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membership fee?

Discussion in 'Bidding & Estimating' started by shovelracer, Aug 27, 2008.

  1. shovelracer

    shovelracer Senior Member
    Messages: 525

    OK so here's a thought Ive been working on for a little while. For residential you basically can go 2 ways. Seasonal up front, or per push. This can leave the homeowner upset in a dry winter with seasonal and the contractor wishing he went seasonal with per push. The reasons for this are that the contractor has to lay out a wad of cash to get up for the year and hope that things go well. Theres more to it, but you all know that.

    So what if you have sort of a membership fee or the like. This would cover all startup expense and repairs, etc. The balance would be per push at a highly discounted rate to basically cover labor, fuel, supplies, and a little profit.

    I havent ran the numbers yet, but lets say you get 12 storm average. You want 50 per push. You need 300 at signing and each push is 25. If you go dry then you at least paid for the years expenses. If you go over 12 the homeowner gets a break, but you still get the additions paid for. Sounds like a better way to go, and I havent seen it yet. What does everyone think? Oh and it would be non refundable since clients are harder to replace after the start, but it would be transferable between owners of the same property.
     
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Sounds like what a guy was doing around here awhile ago ,charge for seasonal price and anything after 20 plows was extra.

    He's not plowing any more.
     
  3. Mick

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


    What are you selling "membership" to? What is this organization's purpose?

    I'm not getting the charges. You have determined that a push is worth $50, but you're charging $25? So now you'll plow any number of times for half of what the average was worth in the first place.Let's say you get a heavy winter and plow 20 times, which would be just over half again the average (happened here last winter). Now you'll plow for $15 that which was worth $50.

    I think you might apply for non-profit status.
     
  4. shovelracer

    shovelracer Senior Member
    Messages: 525

    Not really the same thing. We are talking something to the tune of half of what a seasonal would be. The rest per push. If its a dry winter they get a break if its heavy than the contractor still makes out ok.
     
  5. Mick

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

    Reading it again, maybe you're charging $300 PLUS $25 a push.

    Would YOU go for a deal like that?
     
  6. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    To me seasonal is seasonal and you plow until the season is over. Same as per push 1 time or 40 charge each time.

    People know around here it will snow so they have no problem paying for seasonal.If it don't snow they think it's great and they don't ask for their money back.
     
  7. shovelracer

    shovelracer Senior Member
    Messages: 525

    You lost me somewhere. The fee is to ensure that I get my expenses covered, and that I will limit my client base. If you go per push there is no reason not to take every account you come across because you need to make X and you dont know how much it will snow. If someone quits then just find another per push. With this you can say 20 accounts per truck, pay your fee up front to guarantee a spot. This fee covers nothing more than business costs. The amount charged per push after would be to cover the rest. Again the fee covers the fixed and known costs that are incurred regardless of snow amount. Im sure it needs some fine tuning, but is it really that bad of an idea?
     
  8. shovelracer

    shovelracer Senior Member
    Messages: 525

    My clients would. We arent talking double car drives here. They sure arent going to shovel. The only problem is the occasional $35 pusher. Most of my clients have been burned before or been number 68 on the list for one truck. They can be assured that they would have a spot in the same position, with a licensed, insured, professional company that wont go out of business if it goes dry or raise prices 30% if this year is dry.
     
  9. shovelracer

    shovelracer Senior Member
    Messages: 525

    price is irrelevant for this purpose. If you have 10 storm average and can get 30 per. Than you get 150 up front, 15 each push extra.
     
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Why not just set a seasonal price and bill 1/3 at signing 1/3 Jan 1st and 1/3 in Feb/Mar?
    This way you have money up front, a set list of drives
     
    Last edited: Aug 27, 2008
  11. toby4492

    toby4492 2000 Club Member
    Messages: 2,513

     
  12. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

     
  13. cet

    cet PlowSite Fanatic
    Messages: 7,202

    If I understand you correctly you want 50% of an average yearly bill up front. If it doesn't snow at all you get 50%. For every plow upto the average snowfalls for the year the customer is still loosing and for every plow over the average the customer is getting their driveway plowed for 1/2 price and you are loosing. I think this is the same as a seasonal contract with customers that stick around for many years. Some years you win and some they win and in the end all is even. Last year we took a beating her, some guys asked for extra because of the # of snowfalls and the smart customers simply said I didn't get a refund last year when it hardly snowed.
     
  14. grandview

    grandview PlowSite Fanatic
    Messages: 14,609


    That's about it .You win one ,lose one and even on another.
    in the long haul it cost less you less to keep customers then trying to find new ones every year. And your profit will go up because they will stay with you and will accept a price increase every year.
     
  15. shovelracer

    shovelracer Senior Member
    Messages: 525

    Yep that is about it. Thinking is that they have money before leaf cleanups and the holidays. So the rest of the season their monthly payments are less allowing them to recoup faster so they can give me money for mulch and what not. Realize even though people live in large houses doesnt mean they dont live check to check any different than anyone else.
     
  16. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    I have a bitter taste in my mouth over this idea because I was sued about it several years ago and won. But I still think it is a good deal.

    Sell 10 plowings at a time to your clients. Everyone is pretty sure that it will snow 10 times (or whatever your area gets on average)

    You get the money up front to cover your start up costs.

    If your average is 12. Customer buys 10 up front. Lets say it is a snowy year and less than midway they have used up the 10. You recommend they by 10 more. Or you say, lets go on a per push price. Either way, you have the money up front to cover your expenses and no one gets screwed on the amount of snow that comes.

    Your contract HAS to state that you decide when to come and push and there are no refunds for any amount left over at the end of the season.