  5. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 27,868

    It's taken me 10 years to get it this way. I still have people that won't have me plow because they want to pay per hour / per push / per inch whatever.

    I had a church this year, that I gave a quote of $1890 for the season, $315 / month, flat fee, even including any pushing back of piles.

    Last year they paid $1070, but again, we only had 7 snow events all of last year, and didn't even have the first one until the first week of February.

    The year before, they paid $1855, and we had what I would deem somewhat of a light year, although much closer to average.

    It's usually easier to sell businesses on the idea, since they can set their budget for the year.
  6. JMR

    JMR Senior Member
    Messages: 567

    I have scaled back my operation this year. 2 trucks plowing 5-6 hours of plowing, 1 sidewalk person 5 hours of work.......averaging $2300+ per 2-3" snow. So far we have been out 3 times this season. We keep a backup truck and a person on call for bigger storms.
  7. ghosttridder

    ghosttridder Member
    Messages: 70

    well i'm new to this business, but i have been thinking about this since 2004. So this season i started. Since I am new, i have a 4x4 tacoma V6 with a western suburbanite snow plow also a salt spreader. I work for a town house association oganization and i tried getting quotes from other people, and let me tell you i've seen quotes from 48000 per season. Another quote was 900 for snow plowing 300 salting and 1200 for salting. My boss is one CHEAP mofo so i decided what the heck, i decided to enter the business. Now i signed up for 675 per occurance over 2" of snow. and i believe this is a steal deal for them because normal people charge like over 1200 bucks. I have to plow 5 courts about the size of 2 1/2 basketball courts. go figure, i wanted more money but i'm not a good negotiator.
  8. Jpocket

    Jpocket Senior Member
    Messages: 302

    So you underbid the other guys by almost 50%, will you be able to fix or replace equipment/truck when it breaks, because it WILL break.
  9. SLSNursery

    SLSNursery PlowSite.com Veteran
    Messages: 140

    Are you working to make a living or working to....

    In regards to the original question, I think you need to ask yourself whether you are working to make a living or working to enhance your life. What I mean, is you can work anywhere to put a weekly paycheck in your pocket, and if you own and operate a business with this in mind, you'll be able to do just that. You could work as an enhancement to your life. That is, if you really like what you do (not just the plowing, but the Whole package), why don't you set income levels (goals) that will allow you to continue living the way you want. This is of course easier said than done, and never works out perfectly. However, it does eliminate the grind of feeling like you aren't getting enough. My point is, that if you need to ask, then you aren't confident in what you are earning. You will probably make some money in the form of cash flow for a while, but you are in reality an independent contractor making a quick hit. Think about how you would feel if someone entered your main line of work part time, and charged a premium. It probably wouldn't bother you because they wouldn't affect you. Now think about that same person working for substantially less because they are just looking to pick up a few bucks. You might feel differently about them compared to your main line of work. Which guy do YOU want to be? Bear in mind, there is nothing wrong with being the one who wants to pick up a few bucks. And further more, personally I don't mind when folks offer services at a lower price than mine, even half. Those of us who make a living in this and related industries simply need to move away from customers who shop for the part-timer.

    Here is some food for though on a related concept regarding business and goals. I like to think of things like this: Are you an entreprenuer or a businessman? (There is no wrong answer). The businessman engages in a practice and makes money. Remember, if one guy makes $1 on $100,000 in revenue, and another makes $40,000 on $100,000 in revenue both are profitable, and this is a free market economy. The entreprenuer engages businessmen or employees in seeking profit. Sure, the entreprenuer may occasionally or regularly work IN the business, but surely it would run without him/her and certainly the entreprenuer would realize the profits. In my scheme, the businessman ends up being the lynch pin for operations, and often times ends up working as the employee. Don't confuse wages (which are paid for time and services) with profit, which would be realized after wages, and expenses.

    I come across a lot of businessmen who are making a living by working hard, but not really taking a profit, because after they pay themselves a fair wage there isn't much money left!!!! This audience can run a business however they like, and again, I don't discriminate, but there are some factors which might need to be considered and I will offer them as food for thought.

    New equipment - to replace your equipment (as jpocket mentioned and is quite correct) you will need to invest money. This money can only come from profit or debt. That is, in a normal business if you haven't set aside enough profit to purchase replacements, you will need to take a loan. If you do set the funds aside, as profit, you will need to pay taxes before you can spend the money, and then you will only be able to expense the depreciation. Proper evaluation of this (what I have simplified) analysis will show you how much profit you need on each dollar.

    What have you done to be able to adequately provide a customer with a lower price? I have to suspect that you evaluated your current truck payment, cash payment to some helpers, and some materials costs. This isn't really enough to sustain a business, quite frankly. Did you think about insurance or other overhead? I actually had a smaller contractor explain that he could take on a bigger place at less cost than me because I seemed to have more overhead. I agreed that I may have more overhead, in general - a shop, a big insurance policy, machines, trucks, etc. However, I could truly offer a lower price to the customer, because I've already purchased the trucks, I already have the loaders, I've already positioned (20+) employees. In a sense I am in a better position to run efficiently. BUT.....why would I want to pass that along to a customer? What does that do to help me or my employees, or my business plan. Sure it could put food on the table, but if you need food on the table, go do subcontracting work for somebody.

    Anyhow, I had a couple of minutes, so I though I would write out some thoughts. Look for my book in a few years (LOL).
  10. Mdirrigation

    Mdirrigation Senior Member
    Messages: 408

    Well you may make money or you may lose your butt. What are you going to do when your 1 truck goes down and you have to pay someone else to plow ? And that person will probably charge you more than you are charging the customer. Ok its a community and you wil plow over 2 in of snow , wait till you get an inch and a half and the people drive on it and it turns to ice , and then you get snow on top of that .

    Now you have a per occurance , is that per snowfall or plowing , if that isnt specific stated ,as a consumer I would assume per storm . So you now plow the travel lanes and think you are finished at 6 am when you get a phone call at noon to plow out the spaces after everyone has gone to work.

    There was a reason the other guys were higher
  11. ghosttridder

    ghosttridder Member
    Messages: 70

    you guys are right. I'm not denying that. If my truck breaks down, and/or the blade breaks, I'm not ready for replacing that equipment yet. This is the risk i'm taking. As for undercharging, my customers are indian and they are soo cheap which makes me mad, but i had no choice at this point, i guess you could call it a desperation move. So all I can say is I have my fingers crossed and hope the blade doesn't break any time soon.. like J was saying it will break.

    Also I know that everyone charges different, this may due to the fact that they have more experience, more equipment, maybe an office and a garage with vast equipment.. of which i have none of these. So they're are a lot of different variables here and unique situations. So I guess what i'm saying is that i'm starting small. Now how much should people like myself charge? how much are you guys charging if may ask?
  12. yellowsnow

    yellowsnow Junior Member
    from midwest
    Messages: 25

    SLSNursery thanks for the good response. You pretty answred my question. When it comes down to it I think I should raise my prices. Reason being is I have to keep insurance on all 3 trucks whether it snows or not, pay workers comp, and all the other freakin taxes I seem to pay every few months. My rates might be comparable to the solo guy with but he has a lot less overhead then me. We get lots of compliments on our work so hopefully they will remember the great work when prices go up next year.
  13. SnoFarmer

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

    You should charge whatever the market in your area will bear.
    What I'm saying is just because you have low overhead you should not sell your self short. If the market says a 2 acre lot will cost lets say $150 per push and you can do it for $75, way do it for $75 ( just because your boss is a cheep so-en-so) when you could make $150?
  14. Allagash

    Allagash Senior Member
    Messages: 159

    Sometimes the best business you do will be the business you don't do. In other words, don't be afraid to charge what you think you're worth or walk away from a potential customer that might be difficult. You'll learn through experience that working for too little will get you no-where and cheap customers are difficult to deal with.

    I'm in my second year of establishing an account list and have plenty of room for new clients. One thing I will not do, however, is drop my prices just to get a new account. I'd rather do fewer accounts at a higher rate and not feel rushed while plowing or have any animosity in my mind while plowing a particualar account.
  15. Terrascaping

    Terrascaping Junior Member
    from NJ
    Messages: 6

    Murphy's Law will kill you!

    If you are planning to get in to snow management services, you'd better plan for all the possible case scenarios. Always ask yourself:

    What is the worst it could be? What can go wrong? Do I have a backup/emergency plan?

    I have been in the landscape profession for 4 years and entered snow management in 2004-2005 season. This winter is actually our second season and ended it up with a good mix of customers and contract types. I am operating two truck with a 9' x-blade, a toro snowblower and 4 employees. After Friday's storm in the North East I learned, even though I knew it, that I need a back up vehicle which will be running during the storm but also available for emergencies. I also need a extra snowblower and a couple of extra employees for storms of 4" or more.

    Even though, I sucessfully managed a truck stuck for an hour and a plow breakdown for and additional 30 minutes; Friday's event taught me a lot of lessons and a lot of extra planning and implementation is happenning now.

    A missing clevis pin in the plow or a flat tire will make you go nuts at 3:00 am.

    Ed Correa
    Terra Landscaping
  16. farmertim

    farmertim Member
    Messages: 95

    how to figure your costs

    Ive been plowing for 9 years this year and i went through all the above mentioned ways to figure if your getting enough money for your efforts.
    the simple way i found is to take your costs times three.
    it is the way that resturants figure out how to charge for a meal.
    but the variable in this is your area and the costs of competetion.
    But remember there are resturants and there is Mcdonalds...which scale are you on.
    costs are more than fuel and your ass in a truck for an extended peroiod of time, yearly cost of repairs, truck payments insurance ect. and a percentage of income for those expenses which cannot be accounted for before they happen usually 10 % of expected income.
    Hope that helps...good luck
  17. ghosttridder

    ghosttridder Member
    Messages: 70

    Yeah, what you guys are inputting makes a lot of sense. I guess weighing out earned revenue and expenses, earned net income profit should be more than 10% or more...

    i'm thinking about dropping these people who required me to do their lots because of many many reasons i can't begin to explain. Just briefly their organization is unorganized, none of the 9 board members can agree about certain agendas and various points, non of them have experience in business management field and all of them argue and flip flop on their own decisions.. that's just to begin with. I guess I have to get myself professional opportunities.
  18. QuadRacer041

    QuadRacer041 Senior Member
    Messages: 140

    this past storm we had about 6-9", the snow varyed from town to town.anyway it took me 8 hours for me to do my entire route by myself and i made close to $2000.i also own a landscaping bussiness and i get much more per hour plowing snow then i do for landscaping. i try to get $150-175 per hour for plowing.
  19. GSE

    GSE Senior Member
    Messages: 108

    Do yourself a favor, go talk with some established Winter Management contractors in your area and see if you can get your feet wet doing some subcontract work. There's so much to this industry, it might be worth while to test the waters first before you commit yourself. To do it right, you're taking on a 24x7 responsibility. There's more to it than buying a truck and plowing snow.....
  20. ghosttridder

    ghosttridder Member
    Messages: 70

    Thanks GSE, speaking of managment contractors, I'm actually meeting up with a contractor to see if i can join them, Supposedly this winter is going to be huge, i'm speaking in terms of snow fall.. so i hear.. so i have a lot at stake in terms of the money invested..