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Pricing a Lot for Next Year

Discussion in 'Bidding & Estimating' started by Mitragorz, Mar 30, 2015.

  1. Mitragorz

    Mitragorz Senior Member
    Messages: 165


    The lot is roughly 120,000sq'
    975 linear feet of walks, about 3900sq'
    2" trigger with sand/salt mix. Salting only for anything below trigger.

    I got cold-called by a property manager who is not happy with his current snow service provider. On the phone, the guy said that the current plow guy "has been doing this lot for 10 years, and he's out. He destroyed everything."

    I googled the address and was intimidated by the lot at first. I'm not a commercial guy, I do driveways and streets in Queens. I've got two trucks for now. Anyway, I stopped by the lot to take a look, and the manager was right... The lot is destroyed. Not all the drivers' faults (old asphalt starting to come up in spots), but the lack of caring was pretty evident. While checking out the place, the manager came out to greet me and introduced me to his super. Got a little face-to-face, which is nice. The previous plower tore up ALL the speed bumps, bent up parking signs, and twisted up benches from piling snow on walkways and islands. He supposedly would pile snow in front of fire escapes and block in sidewalk "ramps" (the little 2 or so inch rise from the parking lot to the sidewalk), both of which are against code. The manager would have to get his own guys out there to fix the mess.

    But anyway, after taking a look at the lot first-hand, it's not as big as the picture made it seem. I just want to hear if you guys think my prices are in line.

    My costs:

    Drivers: $80/hr. My cousin plows for me, and I pay him very well. I sub for the DSNY in Queens and I make a very good price per truck, and I can pass that along to my drivers. He makes $60, and I'd give myself $20 or so. As the owner, my pay is basically whatever I feel like taking out of the company profits after the year is done. Which is essentially nothing, everything I make goes back into the business. I don't think the profit margin will be as great here, but we'll see what I come up with.

    So figure $80/hr for drivers.
    Fuel: $10/hr for my two trucks.
    Shoveler: $15/hr. Or I might just do them myself with an ATV. I don't know how to pay a guy for sitting around waiting for accumulation.

    So that's a cost of $105/hr. I figure this lot would take 2 hours with two trucks? So $210 cost per push?

    Sand/Salt: $40/yd, maybe 3 yards for the lot? $120/salt application. For the walks, I'd likely just shovel out of the spreader into a walk-behind. a few hundred pounds is negligible, maybe $10 or so. Unless they want straight salt on the concrete walks.

    The kicker comes when I factor in GL. A few years ago I was quoted $1500 for GL for just myself and my one truck. I'm thinking that adding another truck and driver would double it. Hopefully less, but prepare for the worst. I'm planning on $3,000 for the insurance. This area get an average of 21" per year (more lately, but average is average). That's 11 pushes. Spreading that GL out over the pushes is $270 alone. To that brings the plowing cost per push up to $480!

    It seems like I'd have to charge a pretty high price per push just to make a significant profit. Is $300 too much to ask per salt app.? This would be my only commercial property, but it would be fantastic if I could get some of the neighboring lots. But I think that might be asking a little much from my two-truck operation. Not to mention, I'd have to buy spreaders this year to make it work. I don't have any... Like I said, I was a street guy the past two years. I've still got a handful of driveways that will help with that GL cost... But certainly not $3,000 worth.

    Advice from the pros? :drinkup:
  2. Mitragorz

    Mitragorz Senior Member
    Messages: 165

    I should have also added that he is looking for a per push price and a seasonal price.
  3. Herm Witte

    Herm Witte Senior Member
    Messages: 546

    Yes. You are not ready for this.
  4. John_DeereGreen

    John_DeereGreen PlowSite.com Addict
    Messages: 1,714


    Message too short
  5. Mitragorz

    Mitragorz Senior Member
    Messages: 165

    Fair enough. Like I said, when I first looked at the site my first though was "this is over my head." But even sitting here running the numbers... I can make more of a profit just doing what I've been doing. When I pick up truck number three for next season, one callout from the City will likely pay just as much as a whole year of plowing this lot. And I won't need to carry GL.
  6. gtted

    gtted Junior Member
    Messages: 2

    Sand/Salt is $80/ yard to pick up on the Island. Salt was $180/ yard. What are his requirements for insurance? That lot in Queens should be $800/push with sidewalks, minimum.
  7. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    What do you mean you don't need GL?
  8. flyguyirvin65

    flyguyirvin65 Member
    Messages: 47

    NO GL !!!:angry::angry::angry:
  9. Mitragorz

    Mitragorz Senior Member
    Messages: 165

    Before the flames begin, let me explain. When I'm plowing for the city, all I need is valid auto insurance. I'm covered under the insurance policy of the company that hired me.
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    I would triple check that with your insurance company.
  11. Mitragorz

    Mitragorz Senior Member
    Messages: 165

    My auto insurance doesn't have anything to do with that, though. The City hires ABC Company to plow the tertiary streets. ABC Company hires me, and my truck and I are written into ABC Company's policy.
  12. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Auto and Gl are different, if your plowing the road and hit something while plowing auto will cover it,someone comes around and sues for slip and fall GL is involved, even though your covered by the company ,you better check and make sure you covered yourself.
  13. Randall Ave

    Randall Ave PlowSite.com Addict
    Messages: 1,413

    I plow roads in Jersey. My GL is a 3 million required. Plus the extra for the roads. Three trucks almost ten grand. Town is listed as additional insured. But every state is different.
  14. John_DeereGreen

    John_DeereGreen PlowSite.com Addict
    Messages: 1,714

    Regional pricing amazes me. I bet that lot would go for ~110 plowing, ~120 salting here. If you could get that much out of it.
  15. Glenn Lawn Care

    Glenn Lawn Care Senior Member
    Messages: 552

    I'd say $400-500 for salt. $125 per acre
  16. Mitragorz

    Mitragorz Senior Member
    Messages: 165

    That's a good point. If a resident finds out who I am (the company name is on the truck, after all) and decides to sue me directly, would ABC Company back me up? I'll look into that before next season.

    As for the lot, I just don't think it's worth my while. I make $2,100 per truck per storm plowing for the city, before costs. Even if I got $800 per push for the lot, multiplying that by 11 pushes (avg of 21" of snow annually for the area) is only $8,800. That's two storms in Queens.

    I don't think it makes sense financially. Especially when I pick up another truck this summer.

    FISHERBOY Senior Member
    Messages: 542

    I have GL, business commercial auto, and just recently I had to get an umbrella limited liability policy for 5 million. Large commercial clients seem to be requiring it.