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Seasonal contract with overage.

Discussion in 'Bidding & Estimating' started by PerfiCut Inc., Feb 23, 2008.

  1. PerfiCut Inc.

    PerfiCut Inc. Senior Member
    from Eastern
    Messages: 161

    I've done a search and found a tons of conversations regarding seasonal contracts, most pertaining on how to even come up with reasonable quote. Which raises two questions, the first pertaining to the above.

    Why not come up with seasonal rate based on however it is you base it on. Then include an overage clause. Something to the effect, that in the event 'X' number of hours, or events has been reached, then a per event rate will apply, or a per hour rate will apply. You can offer a discounted event or hourly rate if need be. But this way your sure to cover yourself if the season brings an unusaully higher number of events. Just a thought. We did something similar for seasonal lawn contracts.

    My other question is how do those of you who are using seasonal contracts, bill?
  2. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,032

    Your average snowfall/year is usually your basic contract and then it's based on a/" price after that.
  3. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Dear Mr Plow Guy, Last year you billed me for extra work because of higher then normal snow totals. This year we had a very lite winter with lower then normal snow fall, here is my bill for a refund that you owe me for not plowing!

    Thank You

    Your Customer

    Moral of the story.

    You live or die by the seasonal contract.
  4. kcplowmata

    kcplowmata Senior Member
    from kc
    Messages: 174

    Seasonal means for the season not the amount of snow or ice. Seems this winter and salt shortage has got some of us rethinking how we do seasonal contracts.
  5. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,032

    I add a limit to snow to protect myself in a very bad winter. In a less then normal winter my costs really aren't that much lower, I still have to have the man power and all the equipment. You would be surprised how easy it is to get people to go along with this, all my snow totals are taken from the airport, so it's not like I'm making them up. All my contracts do include salt and all snow relocations so I have to protect myself. If I was just offering snow plowing seasonal, I would be fine with one set price for the winter. JMO
  6. Woodland

    Woodland Senior Member
    Messages: 269

    I don't have any seasonal contracts left (thank goodness this winter!) but I was thinking of doing something similar for next year, with any new clients at least.

    Since most of what I do is residential and they seem to like per push I was considering putting a minimum number of events in the contract. I.e. they will get billed for each visit, but in the event I don't plow the stated minimum times, the customer would receive a supplemental bill to cover the extra visits to reach the minimum. Example, our average here is 10 to 12 events per season, so my contract might state that the customer is charged $50 per push with a minimum of 8 pushes for the season. If at the end of the season they only got plowed 6 times, the would receive a supplemental bill for $100 (8 minimum - 6 pushes = 2 x $50).

    The rationale being, it costs me money to be ready to plow them out in the winter. They are in essence guaranteeing that I stay in business in order to service their property. If I had to take my chances that we don't get a dry season, I might need to take on more accounts and thus, might not be able to services them all at such a high quality.

    By keeping the minimum number slightly below the average, it reduces the likelihood that the clause would come into play while minimizing the pain of a dry season.
  7. AbsoluteH&L

    AbsoluteH&L Senior Member
    Messages: 573

    Around these parts season contracts go from 12 - 20 trips. Not many, if any, do unlimited. Mine are 15, if we get more, they get an end of season bill.
  8. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    Grandview said it best.

    You can't call them Seasonal Contracts if you put limits on them. You should not be selling seasonal contracts unless you have accurate records of how many times you plow in a year. Then you take that number times your per push rate and you get a seasonal price. You don't complain when it goes over and the customer doesn't complain when it goes under.

    You should also have a mix of seasonal and per push contracts.
  9. curty85

    curty85 Junior Member
    Messages: 16

    I like the mix idea. Here in Souther Maine, I am really rethinking the seasonal thing this year also. We have been slammed with three times the normal amount of snow and events. I dont have a contract and have been running faithfully on my seasonal price. It hurts and I am thinking of calling my clients and asking them for another 50% of the seasonal price. I dont want to make the call, but I wouldnt want to get it either. Dont know what to do except suck it up. :eek: