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season contract with a cap

Discussion in 'Business Fundamentals' started by snowguys, Feb 18, 2009.

  1. snowguys

    snowguys Senior Member
    Messages: 708

    ok so this is my first year with this company and i had a inside guy so i knew who i was biding with some of the big companys around here but anyways this year contract was a season contract with a 40inch cap so anyhting after 40 would be a per push has anyone else herd of this i havent and i put in a 3 year contract starting next year with the same thing but now my guy got let go and they want a contract with no cap for 3 years.

    thanks brian
  2. Krimick77

    Krimick77 Member
    Messages: 50

    Yes, some contractors have caps in their seasonal contracts. What are your yearly snowfall averages? With that information you should be able to decide if you can operate without the cap. Are you over your cap for this year?
  3. snowguys

    snowguys Senior Member
    Messages: 708

    yea we are we were up in dec so it has been good it just sucks they want no cap for next year
  4. augerandblade

    augerandblade PlowSite.com Addict
    Messages: 1,054

    Any contract where you haveta put people and a lot of equipment & material on their site should have a cap. The big companies ((some of em)) e.g. Walmart here in town dont wanna give a contract with a cap. How are ya gonna price it then when you have no idea (other than average snowfalls per season). And why should we as the little guy haveta payup when it snows or freezes rain more than the seasonal average.
  5. beam

    beam Senior Member
    from pa
    Messages: 314

    We go buy saltings and unlimited plowing
  6. TCLA

    TCLA 2000 Club Member
    Messages: 2,696

    Same here. In this area you are fortunate to get clients to agree with caps on a seasonal. You should however have a "blizzard clause" or extra billing over 7,8 or 10".

    Saltings always extra unless they agree to an all inclusive.
  7. Lencodude

    Lencodude Senior Member
    Messages: 128

    If there is no cap and if you get 2 bad seasons you could lose your shirt if you don't bid right.
  8. TCLA

    TCLA 2000 Club Member
    Messages: 2,696

    And if it doesn't snow you get to buy 3 new shirts.

    The seasonals should be your long term customers. It will average out over time.

    If it is a heavy winter you will make it up in saltings.
  9. snowguys

    snowguys Senior Member
    Messages: 708

    thanks for the info guys this is my first season contract like this with a cap and they want salting and plowing all in one and i did a good job they want me to do 6 outher lots next year all on season contract so we will have to see im just going to go off what we did this year and base it off that
  10. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    Salt is to volital in price to go seasonal. Give them a base price + a surcharge if it goes up. Tell them you can either do that or you can give them a price for the highest its been.

    I was surprised to hear that someone in MI (TCLA) has a cap on a seasonal. I thought that was a Canada thing. My seasonals state we will remove snow no matter how much it snows for the season. I just keep raising my occurances each year. One of these years its not going to snow and I will make out.
  11. TCLA

    TCLA 2000 Club Member
    Messages: 2,696

    No sir, never claimed that....we have no cap ~ unlimited plowing on all of our seasonal contracts.
  12. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    I didn't think anyone did (in MI) Just they way I read it sounded like you were fortunate to get clients to agree with caps.
  13. big acres

    big acres Senior Member
    Messages: 653

    three year term gives you good odds at averaging out. I'd put a clause in there that says you will bill pro-rata for EVERYTHING billed out if they drop you for any other reason than your own failure to perfrom. This way, if year one is huge, they cannot use their out-clause to go after a more attractive offer... and cheat you out of the two years which could offset the big one.