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Is this a good contract deal?

Discussion in 'Business Fundamentals' started by gmack616, Nov 24, 2004.

  1. gmack616

    gmack616 Member
    Messages: 37

    well, i've been calling around trying to get business for this winter and i decided to call my own home owners association. when i explained the purpose of my call they told me they already have provisions for snow removal through the landscaping company they use for the rest of the year. i told the manager i am a resident of the community and i would be able to provide prompt service b/c i am already here and that i have good relationships with alot of people in the community. as soon as they heard this they gave me the job! all they said i would have to do is be willing to match what they would be paying already which is $2500 for the entire season which will be paid on dec 31 of this year.

    so naturally i agreed, the community is approximatly 3 miles and i would have to keep the streets clear wether it snows 0 times or 100, either way ill get paid the same amount. we usually recieve about 5-10 snow accumulations, so i should be all set.

    additionally, as i plow up and down the street, with my signage on the truck, i plan to try to get business from the homes i pass! this seems like a good deal to me. what do ya'll think?
     
    Last edited: Nov 24, 2004
  2. Midwest BuildIt Inc

    Midwest BuildIt Inc PlowSite.com Addict
    Messages: 1,280

    so all you have to do is keep a 3 mile steet cleaned right??
     
  3. Young Pup

    Young Pup PlowSite Fanatic
    Messages: 5,491

    Do you need to do salting as well? Sounds like you might not be getting enough money. Just my .02 though.
     
  4. DJL

    DJL Senior Member
    Messages: 343

    Salting and/or sand applications? Sidewalks? Driveways? Or is it just a two lane, 20' by 3 mile stretch. $2500 over 8 storms gives you ~310 a storm. Well I'll average two trips per storm or 155 per visit. Assuming all you do is plow a street that should take you 1.5 hours at most (big assumption here), that yields about 100 an hour. That is a good start. Assume 15 storms, or 5 ever month over three months and again two visits per storm. You will be losing money, IMO.

    I hope, for your sake, its just a 3 mile stretch, straight, no parked cars, no walks, no salting, etc.
     
  5. gmack616

    gmack616 Member
    Messages: 37

    thats right, its actually 3 streets which are about 1 mile long each with single family homes alongside them. its just plowing... no salt/sand. no sidewalks or shoveling. i have been living here almost all of my life and we've never had 15storms. we average 5-8 over 3months, with only about 2 of them having large (over 8") accumulations.
     
  6. Midwest BuildIt Inc

    Midwest BuildIt Inc PlowSite.com Addict
    Messages: 1,280

    I cant see it taking any longer than an hour to clear these roads.. in my opinion its a great contract... at 2500 dollars , you get 8 storms, you plow twice each storm, thats $ 156 an hour..even at 10 storms twice per storm it still $125 an hour. I could be wrong but this is how i see it...
     
  7. gmack616

    gmack616 Member
    Messages: 37

    yeah, thanks for the input. im excited... now that i landed this deal. i dont know if i want it to snow at all or not.. haha. but it does seem a little warmer than it normally is this time of year. i wonder if thats in indication its gonna get rrrreal cold or if its gonna be a mild winter.
     
  8. Young Pup

    Young Pup PlowSite Fanatic
    Messages: 5,491


    Then I am going to take back my original post about not being enough money. No Salting or sanding just plowing then you should be ok.

    Question what equipment do you have to do this with?
     
  9. plowed

    plowed Senior Member
    Messages: 344

    Question gmack, do you have insurance for this type of work? Not a bash, just curious...I'm sure you thought about it, but you'll need to line up a backup in case you can't plow for some reason.

    Also, in your contract with them, make sure it expressly says that you are not responsible for salt/sand. Do they contract sanding out to someone else, or do they just no do it? What happens in an rain/ice/freezing rain situation?

    Sounds reasonable if you have all your bases covered. Good Luck.

    What's more convenient than that!
     
  10. gmack616

    gmack616 Member
    Messages: 37

    i dont have insurance yet, but i will be getting it before the first storm.
    salt and sand has never been addressed in my neighborhood, its a residential community and only the main roads are salted around here.

    as far as a sub goes, i have a couple guys i can ask to cover for me if im broken down.
     
  11. plowed

    plowed Senior Member
    Messages: 344

    Good to hear you have it covered. I would be concerned about the no salt deal though. Make sure you word it in the contract that you are not liable for any ice related incidents. Have an indemnity clause, hold harmless, etc. The last thing you want is to get sued because someones car ran off the road because it was covered in ice and now they're ocming after you because you're the one maintaining the road.

    Regarding the subs, I would follow-up with them before each storm to have them on stand-by. You never know when something's gonna happen and you need them there asap.

    Also keep the phone number of a wrecker service close by in case you get stuck. In a large storm, it can happen quickly. I'm not trying to school you, I'm sure you know what you're doing, just speaking from experience.
     
    Last edited: Nov 24, 2004
  12. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    $2500 for three miles in VA? I'd say it's a pretty good deal, especially being that you live on the road. Now you just need some of those individual driveways and you'll be set. Insurance is going to take a pretty big bite out of that $2500, but resist the temptation to "let it go" even if they don't require it. Just get some more work - you've got a good start.
     
  13. gmack616

    gmack616 Member
    Messages: 37

    nah, i dont consider your advice as harmful, i appreciate all the advice, i have never done this before and hope to be sucessful! in fact, i didnt even know that someone could possibly even hold me at fault for them driving off the road in an inch of ice. lol. i will definetly make sure it is spelled out.
     
  14. DJL

    DJL Senior Member
    Messages: 343

    I stand corrected about a low price. Seems you gotten yourself a pretty good price. Remember the hourly wage doesn't include fuel, mainteance, equipment costs, phone bills, insurance, and taxes.

    Seems like you have put a good amount of thought into this and I believe that goes a LONG way. I'm assuming you are just getting into this business, my advice would be to go the extra mile on this one. Those residents will see this and that will be your best bet for landing more customers. And these customers will make it a nice profit for ya since you are already there.
     
  15. gmack616

    gmack616 Member
    Messages: 37

    i have an 02 silverado 1500 4wd and i am getting a blizzard 760lt installed in about a week.
     
  16. Young Pup

    Young Pup PlowSite Fanatic
    Messages: 5,491

    I am sorry after I posted that question I remember one of your other posts with this information in it. Sounds like a great deal after all. Good luck and hope you have a good winter over there.
     
  17. detailman

    detailman Junior Member
    from Va
    Messages: 14

    gmack where you at in virginia just starting this year also in va too.
     
  18. gmack616

    gmack616 Member
    Messages: 37


    thanks alot YOUNG PUP, hope you have a great winter too. im am getting a little scared though. its 60 degrees out here right now, that is just so unordinarily warm for this time of the year around here. forecast for the next 2 weeks is in the 50s. im not too worried though. we typically get most of our snow in jan and feb.

    take care!
     
  19. gmack616

    gmack616 Member
    Messages: 37

    hey detailman. im in northern va. about 20minutes south of D.C.
     
  20. landstroker51

    landstroker51 Banned
    Messages: 22

    would'nt he have to plow all of the driveways if this in a subdivision???