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Question for the commercial guys that have been in the "game" a long time

Discussion in 'Commercial Snow Removal' started by DeAdZoNe, Dec 26, 2011.

  1. DeAdZoNe

    DeAdZoNe Member
    Messages: 31

    Im sure I am in the same boat as a lot of people. This season obviously starting out slow has been rough for business. I currently have a mix, driveways, around 35, and 4 commercial lots, and one private roadway. Only one of the commercial contracts is seasonal. Selling the customer on the seasonal price is hard because they see a big number up front. With the last couple years being higher then normal snowfalls, the average events went up so the seasonal price went up. I fear that not pushing the seasonal contract more this past fall has hurt my business. So I guess the real question is for the guys that have been doing this a while, do you try to line up mostly seasonal contract work, and if so how much of your work represents seasonal prices?...(snow or no snow). Luckily I have kept busy with other work but that is running out fast. No snow forcasted again this week, and my season is almost 25% over with only 2 salting runs! I have personally come close to giving up my driveways and going all commercial, and vise-versa in the past. At this point im just tring to steer my company in the right direction for the coming years. I own all my equipment, no payments, and winter usually represents 40 percent of our yearly income. your thoughts.....
     
  2. nor'easter1

    nor'easter1 Senior Member
    Messages: 140

    I have just as many residentials and half of them pay up front by mid october. I started this five years ago because frankly I do not look at the bulk of the residentails as real money makers more keeps them happy for my main business. It was not hard for me to get them to pay a lump sum because as I would put it why haggle over 3 or 4 inches just pay one time and all set with the exception of last winter where we had to move snow. Long run it balnces out light, heavy winter comercial is the gravy for sure and again less postage, less haggles, no suprises it just makes sense to me. Really how long does it take to plow a resi driveway and they are all pretty close to one another. It's just a leap of faith I took with my customers plus income in October is not a bad thing. Very impressive list of equipment you already have paid off you must have a good other source of income.
     
  3. tjlands

    tjlands Senior Member
    Messages: 575

    We do all commercial and just a handful of residential drives, the residentials we do have a min charge of $100 per storm, so they are large residential clients.
    We keep the seasonals limited to 30% of our accounts.(by revenue) This seems to be a happy medium for us , although we did lower it after we had two years in a row with record snowfall.
    Our snow revenue makes up 25% of our yearly gross.
     
  4. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    We have been at this about 15 years now, this year I have more per trip than ever which hurts a little right now. But last season we had almost 50% more snow than average, & a record month of December which hurt much worse. It took me a couple months waiting on seasonals payments to catch up, the we ended up getting no snow basically from the second week of February on. One thing I have learned is this business comes in cycles & patterns. Nothing says the pattern won't shift & we won't get pummeled for the next 12 weeks, out every day, etc.
     
  5. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Good years bad years ,100% seasonal.
     
  6. grnstripes

    grnstripes Senior Member
    Messages: 236

    we try to stay around 50% per push 50% contract this seems to work well
    some winters I win on the contracts ( like this one )
    some winters they win ( like last season )
     
  7. Superior L & L

    Superior L & L PlowSite Veteran
    from MI
    Messages: 3,039

    We run about 1/3 of our winter work on seasonal including salt. Other than 30-40 driveways the balance is per push per salt. We can always count on salting even if we don't get a ton of pushes. I've been doing this for close to 20 years now and big snows, small snows we always average out to 12-17 plows
     
  8. ken643

    ken643 Senior Member
    Messages: 818

    I keep it simple, about 38 Driveways and 2 lots. All pay as you go. Per storm and by the depth of the snow, no matter how many visits to maintain it. (Jeep). But this is just extra money, not my full time job.
     
  9. magnum1

    magnum1 Senior Member
    from ID & ND
    Messages: 249

    We have no seasonal contracts per push only. we do apt. complexes and mobile home
    parks ( includes a lot of driveways ) Snow plowing keeps equipment busy in the winter. It's less than 5% of our yearly revenue
     
    Last edited: Dec 26, 2011
  10. BMWSTUD25

    BMWSTUD25 Senior Member
    Messages: 630

    We have a mix of commercial residential and state run handicapped houses. Some commercial work is seasonal and a couple of the residential drives. I try to keep my seasonal customers to 30-40 percent of revenue. Winter work is about 40 percent of my overall business. I have many friends in the business who think I'm nuts for doing any seasonal work but all of those guys have other stuff like construction excavation or carpentry work to keep busy with. Since al I do in the winter is snow its very important for me to keep cash flow up. Sure you have a chance of losing out on seasonals but if its done right then the way I see it, seasonals keep you from going broke on a light winter and on a very very busy winter the per push money is rolling in making up for anything you might be losing on the seasonal accounts. Just has to be the right balance for your business
     
  11. diesellandscape

    diesellandscape Member
    Messages: 79

    Its best to keep a mix of seasonal and per push. We dont do any resi anymore. Too much of a pita. Our seasonals would of been 40-50% of our sales for this winter but with the way its looking its going to be 80%. With seasonals just make sure you add something extra for hauling, stacking, and anything that could hurt you. If you base it over 3 years its not that bad. If your running out of work, spend some time next month in the office cold calling to line up work for a big spring.
     
  12. SDLandscapes VT

    SDLandscapes VT Senior Member
    from Vermont
    Messages: 300

    Does anyone plow on retainer??
     
  13. BMWSTUD25

    BMWSTUD25 Senior Member
    Messages: 630

    I believe there are a lot of guys on here who plow on retainer but if I'm not mistaken its mostly larger lots and guys who leave equipment on site
     
  14. grf_1000

    grf_1000 Senior Member
    Messages: 295

    i'm 80% seasonal and loving this winter even here in the snow belt of the north. we are over 48" behind, but this is not the norm. making up for last season.
     
  15. SDLandscapes VT

    SDLandscapes VT Senior Member
    from Vermont
    Messages: 300

    why does it just have to be larger lots on retainer....to me this seems the most fair and equitable way of doing things
     
  16. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    I have a 3 way split, 1/3 on contract (mostly residentials) 1/3 on per push (mostly small commercials), and 1/3 on hourly with a retainer (large commercials and condos) , I find this way it is always a win win situation for us.
     
  17. Flawless440

    Flawless440 PlowSite.com Addict
    Messages: 1,543

    Just got back from throwing some salt!!! First time this season

    We have no seasonals, 20 comm lots. Mostly office buildings, apt. complexs

    All pay per push, snow is 25% yearly income for us. Been staying busy with tree work, about to start a large demo job.

    Waiting for some more snow:realmad:
     
  18. Herm Witte

    Herm Witte Senior Member
    Messages: 553

    Consider requiring your per push accounts to pay for a minimum amount of pushes, say one third of a normal seasons pushes. You do have expenses that add up regardless of whether it snows or not.
     
  19. DeAdZoNe

    DeAdZoNe Member
    Messages: 31

    I do landscaping and some light dirt and tree work during the summer months. I keep the cash rolling in during those times, by mid november I usually stop bidding jobs and focus on our winter operations. A huge mistake I have seen by the bigger guys is getting in over your head with debt, just last year with almost no snow in dec. a large outfit in the next town went belly up because by the time the snow came in january it was too late for him. So when we purchase something large like a mower or a truck or trailer...its almost always paid in full. I have only been in the business for 4 years. I like the idea of possibly having a min payment for the residentials. With the commercials maybe I can try a contract that doesnt include salt or loader service. Keep the number down at first and I wont loose my shirt on salt (like I did the first year with an applebees). In general most things in my area are bid per push, per application, etc, so getting people to jump onto the seasonal bandwagon is the tough part. Thanks for the input, next year will be different!!!
     
  20. CTerrySGD

    CTerrySGD Member
    Messages: 64

    All Commercial here.... 8 lots between 2 and 10 acres. 100% T&M. Always seems to work out for me and that's what most clients are used to paying in my area.

    Good luck! Every area is different!