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New to Pricing. Need some HELP.

Discussion in 'Introduce Yourself to the Community' started by merrimacmill, Nov 26, 2007.

  1. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,822

    Hey, we're a property management company and have been doing the plowing at all our own properties for quite a number of years now. I've started to get requests over the last couple years from people I know and their friends and so on to plow for them. So this year we are tossing around the idea of getting contracts, weather it be commercial or residential, to plow for since we have enough equipment and employees to get into this.

    I understand it is late in the year to get a serious route in line, but I would like to start to plan mostly for next year and in the chance that we get a few people this year. We have the proper insurance in place for doing this. And snow plowing would NOT be our only source of income over the winter. So this is why I am trying to fuiger out which method of billing would be best for us.

    From reading on this site the ones that I know of are...

    Per Inch trigger (however many inches it may be)
    Seasonal Contracts
    Per Hour (min 1 hour)

    My questions on these different methods of billing are...

    Seasonal contracts- This seems like a harder service to sell, especially in residential contracts, is this true? Were this is not our primary income, is this not a good option for us?

    Per Hour- We once had a plow guy many years back who charged by the hour to plow. He had a minimum of 1 hour each time he showed up no matter how long he was there. So he would show up for 15 minutes and charge for 1 hour and do this about 7 times in one storm to keep our lots open. So by the end of a big storm I imagine he would book 40 hours of work between all of his clients in a 24 hour storm. Is this a common thing to do? If so what is the average per hour rate in Northeastern, MA?


    Thanks for any help on this,

    Collin
     
  2. mmplowing

    mmplowing Member
    Messages: 56

    It is going to make a huge difference if you are talking residential or commercial. Commercials most likely have their plowers setup so I would think the easiest to break into this season would be some residentials. That being said, here is how we do our pricing.

    We do per push for residentials. We try to only go to each resi once per storm when under six inches and so we just charge say $45 for the driveway. If its a bigger storm that requires more then one push, the second push is just $35. This way we are upfront about our costs and no one has to get out there with a ruler measuring to see if its 1 inch or 2 and are you measuring a drift and so on.

    For commercial we offer per push and seasonal. With the winters we have been having here most are going for per push as they figure they can make it cheaper that way. This is fine with me because then I am getting paid for when I am actually there and not risking losing money on a big season. For this we figure out how long the lot is going to take us and then charge $125 an hour or so depending on conditions.

    Good luck this season.
     
  3. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,822

    Sounds good. About what size is a $45 driveway? Like an average driveway taking about 10 minutes or so? Is that your minimum amount or just a rough number used as an example? Just wondering since we are in about the same part of the country.

    Thanks for the response, It helped me out a lot

    Collin
     
  4. mmplowing

    mmplowing Member
    Messages: 56

    Collin,

    Just realizing you are in Newburyport....I grew up in Rowley and my parents are still located there so I know the area well actually. Well the way I figure it is if I want to make $125 an hour and a driveway is going to take me 20 minutes then it means I can do 3 in an hour and 125/3= $42 for the driveway.

    Now, what you need to make in an hour will be different then what I need to make. Take into account your equipment payments, plowing insurance, business insurance, any advertising, fuel and so on.
     
  5. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,822

    Right now when it snows we spend money on paying our employees to run our equipment, fuel, ice melt, and so on just to keep our lot open to our tenants. Since we only have two parking lots, totalling about 25,000 square feet, we have plenty of extra time in the day (or night) to plow other accounts. Because of this we would like to use the time to take on other accounts and turn this money going out when it snows into money comming in when it snows.

    So if I fuiger the amount we spend on insurance during the winter months, average rate of fuel consumption per hour, employee pay while plowing, and so on I would get our baseline, required, per hour rate. It would obvestuly go up from there to take into account profit to make all of this worth it.
    I don't want to lowball to get customers so what is the average per hour rate around these parts?
    The more I read on plowsite.com, it seems that $100 to $125 an hour are the most common numbers I hear. I never knew it was this much. With tt includhat $125 an hour, does that include ice control? Or just plowing?

    I can understand not having a minimum time for driveways as some can take a couple minutes and others can take 20 minutes. But is it common to have a minimum of 1 hour paid per push. So if I showed up to a commercial lot and plowed it at a (lets say) 6" trigger for 20 minutes during a snow storm to keep it open and charged the minimum time of 1 hour for that push, is that common? (I'm referring to what one plow guy we had way back did.)

    Thanks for all the help on this
     
  6. eshskis

    eshskis Senior Member
    from 4
    Messages: 138


    Collin I mean no disrespect but you should already know how to price. you are a property management company, or did I miss read?
     
  7. mycirus

    mycirus Senior Member
    from Mass
    Messages: 589

    Price how you feel is right. I do my driveways for a set price (25-65) per storm, with 10 dollars more if we get over 6 inches. If I go 2 times its the same price. My customers love my service and I am making good money and it all works out. You just have to see what you need to make.

    Bruce
     
  8. 4u2nv

    4u2nv Member
    Messages: 78

    I think he has probably figured out his pricing problem by now.... considering the last post was in November...

    of 2007...:gunsfiring:
     
  9. Burkartsplow

    Burkartsplow PlowSite Veteran
    Messages: 3,245

    where have these guys been
    .colin figured it out. you should see his equipment...
     
  10. eshskis

    eshskis Senior Member
    from 4
    Messages: 138

    Note to self.... read posting dates....
     
  11. KGRlandscapeing

    KGRlandscapeing 2000 Club Member
    Messages: 2,660

    sometimes we get alittle bored so stiring the pot with past post isnt so horrible