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Pricing by snowfall

Discussion in 'Commercial Snow Removal' started by Alan, Mar 2, 2000.

  1. Alan

    Alan PlowSite.com Addict
    Messages: 1,393

    I've always taken plowing jobs either by seasonal contract at a flat rate per season or per push. As a result, if I don't get there until late in a storm, or get hit by a wicked fast fall I end up pushing only once regardless of the amount on the ground.<p>I know I'm losing money by having to push 6-8 at times when I know I could have justified two pushes if I could have gotten there.<p>My current approach is to try to aff another truck or two so I can get the extra pushes, as well as service my contract accounts better.<p>Last storm we were on the road at 3:30 AM, with 1 1/2&quot; on the ground. Started on the contracts and business accounts. By 7:00 AM there was 6-7&quot; and close to panic! Only bright spot is that everyone was able to get out to go to work and we had them all cleared by midafternoon.<br>
     
  2. John DiMartino

    John DiMartino PlowSite.com Veteran
    Messages: 2,154

    I charge per plowing with additional charge per inch over 3&quot;.I use square feet+access+stacking space to help me decide on price.If not blacktop,I automatically add 25% if it's not real rough.Curbs and storm drains need to be dealt with and loading dock are a pain to keep clean during a storm.I charge all my comercials a cleanup rate of 100 an hour with 200 minimum to come back when storm is over and clean up as the yard jockeys move trailers and such.This is easy work,no rushing,storm is over and a lot of waiting around with about 1/2 hour of plowing for an hour billed.I do all residentials at 4&quot; and again when it's over.They get billed twice and never complain-I drop repeat complainers that call everytime for nothing.<p>----------<br>John D<br>
     
  3. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    Ok I have all my customers on a seasonal contract. If your customers won't go on a season contract i wouldn't plow for them. This is why, you need X amount of dollars a year to pay for your expenses, if ya only plow 5 times in a season your screwed. Mean while your expenses are still the same, truck payments stock of sand/salt, ect. Now if plowing is your second business like in my cases you may not have as much of a worry. <p>Also the average new plow truck with truck in plow i would say cost around 30K. Excample hd 3/4 4X4 gas plow ect, maybe less but i would say that's my low average. In my case i have around 1/2 million dollars in plow trucks if you use that figure. Ya tell customers this do you expect me to me to keep all this equipment sitting hear ready to clear your lot to tar and only get paid when i work and not for being on call? If you give them that sort of question most people will see that a seasonal price is fair. For residental i take a per push figure and multiply it by 10 ( around here people budget for 10 storms ) then add like 1 to as many 3 extra per push cost. That is their seasonal price. Note most residental people in maine don't want to be plowed below 3&quot; if they want to be plowed at less than that then we give them a higher seasonal price. <p>Here are some ideas for you.<p>Geoff
     
  4. Alan

    Alan PlowSite.com Addict
    Messages: 1,393

    There seems to be some misunderstanding here. My question is not about pricing overall, just about how do you get the customer to understand that &quot;X&quot; amount of snow will cost &quot;Y&quot; dollars but &quot;2X&quot; will cost &quot;2Y&quot; even though you may only plow once in either case.
     
  5. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    If you want to make money there is only one way to go, a price for the season. Per push isn't effective if you don't get enough snow, so ya don't make enough money. I gave you some help in convincing people to sign a seasonal price contract. As for dealing with the people you want to try to charge for two visits when you only came once. This is my honest answer, if you only came once thats all you should be paid for, look at from the point of view of being a customer. If you want to charge more for a bigger storm than charge by the inch. Yes i understnad that you have limitations and there is only so many places you can plow twice in a timely manner, but what are your options.<p>Geoff<br>
     
  6. Alan

    Alan PlowSite.com Addict
    Messages: 1,393

    But,, what if I don't want to carry all my workload on contract for the season? I know how to figure numer of plowings in the year, but I also know that in a heavy year carrying everythign on contract could bury me.<p>I carry enough contract work to cover all my fixed expenses and keep me solvent in a poor year. In a heavy year the per push accounts make up for the overruns on the contract jobs. <p>Our average yearly snowfall is 80&quot;, with a high of nearly 150 and a low of just under 40. Residential accounts usually trigger on 4&quot;, commercial on 2. Commercial accounts may see close to 30 plowings per season, depending on their operating hours or special needs. Per push accounts average 14 plowings per season<p>While you may do fine with everything on a fixed price that is not how I see operationg my business. What I was hoping to get was some input on moving from a per push plan to one of pricing that varies with snowfall. Nobody I know around here uses that pricing method,<p>And while your method works for you, I doubt it is the &quot;only&quot; way to profit in the plowing business. While my methods and equipment work for me, I would not presume that any of them are the &quot;only&quot; way to move snow successfully. <br>
     
  7. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    Ok i live in Maine, we get an average of about 90&quot; and the max we have ever had in my area was like 140 or 150. This is how i see it when i set up a residental yearly price i set up a cost to do the drive once then i multiply that by say 15. Thats the price for the year, in your contract you have to include a blizzard statement, this way if you get that big winter you not going to end up in the red. 18&quot; triggers by blizzard statement and after that we start to charge by the hour or by push. <p>It's look at it this way, some winters you will get like 5 storms and ya make tons of money on your yearly contract other years ya get 16 and ya don't make as much. Like this year we have had 8 Commercial runs and 5 residental, i am making out like a bandit. If i were on per push, i would have had no income in november or march, and only not much for feb or jan. Your right it's not the only way, but with a blizzard statement and other protective statements ya can get the most money i would think.<p>Geoff
     
  8. cutntrim

    cutntrim PlowSite.com - Veteran
    Messages: 248

    Geoff,<p>Your blizzard clause...do you mean that if say, tomorrow you were hit with 22&quot; over say a 30 hour period that you'd include plowing the first 18&quot; as part of the contract? And then charge per plow on the remaining 4&quot;? Do you hit your commercial properties first (we do) and then go to the residentials? Obviously with that much snow you'd be looping around and around so you could keep up with the storm. If you didn't get to your residentials until 9&quot; was on the ground, then again when a fresh 9&quot; was down you would plow twice under contract? Then again for a third time at per plow? I don't know how long it takes you to do your whole route so I'm using hypotheticals as to how many plows you'd do with a 22&quot; snowfall and how much would be on the ground each push. <p>We have all of our commercial properties on seasonal contracts, charge per application of salt, and our residentials are per push. <p>----------<br>Dave in S.Ontario<br>
     
  9. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    Ok here is how it works<p>Say it starts snowing on monday, and by tuesday morning we got 20 inches. Anytime accumulations are predicted to be over a foot i have the drivers log their hours and number or times that have visited the property ( very important for private roads). The blizzard charge is for the all of the storm. Ok when we plow commercial takes priorty, only we have trucks assigned to residental. In that storm the residental trucks may be called to assist the commercial accounts for X amount of time, If the snow is light enough, we may only plow a residental property say at 6-10 ( 6&quot; for the start of the run and 10 at the end, 10 depends on snowfall rate) Then a second run at say 12 to 16, and one more at the end. The time between the 10 and 12&quot; may be spent on commercial sites.<p>Geoff
     
  10. cutntrim

    cutntrim PlowSite.com - Veteran
    Messages: 248

    Ahh, so your blizzard charge is for &quot;all of the storm&quot;, then in your scenario you would charge your residential accounts for three extra plows based upon that storm. None of the plowing during the storm would be included in their seasonal contract. I had figured that at least your first visit to their driveway would have been included, and the remaining visits (2 in this case) would be extra.<p>----------<br>Dave in S.Ontario<br>
     
  11. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    Alan there is one other thing ya can do. More to a price per inch plan ( the only touble is see with this is where you get your snowfall measurement from may be a lot less than where you plow and if you measure it yourself your customers may doubt your measurement ) this way if you only plow once in an 8&quot; storm ya still can charge for like 1.5 or 2 plowings. The bottom line if be firm with your customers and make sure you don't give them the upper hand ( only don't be a jerk to them). Here is an excample of a price per inch plow price<p>1-3&quot; $ 25 <br>3-6&quot; $ 37.50 <br>6-10&quot; $ 50.00<br>10-16 $ 62.50<br>16-22 $ 75.00<p>The only thing about this plan is it requires a lot more paper work. Only this way you can only plow once at 8&quot; and still get paid for plowing more than once. I mean i have put my blizzard statement into action in 3 years and that requires the most paper work.<p>Geoff
     
  12. plowking35

    plowking35 2000 Club Member
    from SE CT
    Messages: 2,923

    We have batted this problem for years at our company. We charge for the amount of snow present at the time we plow.That being said we can and have had times when the customer questions our billing. When they do we instantly suggest a seasonal contract.<br>I hate having money be the controlling issue on weather or not we service a property during a storm. <br>We also will have a min and max on a seasonal contract. If we fall short of the min, we dont give any money back, but apply it to next season, thus securing the account for next year. We figure x # plows and sandings, and if we go over then they pay per push. Keeps over head in check and still keeps price reasonable. They will pay for an average season tho.<br>Dino <p>----------<br> Professional Ice and Snow Management <br>Products:Services:Equipment www.sima.org
     
  13. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    Dino<p>How many plowing/sandings is your min and max? Are you at average yet for this year or below?<p>We have been waiting for your reply on this discussion, were ya on vacation?<p>Geoff<br>
     
  14. plowking35

    plowking35 2000 Club Member
    from SE CT
    Messages: 2,923

    Yes Geoff I was. I went by you this am.<br>Went to visit my budy in Sebec Maine. Rode Fri AM in the BISON plow truck that he drives.<br>1981 Chevy BISON with a Detroit 8cyl and 11 plow out front and a 8' wing plow. 10 wheeler with a 12 yard stainless Swensen spreader in the rear mounted to the frame.<br>Our average is 10-12 plowings and 5 extra salt/sand runs.<br>Right now we are at about 1/2 that with about 1/2 our annual snow fall.<br>We have plowed 6 times with 3 extra salt runs.<br>With out seasonal contrats I would be hurting right now.<br>Dino<br><p>----------<br> Professional Ice and Snow Management <br>Products:Services:Equipment www.sima.org
     
  15. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266

    What truck did ya drive up to maine. I may think i saw a truck like your 98 on the ME Turnpike this morning. Oh yea we had crews out today playing in the mud, trying to get as much done as we can. The want more snow, can't do much with a lot of that on the ground. They are starting to post the roads and before long the L 8000s will be parked for a while. We are currently expanding a sub station in Gorham, had crews up and down the pike all day because of it. <p>Geoff
     
  16. plowking35

    plowking35 2000 Club Member
    from SE CT
    Messages: 2,923

    Sorry drove the mini van. They have a early mud season up north. Closed the wood roads.<br>Hurting alot of cutters up there.
     
  17. creativedezign

    creativedezign Junior Member
    Messages: 21

    if you limit your seasonal contracts by number of pushes how many do you give them before they start getting charged for more? (in case of a very heavy winter to cover ur ass)
     
  18. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,868

    Ummm, not sure if you're asking these guys, but most have not posted since 2003. And this thread is from 2000.
     
  19. creativedezign

    creativedezign Junior Member
    Messages: 21

    hah thanks, i didnt even realize that
     
  20. plowtime1

    plowtime1 Senior Member
    Messages: 446

    I hope you dont plow without looking :laughing: