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Just starting - How many residential driveways?

Discussion in 'Introduce Yourself to the Community' started by Dougman, Dec 2, 2006.

  1. Dougman

    Dougman Member
    from MA
    Messages: 83

    I'm located in Southeastern Massachusetts and this is my first year plowing with a new Chevy 2500HD 4x4 work truck and new plow. My other work is three season so plowing is about it for the winter months. In other words, no worries re: conflict with another job.

    My insurance and lack of ice treatment capability will not allow commercial contracts at this time. How many residential driveways in a single large town... high and low-priority... is it reasonable for one owner-operated truck & plow to have under contract. I do have back-up provided by another truck and driver when absolutely necessary.

    If it matters, my pricing is currently full agreed price on a 3-4" per-push basis with a 3-push price cap per storm, although this is under reconsideration (see my other post). After storm clean-ups are provided free and I do allow clients to opt out without penalty for any storm with advance notice. I also accept per-storm calls.

    Thanks in advance for any and all input.

    Dougman
     
  2. mark m

    mark m Junior Member
    Messages: 25

    doug i also just do residentials. I have 20 clients and with the snow in upper mi. thats all i can handle. I also do porches and after snow clean up for free.
    Hope this helps. LET IT SNOW. :yow!: :yow!: :yow!: :yow!:
     
  3. Dougman

    Dougman Member
    from MA
    Messages: 83

    Thanks Mark. May I ask: How many are high priority "must be clear by 7AM"... and how many are lower-priority discounted/retired folks/etc.?

    Also, if you weren't doing outside truck work, do you think you would/could take on more contract customers? Or doesn't that extra work slow you down much?

    Thanks again!

    Dougman
     
  4. BJH Snow

    BJH Snow Senior Member
    Messages: 142

    Dougman,

    I have 28 contracted residential, 8 residential when they call me, 2 smaller commercial lots and 1 3 acre commercial lot that I do when it snows. They are quite a hand full but I can usually get them done in about 10 hours. My large commercial lot is the only one that has time restrictions for me the rest I can do at my leisure. I do charge though if I have to go back for clean ups after the storm. If I am in the area I may stop by and clean up quick at no charge though.
     
  5. Dougman

    Dougman Member
    from MA
    Messages: 83

    Wow! :eek: That is quite a load. But with no time pressure (How did that happen???) I can start to see where it is workable. Clearly, you must have a very different kind of customer and price structure than is common around here. You must be very, very good... and those 10th hour customers must have a lot of patience!!! :sleeping:

    Here is my predicament: Folks around here expect to be plowed out every 3-4 inches so they can essentially get out of their driveways at any point. For a typical medium to heavy storm, that can mean three or more passes per driveway within 24 hours. Since 3-4 inches will often fall in 3-4 hours, I must make a full round in that period of time or less... or maybe a little longer at night.

    With just one truck/plow, I am basing my priority customer load on a 5-hour turnaround. Given traffic, distances and other realities, I am allowing 20 minutes per customer per pass. That means taking on only 15 priority customers... and that is barely enough for me to support my new equipment, insurance and operating costs... and have any money left over for me.

    In other words, my priority customers are covering my fixed and variable operating costs and all my profit will need to come from on-call and low-priority customers. The benchmark "per pass" rate around here is surprisingly low... and most potential customers want big discounts (or free!) on second and third passes. I'm almost to the point of dumping the idea of priority contract snowplowing for other (non-plowing) work and just using the truck and plow for low-priority and non-contract work. I suppose my other option is getting a salter/sander and turning to commercial.

    What am I doing wrong here? What are the flaws in my plan? Or is this predicament not unusual when starting out with residential snowplowing?

    Dougman
     
  6. carcrz

    carcrz Senior Member
    Messages: 295

    I think you might be hurting yourself by having too many priority customers that require 3-4" or less at any given time. My priority customers get first push & that's what makes them priority. I then move on to my other customers & make my rounds again as needed. I always make sure the regular guys don't go more than a day w/o being pushed @ least once. If they call, I always let them know that I will be there as soon as I can, but I do have a route to stick to. No complaints yet.
     
  7. Dougman

    Dougman Member
    from MA
    Messages: 83

    This all makes good sense... a very practical approach. I think my problems are a combination of several factors. I am brand new to the business and mostly getting calls from folks who want me to beat the price of their current service provider or folks who were dumped by their previous provider for "God-only knows" what reasons. Secondly, the local benchmark price is being set very low this year by some folks who have got to be doing this with "long-paid-for" equipment and primarily as a hobby. For the money they're asking, I should almost have them come and do my own driveway! Thirdly, I live in a town full of two working parent families who are mostly early risers and automobile commuters. Not nearly enough retired folks around here to plow out on a lower-priority basis. Lastly, I am dealing with all-new equipment costs and yet I still need to secure backup as a one-person operation.

    I sense it will all work out eventually, but I think this first year is going to be very tough.

    Dougman
     
  8. carcrz

    carcrz Senior Member
    Messages: 295

    Don't get discouraged. You might talk to your insurance agent & see what it would cost to get into the commercial stuff. Try to get some large wide open properties. My first parking lot was my church. I had been talking to our maintenance manager for a couple months about starting up. On one of the conversations, I asked if he had a copy of the contract that I could see, and he said "sure, no problem!" I thought it was a little low, but I figured that being a church where I knew the people there, I thought I could also pick up some new customers. It turned out that I could get it done faster than I thought I could & I also picked up quite a few of the members that live close by.
     
  9. Dougman

    Dougman Member
    from MA
    Messages: 83

    Thanks for the input. I've already talked to the insurance company about going commercial. My insurance would be more than 2-1/2 times what I am paying now. I benefit now from a spotless driving record and a multiple vehicle discount. That all goes away once I go fully commercial.

    But the bigger issue is that I would have to buy, store, mount and feed a salter/sander... and I am not allowed to do any of that on my current residential zoned property. The cost of securing a separate business property would be prohibitive at this point. It might come in time, but no way in time for this winter.

    Like I said, maybe I am better off for now obtaining other work in lieu of the priority plowing contracts and use the plow & truck strictly on a non-contract and/or low-priority basis without backup until things start to come together.

    Dougman
     
  10. Rickco

    Rickco Member
    Messages: 89

    I would stick to your current customers,if thats all you can do. Then try to get more customers closer together. As you get these you can drop single Accounts that are the furthest drive for you. You will make much more if you dont have to drive a lot to do one here and there. Group them as close as you can and you'll be much better off. You make $00.00 driving from one to the other. I hope this helps you and good luck.
     
  11. mark m

    mark m Junior Member
    Messages: 25

    doug i have 8 cust. that have to be done by 7:eek:o am.
    it does not take much time to clean a porch
    good luck mark:redbounce
     
  12. Plowfast9957

    Plowfast9957 Senior Member
    Messages: 280

    Hey doug, if you feel that you are really limiting yourself that much by not having a sander why not sub it out. There are a few guys in my area that have trucks that just sand/salt. I have 2 small lots, 1 that is about 2 acres, and 30 residentials with 1 truck. Since you are new it will take a lot longer for you to do a driveway until you get used to it. I do not give a time gurantee to any residential customers. If they have a request I tell them I will do my best, and i usually make it, but there is no gurantee.
     
  13. Dougman

    Dougman Member
    from MA
    Messages: 83

    I'll look into that sand/salt subbing thing, but it's still tough to financially justify the full commercial insurance policy without that sand/salt income (assuming I have to actually pay the sub! :D But you raise a good point on the time factor and how it should improve and allow more customers as I gain experience and tighten up my route. Since rates are low and probably not going to increase, only more customers will put me in the black.

    I don't mean to sound discouraged here. To the contrary, I am quite excited and anxious to put aside all the financial details & analysis and to get going with the actual work! I sure hope we have a snowy winter! :waving:

    Dougman
     
  14. BJH Snow

    BJH Snow Senior Member
    Messages: 142

    Dougman,

    How did I manage to line up my accounts without time constraints? Their contract clearly states that I will be there within 24 hours of the end of the snow fall. I don't go out until I have 2" sitting on my driveway (except for the 3 acre parking lot I have to go out at 1") If they call me and need to get out I will usually be there within 2 hours. In addition, 6 of the residential contract are for seniors who move south over the winter months and no-one actually lives at the house. I have to make it look like it is lived in. In regards to my pricing, I do it by the driveway not by the push. most of the driveways I have are 1 to 2 car drives and about 50-75' . They don't take very long to do, usually about 5 minutes most are within blocks of eachother.


    "What am I doing wrong here? What are the flaws in my plan? Or is this predicament not unusual when starting out with residential snowplowing?"

    I don't think you are doing anything wrong. Or you have any flaws in your plan. You went out, got customers and are ready to work. As the season goes on you will find things get easier and you will learn some valuable information. Remember to keep notes so that you can look back at them as you plan for next year. My 1st year plowing, I started with 8 residential and picked up the occasional driveway. Although I didn't make much money, I learned quite a bit and came up with ideas to increase my business for the next year. This is not a full time job for me. I couldn't live off the snowfalls (at least not the last few years), but I can afford to purchase new tools and toys throughout the year.

    Good Luck

    BJH Snow
     
  15. Dougman

    Dougman Member
    from MA
    Messages: 83

    Thanks for the info. The theme in all these responses is clear. You guys have the experience, have chosen your customers wisely, know how to deal with your customers and have figured out how to make this all work logistically and economically. Now that my business start-up and equipment issues are all out of the way, I am mostly focused on the economics and contractual side... probably a bad thing... at least until the first snow falls and the work actually begins.

    The calls are certainly coming in off my ad, but seemingly from all the wrong people... i.e., extreme bargain hunters who would cut your throat for a dollar, folks who have been dumped for probably very good reasons, folks with severe problem driveways, over-demanding folks whose expectations weren't being met by their current provider... but very few folks that live nearby with normal driveways, reasonable price expectations and modest demands.

    Quick illustrative story: My highly experienced "back-up" and "mentor" in all this doesn't advertise at all... but yesterday he picked up two new top-shelf clients on word-of-mouth at full, non-discounted, per-push price... in a market that's flooded with low-ballers. Meanwhile, I am busy trying to figure out how I am going to make my truck and insurance payments on heavily-discounted, high-demand, problematic clients!

    Once again, I'm sure it's a first year thing... an indoctrination... a rite of passage. I can't wait for the day when all this starts to make good practical & economic sense! :waving:

    Dougman