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Residential Pricing

Discussion in 'Business Fundamentals' started by jmleaver, Jan 6, 2003.

  1. jmleaver

    jmleaver Junior Member
    from NH
    Messages: 4

    I have a few questions about pricing, so if you could respond I would appreciate it.
    What are the most common and most rewarding way to price residential customers?
    Per Push?
    Per Storm?
    + 6 inches?
    How do you price walkways and does that price change with amount of snowfall?

    Thanks for your help!
     
  2. Doctordo

    Doctordo Member
    Messages: 50

    Per push is the best way for you to make money if you can get the person to agree to it. I just recently did a job the snow was about 20" deep with drifts. It took about 4 hours for 1 man . The length was about 500 feet.
     
  3. John DiMartino

    John DiMartino PlowSite.com Veteran
    Messages: 2,154

    I have a tough time with residentials,im ready to give them up,for the most part. I price them per push,all of them,I have a up to 5" rate,a 6-11,and a foot+ rate.I do not charg commercials this way.I have about 40% of mine that appreciate my dependable,consistent service,the rest are complainers.We got 17" on the xmas day,boy they never stopped whiningcaling me asking why i charged them double the normal price-its all speeled out in there contract,they just dont read it.Then i gotta send them another one,becasue they cant find it.I aslo have the catch 22 of getting 1.5" of snow ,if i plow residentials,1/2 complain,if i dont the other 1/2 complain.I never get complaints for commercials,they like being accessible,and black and wet.
     
  4. Mick

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

    Mine are set up:

    3" to 6" $xxx
    over 6 to 9" $xxx times 1 1/2
    over 9" to 12" $xxx times 2
    over 12" $xxx times 2 + $x per inch over 12"

    I explain it carefully up front, those that don't like it, find another contractor.

    Works very well for me.
     
  5. wyldman

    wyldman Member
    Messages: 3,265

    Per push is probably the best way to make money at it,but is tough to keep track of sometimes,as a lot of customers just don't get it.We have gone seasonal for residentials as well,all paid in advance before the season starts.No more haggling,measuring snowfalls,complicated billing,etc.Weeds outs a lot of the crappy customers too_One price include all steps\walks and salt as well.Only thing that may be additional is our blizzard clause,which rarely gets used,and most customers understand.
     
  6. Ohiosnow

    Ohiosnow Senior Member
    from Ohio
    Messages: 415

    John DiMartino

    You won't be sorry when you give up residentials who needs the headaches as I've bin there done that.

    I never get complaints from my commercial accounts either & they all pay on time. :waving:

    I know there's not enough commerical accounts for everyone but it 's where the BIG $$$$$$$ are made.:D
     
  7. jmleaver

    jmleaver Junior Member
    from NH
    Messages: 4

    hey guys thatnks for you help....

    This is my first year doing it and I gave my residential a "one price per storm quote" so I know I didn't bid right.... But it is always a learning expperience. I agree with the commerical comments. I have a few and they are always good.

    If you guys have any other advice I would be open to hear it.
     
  8. PINEISLAND1

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    I am almost out of residential completely...unfortunately I am not out of residential completely...

    They just are not for me I guess, for all of the reasons John and others pointed out. Because of that, I have changed my pricing and pricing structure over the last couple years.

    Most of the drives around this area are seasonal, not per push. I personally think that is the only way I would do it, for a couple reasons.

    -I dont want to spend the time with billing for a $25 per service account. The paper work and record keeping just aint worth it, and it seems they are the first to question you about a service done.

    -The seasons like this year here, if you billed per plow you would have maybe done residentials one or two times. I need my overhead covered, and that just wouldn't cut it. On the other end of the spectrum, when you get a good winter like we had last and get 25 pushes, then they get disgusted because of the cost !

    - I want my money up front, 100 percent, by the first of November if I am doing their drive. I have been stuck by too many people who wont pay, and I cannot accept that.

    So, each year the remaining customers we have in the residential market get bills that represent premium pricing for the region, and all must be prepaid before snow flies or we dont show up.
     
  9. doremican

    doremican Junior Member
    Messages: 2

    Tom,
    I'm new in this forum ,but I'm doing snow for the last 11 years.
    Where I am ,rarely we have a full winter with at least 15 pushes
    over 2", most of the time they are 6-7 and nobody wants to pay per season(only one for me this year!).
    I introduced a concept in my area which works for me perfectly.
    It doesn't make me rich if it doesn't snow,but covers my overhead.
    If you want more info, post a brief message for "doremican" !:waving:
     
  10. doremican

    doremican Junior Member
    Messages: 2

    pricing

    Mick, I've learned something from you ! Thanks.:)
     
  11. Mick

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

    You're welcome:waving: . Something useful, I hope.
     
  12. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    I've got to chime in.

    I've got one truck doing residentials almost exclusively, I use a pricing structure very similar to Mick's. I'm very pleased with the income rate on this truck, and I rarely get stuck for payment. I get a few chronic complainers, but when I suggest they might be more pleased with another contractor, they clam right up!

    I've had the opposite experience with commercial accounts, I've been burned for payment and had to go to court for it. This can get tricky if there are corporations involved, and can get expensive with legal costs. To me, it seems John Q. Public has more fear of the Judge than Acme, Inc.

    jmleaver, you have to price sidewalks at the same rate as you do your truck, or else you're losing money. You could be out plowing another driveway while your shoveling that walk, so price accordingly.
     
  13. Strongmd

    Strongmd Member
    Messages: 43

    I believe that a well run & set up residential plow business can be as good or better than commercial.
    There are goods and bads to everything. I provide residential landscape maintenance during the rest of the year, so I don't have the large equipment sometime necessary for commercial.
    We have over 200 driveways and a handful of very small commercials that we handle with 6 trucks. We charge by the visit and I think that is the only way to do it. We also have about 25% of our customers prepaying 8 visits by Dec 1st in order to save $5 per visit. The $ is non-refundable. HOWEVER, they still have to pay per visit once we go over 8. 4 of the trucks are mine and 2 routes are subbed to guys with pickups. They get 1/3 of what they gross. To do a lot of residential, you definitely need to be organized and have a good system for billing and record keeping. Some of the pro's of residential are,
    customer loyalty,
    less liability,
    more $$/truck hour
    you don't have to shovel if you don't want to,
    don't need a sander,

    cons-
    much more potential for complaints
    larger trigger depth
    tedious plowing
    garages & backdragging

    Just some thoughts,

    We've got our systems and pricing fairly fine-tuned & our routes are very dense.
     
  14. Chief Plow

    Chief Plow Senior Member
    Messages: 201

    We did the residential thing for years. It is what got us started, But I got tired of the headaches. I still have 12 residential accounts, but they pay the same as my commercial accounts which is every 3". If they don't like it find another contractor. These 12 were the ones that stuck around. Good Luck

    Rick
     
  15. fordman

    fordman Senior Member
    Messages: 327

    I am trying to get out of residential work as well. Too many complainers. The ones I currently have are all on seasonal contracts. Keeps things simple IMO.
     
  16. CPSS

    CPSS Senior Member
    Messages: 334

    Hey Rick, do you plow The Inn at Saratoga on Broadway, we did ONE year, never again. They do have a nice bar though....:drinkup:
     
  17. cat320

    cat320 2000 Club Member
    Messages: 2,223

    I charge per push up to 4" for houses .
     
  18. Brother1

    Brother1 Member
    Messages: 59

    We charge on a per push basis with a 2" trigger and visits at each 6". We've gotten burned by this a few times because if the forecast says we're only gonna get 4" we would normally wait around for the end of the storm to hit all the residentials. Than if we get 8" we've screwed ourselves by waiting too long and we end up only getting to people once and we could have been there twice and charged for 2 visits. I've been thinking about changing to the per inch price as some of you guys have said in these posts. That way we are covered if there is 8" and we only get there once. But my question is how and where to you do your measurement? Do you measure at every customers house?? And if you take one measurement at your shop or off a weather page do you have many people complaining that they measured their the snow in their yard and its not what you are billing them for? Any info is greatly appreciated.
     
  19. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    I do things similarly, Brother. I charge a flat rate for the first six inches, then 1/2 rate for every additional visit if required. Sometimes I don't make it through the first time completely before it's stopped, but I charge for the additional visits as if they had occurred. You're spending more time cleaning up the additional accumulation and should be compensated.

    I think I've only been questioned once on my policy, and after I explained the charges, I had the check in 2 days. If you are honest and up front with your customers you shouldn't have any problems. The customers who do complain, suggest they seek another contractor.

    As for depth, I measure on my back deck, it's elevated so it freezes and gives an accurate reading of accumulation. I use this measurement for my full route, but I stay very close to home, only traveling 5 miles to the furthest point. On rare occasions, the other side of town will have only a dusting when we've received 4", so you have to adjust for that.
     
  20. Got Snow

    Got Snow Senior Member
    Messages: 104

    wow

    this is a really interesting thread for me. i spend alot of time fighting the same issues that have been mentioned. basically, i follow mick's method of pricing. i'm able to net about $130 p/h pricing this way. and yes just like pelican said your able to charge extra one 1 visit.

    i find the hardest thing to manage is if or when or who even to plow around commuting times.

    i enjoy doing residential. all the guys want the commercial stuff. it leaves the door wide open for me. i started this year (nov '02) and have over 40 accounts. i could easily double this for next year. i've adding shoveling and salting too. alot of people pay me on the spot too, which helps with the paperwork. it also keeps the amount of the bills to a minimum. i leave a reciept/invoice with each storm, including inches,date,time.

    people will want to see seasonal pricing after this winter. at least it's a good winter to base a seasonal price on.