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Pricing a lot

Discussion in 'Bidding & Estimating' started by RandallJ, Nov 28, 2015.

  1. RandallJ

    RandallJ Member
    Messages: 44

    This might sound odd but I have to price my own lot..

    Purchased a 3/4 GMC with a basic 7.5 Unimount

    Reason being is an expansion of our property and costs will get a bit out of control unless we bring plowing under our own roof.. Our current provider does a great job, just a matter of $$..

    Trigger is 2" and lot must be "salted" when cleared (medical facility)

    For this reason, a new company was formed to "plow" our lots and will be billing the parent company for services..

    Current services are for "Lot A" (around 17,000 sq ft plus concrete drive to back parking under building)

    New property acquisition is for lots B and C..

    The B and C lots are the same property but depending on what the business plan is for this property, Lot C may not be used and so I must break that up a bit.. Lot C holds 140 cars

    Current price for Lot A W/Salt is $300 a push.. ($85 for push $215 for salt) While salt is pretty easy to figure out (per square foot?) the snow removal is another animal..

    Plenty of push off area all over the place so I guess no issues pushing piles a long ways..

    for some kind of scale, the distance from sidewalk to frontage is 150'

    Last edited: Nov 28, 2015
  2. Freshwater

    Freshwater Senior Member
    Messages: 883

    Not sure where your located but where I'm at all three lots would go for 300 with salt.
  3. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Do this,take all the profit from your medical company and use it to pay the plow company. Then the plow company files its taxes and loads it up with a bunch of deductions.
  4. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,898

    Why go legit?
    Just pay the plow guy (yourself) in cash.

    and why don't you know your costs in clearing these lots?
    His cost doesn't matter, what are yours
    Salt, your cost applied
    Your cost of Insurance:laughing::popcorn:be sure to tell them it's a medical facility.. As the liability is diffrent for diffrent business types.
    They maybe you will understand his pricing better.

    What exqupment are you going to use.
    sq Ft of sidewalk
    Etc etc

    So your starting a plowing company to plow your other business lots.
    Well, you know the drill.....
    Last edited: Nov 28, 2015
  5. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,394

    What is your location?
  6. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Kalamazoo :D
  7. LapeerLandscape

    LapeerLandscape PlowSite.com Addict
    Messages: 1,444

    I've complained to MJD about this a couple times before. I think its important that you have a location in your headline or log in line.
  8. maxwellp

    maxwellp PlowSite.com Addict
    Messages: 1,112

    Kalamazoo - is he not in jail because he brought his toys to the Library? Ha

    If you are charging yourself charge whatever you like

    With salt
    A = $300
    B = $300
    C = $600

    Where are you?

    Here it would be 1/2 that.
    What Are the other sizes?
  9. BUFF

    BUFF PlowSite Fanatic
    from FR NoCo
    Messages: 6,703

    Odd.....yes it is.

    I get the plowing being brought in house (they'll soon learn it was a mistake), the piece that doesn't make sense is who formed this new company and why? Who's going to plow the lot, a parent company employee or a "new" company employee?
    Typically business owners set up separate corps that own the property the business occupies, for leasing equipment but not for maintaining the grounds.
  10. RandallJ

    RandallJ Member
    Messages: 44

    This is in NE Indiana..
    Why a new company... short answer is "liability"
    Staffing? new hire at $24 an hour
    Profitability is inconsequential at the moment..
    current services on the last year were $3000 + (10 events) and will likely quadruple this year with new property.. Who gains from this expense, certainly not us.

    We have at least two "experienced" operators already on staff and are more than happy to assume this job (in addition to their current duties).

    In the case of a heavy snow fall year, our expenses will only go up on the hourly wage side and likely a bit more maintenance on equipment rather than $900-$1200 a snow fall...

    I get the sour grapes about a customer pulling the plug on a profitable lot but by the same token, why do you work on your own trucks when there are professional technicians out there that do it all day long for a profit? Don't you feel bad when you take hundreds out of their pockets by doing your own hoses, belts, oil changes, brakes, plow service, tune-ups etc?

    I would think to maximize profits and minimize expenses.. Currently it takes $300 to plow and salt the small lot (under an hour), adding lot 2 doubles the cost with lot three doubling up again.. Now we have $1200 X an average of 12 events per year (over the last 5 years) and $14400 out the window..

    We bite the bullet and buy a $5000 truck and pay a driver $25 an hour to run the truck.. and this leaves us around $9000 for salt, maintenance and other expenses.. ( I think it is doable)

    Even if we repeat and buy another truck the following year, We should come out ahead..

    Now "why form company".. looking at the big picture, it would not be inconceivable to acquire a neighboring lot for "profit".. That would put the medical facility under the gun should something bad happen.. (not an option) The cost of setting up this company is under $300 and simply makes sense for the small expenditure..

    This also insulates the company should the truck be involved in a crash, injury or worse a death...

    I drove trucks professionally for a lot of years and being a company driver certainly has it benefits over being an owner operator.. Just a matter of who is going to assume the risk of a loss. As we already stand to lose $15k moving snow, why not take that same amount and see if we can end up with an asset at the end of the year? (truck, plow, spreader) Company could just very well work out to be a money maker should it decide to take on another lot or two?

    Prevailing wage in our area is $15-$18 an hour for a company driver that must be available 24/7, at $24 I think we can get a guy that just wants to supplement his income and can leave home at 5AM and be home again by 10AM..

    Could very well be completely wrong about all this but hoping not..
    Last edited: Nov 28, 2015
  11. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    I thought this would be a big lot lol.
  12. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    I get what your saying and agree to some extent but remember your coming to a site where people do this for a living and asking us to reveal our cards so to speak . I worked at a state facility as a mechanic, we had our own plow truck (brand new Chevy with BOSS plow) and every time I'd go to plow the lot my supervisors said no he needs to be in here working on cars. Either the lot didn't get plowed when it needed it or I wasn't fixing cars when they needed to be fixed or they had someone who knew nothing about plowing trying to plow.
  13. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,898

    Right on big brother, everyone's IP should be visible to all.

    Pisssst some dont even use their real names....

    I know, :dizzy: crazy ain't it....
  14. Herm Witte

    Herm Witte Senior Member
    Messages: 546

    A 5000 investment for a dependable plow truck? I just sold two trucks over 10 + years old for more than double that. Why, because they were showing their age and reliability became in question. Your plan may work if someone looks after the truck as their own and if you have no significant repairs. I think you are misjudging our industry.
  15. BUFF

    BUFF PlowSite Fanatic
    from FR NoCo
    Messages: 6,703

    Most of my customers were DIYers, sounds good at the time but at the end of the day it's not. Employees take vacations, call in sick, quit and get fired.

    Spending $300.00 is the cheap part, for a standalone company add GL, WC, Com Vehicle insurances, Vehicle / equipment maintenance, materials cost and storage it becomes much more than most would want to bit off for a couple acres of parking lot and sidewalks.
  16. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,898

    What does this new employee do in the summer?

    Ho Ya you will need 2 employes. Jmo...
    Cya a back up truck and snow blowers anda list of people you can call24/7 to hire.

  17. RandallJ

    RandallJ Member
    Messages: 44

    Nothing better than a good challenge.. As a mechanic/garage owner/racer.. nothing ever motivated me more than "it can't be done" or "it won't work" :) I will be upfront and report back the downfalls, trials and tribulations..
    I have been self employed since 1977 and pretty sure I can pull this off.. This is not a commercial endeavor and the truck wont be seeing 18 hour days... I already have 2 drivers wanting the hours and so cross my fingers...

    Worse case, I will go buy a brand new truck, new plow and write it off over 5 years (other ventures have left me in a position to do this but I like trying to be smart cheap too).. Even with that type of outlay, I am even at the end of the 5 years

    Do appreciate the insights and years of knowledge behind some of these warnings..
  18. RandallJ

    RandallJ Member
    Messages: 44

    Oh I do get that... knowledge is income in the mechanics world for sure.. I never gave it away.. Not a stranger to the value of "free" advice.. one can expect to get what he/she pays for.. but some insight can be had from it all the same.. Will never get used to guys coming in wanting a "Free" diagnosis so they could go home and fix it.. (after asking to borrow my tools.. they would be better off to ask to borrow my girlfriend, I can work without her)

    Have ushered in a number of new business owners over the years that had grandiose ideas of 6 figure incomes only to find out it was tough to clear 10% of gross..
  19. LapeerLandscape

    LapeerLandscape PlowSite.com Addict
    Messages: 1,444

    Most of us spend more then that for a good used plow alone.
  20. BUFF

    BUFF PlowSite Fanatic
    from FR NoCo
    Messages: 6,703

    I can appreciate your gumption but you may be over looking many factors. I say this due to post 16 in this thread http://www.plowsite.com/showthread.php?t=164669 good luck to you.......