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Per push, per hour...???

Discussion in 'Commercial Snow Removal' started by SIMONE'S LAWNS SERVICE, Jan 24, 2003.

  1. SIMONE'S LAWNS SERVICE

    SIMONE'S LAWNS SERVICE Member
    Messages: 63

    I'm still fairly new to plowing and have a lot to learn, but maybe you guys can educate me on a certain subject. I see very few people mention charging their customers by the hour. The vast majority seem to be talking of "per push" or "1-3" "4-8" etc...
    Why is this? So far I charge by the hour and it's working out great. I can take my time which allows me to operate safely, put less wear and tear on my equipment, and do a really nice job. I also don't worry about getting 1" or 12" it dosen't matter, I work until it's done and get paid for the entire time I was there.
    The "per push" method seems like it could be risky if you were to get a lot of snow, and assuming you would charge more according to the amount of snow...it just seems over complicated. Wouldn't hourly just be simpler? (A minimum charge, of course) Am I missing something?
     
  2. Mick

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

    Here, it's mainly custom. If I charged my customer hourly, they'd come unglued. I can charge $30 for a drive that takes 10-15 minutes and they won't even question it. If I told them $120 an hour (same thing - 1/4 of an hour)... Well, you figure that the county I live in has nearly the lowest per capita income for this State which in turn has a low household per capita, something like $15/hr for the State and less than $10 for this county. As far as minimum, it works the same way. I simply have a minimum charge for coming to plow a drive. They can understand that I have gas to buy to get there. But to say I'm charging $120/hr with a 15 min mimimum when their drive takes five minutes... That's not going to fly with a homeowner making $8.50/hr.
     
  3. OffRoadPlow

    OffRoadPlow Senior Member
    Messages: 247

    Use what works for you, hourly works here, but I don't use it. Just to give one reason why... If you get 30" before you get to push the first time on an account, is your hourly going to be fair to you and what your putting your equipment through? On of the reasons that I set limits, with triggers as low as possible. You may not care about 1" or 12", but your equipment is going to have problems sooner pushing that 12" every time, than it would if you pushed 3X at 4" or even 2X at 6".
    I am not trying to change the way you do it, I say if your happy with it, keep with what works for you. But you did ask Why is this? So it's just my .02 :D
     
  4. CPSS

    CPSS Senior Member
    Messages: 334

    Per push usually gives you bigger profit margins. For instance, we have several large open lots. One we charge $630 per push, another $500 per push. During a 3" snowfall we can clear each lot in 1-1.5 hours. Thats close to $500 per hour. During a larger storm we plow 2 or three times. Thats still 2 or 3 pushes at $630 and $500 each. Still comes out to $500 per truck per hour. What do you get per hour?
     
  5. Kent Lawns

    Kent Lawns PlowSite.com Veteran
    Messages: 315

    That's fine to start, but I GUARANTEE that I could triple your profits taking the same winter with tweaked equipment and "per-push" contracts.
     
  6. jkkalbers

    jkkalbers Senior Member
    Messages: 116

    Around here, everyone that plows by the hour lies about it and inflates there time. Most commercial properties are catching on to it and not using it. Some of the properties that are open 24hrs want each driver to come in and sign a time sheet when they get there and when they leave. Well you can forget that.
     
  7. DYNA PLOW

    DYNA PLOW Senior Member
    Messages: 295

    last season i picked up a substantially large business that was using a contractor who was charging them hourly, they were not happy with it cause they never new whet the charge was going to be.
    KENT LAWNS said it correctly......you will dbl if not triple your income with per push or per inch pricing.
    dan
     
  8. Grshppr

    Grshppr Senior Member
    Messages: 268

    Most of my stuff is per push. I couldn't afford to plow at the going hourly rate here ($60/hr). Per push I can usually be averaging at the very least $100/hr per truck.
     
  9. Alan

    Alan PlowSite.com Addict
    Messages: 1,393

    Hourly pricing is probably the greatest destroyer of incentivne and efficiency that there is.

    Look at this scenario, you're charging $X/hr and taking Y hrs to do a job, realizing Z revenue for the job. You realize that there are far better ways to do it, but they will cut your time to .6Y. Your options are to raise your rates to maintain the same level of reveune or stay with your present practices. When you approach the customer and tell them that the rate is going to be 1.5X they go ballistic.

    Second scenario, you are charging $X/hr and are running new equipment. Billy Bob is getting $.9X and has an old beater with a smaller plow. Customer sees a saving at $.9X and goes with BB, work ends up costing him more in the end, but all he sees is the hourly rate and has no clue what the job should be costing.

    Third try, you price work by the push. Now you can go with the most efficient equipment on the market. Your times drop to half of what they were, but nobody complains as it's not costing them any more than it ever did. You can either do the same amount of work in half the time, OR you can add customers and double your earnings.

    With a year of hourlywork behind you you are in a position to know how long your jobs are taking. Perfect time to set flat rates and introduce them next year.

    Hourly is an easy way to charge, you don't need a clue as to how much time it should take. Hourly with a minimum is better, but that's only going to help on small jobs where you only charge minimum time. If you're using a minimum charge then you're already charging by the push on anyobdy who does not exceed your minimum time.
     
  10. wyldman

    wyldman Member
    Messages: 3,265

    Lots of good replys so far,Alan layed it out very well.

    If your billing just hourly,then you might as well just go sub for someone and let them deal with all the headaches.

    Per push is not "risky" if you get a lot of snow because your rate either goes up for the higher accumulation,or you make more pushes,and bill accordingly.

    Hourly is tough too if you bring in bigger equipment for larger jobs.If you needed a loader would you charge them less hours because it's done faster ? that's the way the customer will see it though.At the same hourly rate ? I don't think so.Then the customer will get upset because you have to bill them more per hour.If you do use hourly at all,break it down,like "per truck hour",and state additional pricing for larger equipment if it is needed.
     
  11. SIMONE'S LAWNS SERVICE

    SIMONE'S LAWNS SERVICE Member
    Messages: 63

    You guys brought up some very good points. Like I said I'm still pretty new to this-so I'm sure as I get more expierience under my belt I'll be able to make sure I can bid the lots correctly. I also see the big one about the customer seeing that "big" hourly charge. I'm only doing one large lot as of now and I have a really good relationship with the customer-I just started doing their snow removal this year, and the last person who did it was per push-I guess they must really trust me. By the way, I have a 1" trigger with them and I never wait to go out past 3" if we're supposed to get several inches of snow-which dosen't happen alot around here as of late.
    Thanks for the input guys!