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seasonal contracts

Discussion in 'Commercial Snow Removal' started by plowguy98, Jan 29, 2012.

  1. plowguy98

    plowguy98 Junior Member
    Messages: 1

    This will be my first seasonal contract bid I've have done and It's a big one. Could use some advise.I'm bidding it for up to 30 in. of snow and after that so much an hour.
    Do you ask for half of the money up front for a deposit or what and say if I dont get 30 in of snow, Do I bill them for the rest of the money any way or charge them for the amout of snow we got.
     
  2. JTVLandscaping

    JTVLandscaping Senior Member
    Messages: 860

    I like to get paid monthly, taking payment from November until April. As far as you 30" clause, I don't do it that way so I'm not qualified to give advice on that.
     
  3. lawnkale

    lawnkale Senior Member
    from Indiana
    Messages: 156

    a season contract is a risk...But u never bill any more or give any back....Sometimes it works for you sometimes for customer but always works out in the end..Know your region averages and bid based on that...Dont bid off the lowballer that had it last year as he prob lost it cause he lost his ass!!!!
     
  4. AuroraMSP

    AuroraMSP Senior Member
    Messages: 165

    I'm same as JTV. I have a seasonal. I figure out what I think it would cost per plow, multiply that time 3.5 plows per month and multiply that by 5 months (Nov-March). Then divide the total by 5 and bill them that each month.

    You win some years and on big snow years, hopefully you at least break even. Over the long haul, it works just fine. As some security, it's always good to have some per plow contracts mixed in with the seasonal contract to offset big snow seasons.
     
  5. JTVLandscaping

    JTVLandscaping Senior Member
    Messages: 860

    I used to take payments only until March, but decided that the weather in April can be so wet (like last year) that I may not be doing any mowing or cleanups yet, so those April payments carry me through a potential dead period.
     
  6. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    What he's doing is a seasonal with a cap. I'm an all in guy,don't matter if I get 1 inch or a 100 inches ,no additional payments are made. Are you saying 30 inches for the season,or per storm?
     
  7. Flawless440

    Flawless440 PlowSite.com Addict
    Messages: 1,543

    Im reading 30" for the season then hourly after that. Seems safe, i like it... What about salt after the 30???
     
  8. Earthscapes

    Earthscapes Senior Member
    from WNY
    Messages: 577

    Not sure how big, "BIG" is to you, but this is how I have been doing it for over 10yrs.

    $ 1 - 2,499 - 2 payments- 1st with contract. 2nd due by Jan 15th
    $ 2,500 - 4,999 - 3 payments - 1st with contract, 2nd due by Jan 15th & 3rd March 15th
    $ 5,000 - 10,000 - 5 payments - 1st with contract, Dec - March 15th of each month
    $ 10001+ - 6-payments Nov - April 15th of each month

    If you salt & its not included in contract, then you bill that per month.

    Seasonal is the way it is around here. I have NEVER lost money & never made a killing until this yr LOL

    Price em right & Treat em right, you should never lose em. Good luck
     
  9. Dogplow Dodge

    Dogplow Dodge PlowSite Veteran
    from NJ
    Messages: 3,013

    Sliding scale is a great way of making a customer feel more comfortable about shelling out money.

    I do this whenever I do a large renovation for a customer, and on one job I had 10 payments, as the job was so large. The customer actually thanked me for doing this, as it made them feel as though the progress payments actually reflected the work completed....


    Which it did.
     
  10. Flawless440

    Flawless440 PlowSite.com Addict
    Messages: 1,543

    I don't understand how that works. Can some one explain.. seasonals aren't big here
     
  11. JTVLandscaping

    JTVLandscaping Senior Member
    Messages: 860

    I don't like the idea of a capped seasonal, then it seems like the contractor always wins and the property owner always loses. If I did it that way, then last year I'd be making more money, and this year I'd feel like I should be giving them money back, morally. Is it 30" at their site, or 30" according to the NWS? In Eastern Upstate NY, it might snow 10" at NWS Albany but in a good coastal storm 15 miles East might be 20."
     
  12. Deut2210a

    Deut2210a Member
    Messages: 39

    we sell 365 day contracts

    I allows us to sell the equivalent of a seasonal contract all year long and Lord willing, get repeat customers the next year.
     
  13. Earthscapes

    Earthscapes Senior Member
    from WNY
    Messages: 577

    What don't you understand ? Can't explain, without having something to explain LOL.
     
  14. Flawless440

    Flawless440 PlowSite.com Addict
    Messages: 1,543

    How the sliding scale works
     
  15. grandview

    grandview PlowSite Fanatic
    Messages: 14,609



    He has it as ,lower priced contracts don't have the privilege of having their payments spread out.
     
  16. Dogplow Dodge

    Dogplow Dodge PlowSite Veteran
    from NJ
    Messages: 3,013

    I use a sliding scale.... meaning the greater the overall number or cost to do a project, such as renovating an entire floor (1st floor vs 2nd floor) of a home, vs renovating a bathroom (for example) I spread out the payments into smaller, but more frequent payments based upon how much the job is worth.

    Clients like handing out "smaller amounts of money" over time, then larger sums.

    IE:

    you do a lot that's 10,000 sq ft. You get $3000 for the season to push only. You get 1 payment before you start, and second payment 1/2 way through the seasons.

    Now you do another lot that's 50,000. You get $15,000 for the season to push only. You now divide that season into 5 payments of $3000, so that the property owner isn't handing you $7500 in the beginning and $7500 in the middle.

    Smaller payments more often as the price of the job goes up.= sliding scale

    That's how I do my contracting, and it works well. Customers are less apprehensive about handing out larger $ amount checks.Hopefully this works with plowing as well, although I haven't done any large jobs as such to find out.
     
  17. MatthewG

    MatthewG PlowSite.com Addict
    Messages: 1,390

    I would imagine light snow years such as 2011-2012 make it harder to sell a seasonal for next year
     
  18. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,953

    It shouldn't.....Most managers look at the big picture. They know what their average budget is. Seasonal contracts should be multiple year terms anyway so that last years heavy year, this years light year and next years average year is all a wash.
     
  19. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    Agreed.

    It's really hard to forget how bad last year was. I still have the occasional nightmare dealing with last years snow.

    ...
     
  20. Earthscapes

    Earthscapes Senior Member
    from WNY
    Messages: 577

    Thats totally wrong. We sell an insurance policy. Its no different than you paying for insurance. If you don't use your insurance does the price go down ?

    What will happen is "NEW" snowplow retards will come out of the woodwork & price everything low. Then we'll have a nightmare season like last year & they will all be outta business.

    85% of my commercial is multi yr, but I didn't put that down in my 1st post, as he wasn't asking about it.