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Minimum if it doesn't snow?

Discussion in 'Commercial Snow Removal' started by tbear, Sep 6, 2003.

  1. tbear

    tbear Junior Member
    from Waupaca
    Messages: 1

    How many of you guys have a minimum if it doesn't snow in a 30 day period. I have in my contract 1 plowing charged if it doesn't snow in the 30 day period. For the most part there is no problem with my customers, but there are a few who really questioned it. Am I doing anything wrong by doing this?
     
  2. beherit316

    beherit316 Banned
    Messages: 78

    The way I see it is your aying"ok, it didnt snow this month but i still want to be paid" I'm surprised any customer would agree to those terms.It's like you having a credit card and your credit card comapny says" Hey you didnt use your card all month but we are still gonna charge you".

    I just find it funny that someone would do that and a customer to agree upon that.
     
  3. easthavenplower

    easthavenplower Senior Member
    Messages: 282

    i dont do that but i know people who do nothing wrong with it if a custermer asks you why say its like a retainer fee lawyers do it and so do some credit cards however if your gonna do that you might as well have a seasonal contract
     
  4. beherit316

    beherit316 Banned
    Messages: 78

    I have heard of in the past that there are some plowing companies that would charge a set fee for the entire winter, whether it snows of not and still get paid.I think that would apply to big outfits and properties.Never knew nor met a company that did that but I have heard abotu it being down.
     
  5. John Allin

    John Allin PlowSite.com Addict
    Messages: 1,327

    If you think you can, or you think you can't.....

    You're right.
     
  6. micah79

    micah79 Senior Member
    Messages: 303

    Seasonal contracts are actually quite popular around here. Last year we had about half of our driveways choose a seasonal over the standard per plow pricing. I think a seasonal seems a little more ethical than charging for work not performed. I can see your side of it, but I'm not sure that many of my customers would buy into it This reminds me of cutting grass. I've heared pissed of customers complaining about lawn services that cut them when they don't need it. I know we need to make a living, but customers don't really care about that. They just seem to care about what we can do for them , and at what price. The seasonal contract may be the way to go. Last year it was nice having the seasonals because it was a light snow year.
     
  7. wyldman

    wyldman Member
    Messages: 3,265

    We pretty much only do seasonal contracts.You get paid if it snows or not.

    Charging a minimum,or for a push or two a month will also work.

    Do a search on this topic,it has been discussed in detail a lot.
     
  8. Mick

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

    Actually, it's pretty common among larger companies. Assures them of meeting expenses. Similar to seasonal contracts. Although not common around here, I actually do have seasonal contracts. I get so much money regardless of how much it snows. I collect in full at the beginning of the season. So technically if it didn't snow all winter, I still get paid. And I'm about as small a company as it gets.

    From the customer's perspective, they would be willing to pay a monthly rate to be assured they will be serviced when it does snow. So obviously you'd need a good reputation before charging something like that.
     
  9. Mick

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

    Ok, I thought about this a little more. What's the difference in charging $600 for a seasonal contract and $100 minimum a month for Oct to March? None. So, if you have a seasonal contract, should you give them back $100 for any 30 day period it doesn't snow?
     
  10. wyldman

    wyldman Member
    Messages: 3,265

    The only difference is that there is no cost control with the monthly minimums.You bill for the minimum,but bill more if it's a heavy month.

    With most seasonal,the prices are fixed,so the client gets a fixed figured to budget upon.
     
  11. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    It depends on the market and what you're asking. Transition snow areas that may or may not get snow may be more successful in getting retainer fees when there is little acceptance of seasonal work. As well, some may request the equivalent of two plowings while others may only request one.

    Regardless of what you're asking, you're identifying to the customer at the very least by putting forward the concept that regardless of whether or not it snows, the customer ought to understand that you have fixed costs regardless of snow fall and that to maintain the equipment on call for their property, you must cover some of your fixed costs.

    To expect a minimum charge per month to maintain equipment and labor readiness is not unreasonable and the worst thing that can happen is someone says no. You then decide whether or not you choose to work for them. If the market won't bear it than you may have a tougher sell. In those areas that get snow more predictably, then it may not even be necessary since the average suggests that you'll be generating revenue.
     
  12. Toby

    Toby Senior Member
    from NY
    Messages: 132

    Think of snow as being in the insurance business.
     
  13. Randy Scott

    Randy Scott Senior Member
    Messages: 142

    Toby and Lawn Lad nailed it. I don't know how some of you can run your snow business without some type of non-refundable fee. Maybe you are guaranteed snow in your areas more than other areas. All I know is, I'm not investing big money into equipment, insurance, and manpower to loose my shirt because it doesn't snow. If a customer expects this of you, you better run from them, and run quickly. Let them go purchase the equipment and get up at 3:00 in the morning to clear their drive.

    Deposits and monthly fees are just good business. Plan on "just getting by", or failing, without these if you don't charge them. Certainly don't look for any kind of business expansion.