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Old Timers: You think people will switch to per push?

Discussion in 'Commercial Snow Removal' started by MickiRig1, Jan 14, 2006.

  1. MickiRig1

    MickiRig1 PlowSite Veteran
    Messages: 3,617

    Old Timers in the business:
    Have you had experience with slow winters that prompt customers to switch to per push after they were on seasonal contracts?
    With the way this season's going I wondered if this has happened in the past when we have had very little snow.
    Maybe this would help people prepare for old and new customer concerns when they negotiate new contracts later this year.
     
  2. Yaz

    Yaz PlowSite.com Addict
    from NH
    Messages: 1,061

    I still do "per push"... Hey I'm not old! lol
     
  3. MickiRig1

    MickiRig1 PlowSite Veteran
    Messages: 3,617

    I say Old Timers because they have been doing it for a long time.
    They may of seen this happen before where it was really no winter for one year.
     
  4. ECS

    ECS Senior Member
    Messages: 485

    Out here, everyone is per push.
     
  5. larryjlk

    larryjlk Member
    Messages: 66

    i plowed seasonal contracts for 10 years. This year i changed all my residential contracts to per push. I lost some customers and got some new ones but after last year's winter it turned out that I was plowing driveways for $4.00 a push I decided I was better off not plowing at all than plow for that amount. What with the cost of gas and maintenance and upkeep on the truck and the plow and insurance it just wasn't worth it. Interesting how people's phone calls have changed. If I got a call last year it was "where are you" and this year it seems to be 'why did you plow? it wasn't 3" yet and besides it was gonna warm up in few days and melt away" Guess you can't keep everyone happy, but atleast I'm happier and that's what counts.
     
  6. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    For seasonsl contracts never had a problem with them wanting to switch.Depending on how much snow we had,if it was a lot of snow i try to get them renew right away while its still fresh in their mines how bad if was.If it was a lite snow i'll wait so they forget about it.
     
  7. dirtwork

    dirtwork Member
    from ohio
    Messages: 39

    The most profitable way for me is almost always per push. I try to keep about 20% of my business by the season, so i will have some income during a light winter.
     
  8. dumper

    dumper Junior Member
    Messages: 28

    Old Timers opinion

    Since you asked for opinions, heres mine:

    The ONLY fair way to everyone (talking commercil, industrial or municipal, not residential), is by the hour. Been plowing for almost 40 years, have tried everything, and I believe it is the only way to go.

    My contracts specify equipment size and price, plus a eight hour minimum. Of course, jobs are larger than most, so the equipment is always there the minimum hours, and the customer gets what they pay for.

    My employees, my customers and most of all I am happy to do it this way.

    When we work, I get paid. If no snow, we're doing construction work, so why hassle with set prices, triggers, etc????
     
  9. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    This year we are totally seasonal contract commercial. Some pre-pay some equal monthly payments.Only extra is moving snow around afterwards on their request, (small lots no snow piling space) One residential old couple that call during or after the snowfall to get put on the back of the list. (only 3 minutes from here and on the way to town). Commercial contracts consider it like insurance policies. They all have budgets. If our price fits their budget we are in. As long as they can use the lot when they need it. Snowfalls, timings, and depths are our problem.
     
  10. Antnee77

    Antnee77 PlowSite.com Addict
    from RI
    Messages: 1,056

    I've never had any seasonal contracts, but after this season, I wish I did. I bill all my accounts per push.
     
  11. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    Dirtwork probably has the best idea. We started out that way with a balance but over the years more and more want quotes per season. On the other hand once you have them on contract they tend to stay around through the highs and lows. The game is to have enough financial depth to make through the lean and bank it up over the good. YOU give them a stable price and THEY will give stable work. Just make sure your pricing is correct over the long term average
     
  12. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 27,994


    No offense, but if you were plowing for $4 / driveway on a seasonal contract, you're correct, you shouldn't be doing seasonal contracts, your prices were way too low.

    I'm not saying that's your fault at all, I'm sure that's what your market is bringing in your area.

    As for me, I only bid commercial accounts.

    The reason behind this is then the manager / owner can set up a budget. If I come in with a flat fee for the winter, they know their bill for the winter.

    They don't have to say "hope we can get away with $5k", they can look at the bill and say "we've got to pay $5,250 this winter".

    The deal with seasonals, you've GOT to sell them as a budget item. Where people, whether businesses or residential yards can look at a winter's worth of work and know what their bill is going to be.

    Even if it's more than what they were paying hourly, most people don't want to take the gamble if you sit down and talk with them about it.
     
  13. fernalddude

    fernalddude PlowSite.com Addict
    Messages: 1,105

    hour only here

    25 years of this and i have only charged by the hour. No snow no pay but snow you pay me lots some seasons are good some bad. This is not the quick buck line of work for the pro's.:salute:
     
  14. 06HD BOSS

    06HD BOSS 2000 Club Member
    Messages: 2,611

    Everyone ive ever known has done it like this:
    Commercial- Contract based on equipment, man hours & amount of snow.
    Residential- Per storm based on amount of snow.
    Keeps everyone happy because businesses know in advance their minimum per month to budget and the homeowner wont get screwed out of money if it doesnt snow. Theres only 1 homeowner ive worked for that has asked to pay seasonally, all upfront in October (based on a 5month winter, 4 storms a month)
     
    Last edited: Jan 16, 2006
  15. DESTEFANO3782

    DESTEFANO3782 Senior Member
    Messages: 179

    If Seasonal Contracts Decide To Switch To Per Push Next Year And We Get Another Winter Like Last They Will Drop Their Drows And Loose Hand Over Fist. If They Stay Seasonal, Yes Its A Gamble How The Snow Will Fall But Chances Are It Will Equal Out For Both Of Us. If We Get Alot This Year We The Contractor Wont Make As Much, But If We Have A Year Like This We Make Money And It Next Year Is Average We Both Are Equal. I Think Big Businesses Understand The Happy Meadium.
     
  16. LwnmwrMan22

    LwnmwrMan22 PlowSite Fanatic
    Messages: 27,994

    Just to follow up, last year, when I plowed 7 times, I averaged just under $300 / hour with my seasonal contracts.

    If I were to have to plow 20 times in a year, I'd average about $60 / hour.

    I know $60 / hour isn't going to get me rich, however I DO have enough contracts to pay all my bills AT the $60 / hour range, meaning house, 2 newer trucks and a new (mini)van :help: gotta love having little kids :blush2:

    Plus the 43 hp tractor, the mower payments, the everything else payments, so even if I had to go out and plow the extra times, I still get my payments made.

    I try to average between $80 and $120 / hour when I base my bids on the contracts.
     
  17. heather lawn spray

    heather lawn spray PlowSite.com Addict
    Messages: 1,206

    What engine?
     
  18. Tommy10plows

    Tommy10plows Senior Member
    Messages: 345

    Old timer here

    I do some by the season price, about seven residentials go that way. The reason is I use that money for my seasonal start up costs, to update my equipment, pay insurance, etc. so that I go into the season with good equipment.

    Waiting to get paid for what amounts to my overhead doesn't happen when you have some seasonals. It works out well for me but to each their own.

    PS, seasonal pre-pays are taxable income when you receive the money, in that calendar year.
     
  19. cet

    cet PlowSite Fanatic
    Messages: 7,202

    I have only ever had seasonal contracts for houses. I have had very few people question it. It is funny because on bad years I have had people give my extra but very few have ever comented on how easy we had it. I have explained it before as insurance. You pay for car insurance all year. At the end of the year when yoou haven't had a claim do you feel riped off? Snow plowing is cheap in my mind for a seasonal contract. A couple of heavy snowfalls and you get your money worth.
     
  20. Tommy10plows

    Tommy10plows Senior Member
    Messages: 345

    Old timer here

    I do some by the season price, about seven residentials go that way. The reason is I use that money for my seasonal start up costs, to update my equipment, pay insurance, etc. so that I go into the season with good equipment.

    Waiting to get paid for what amounts to my overhead doesn't happen when you have some seasonals. It works out well for me but to each their own.

    PS, seasonal pre-pays are taxable income when you receive the money, in that calendar year.