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Understanding per inch rates.

Discussion in 'Business Fundamentals' started by Snow_Pusher, Oct 21, 2007.

  1. Snow_Pusher

    Snow_Pusher Junior Member
    Messages: 27

    The following is a post I ran across discussing per inch billing. I have a few questions for those using this method.
    "Here's how I've been doing it. No complaints in close to 20 years. This is for one of my lots....

    2-4" = $230
    5-7" = $280
    8-10"= $390
    11-13" = $460
    14" & Up will be priced according to storm

    This is for a lot that takes roughly an hour to plow and blow in the 2-4" range, another 15min to salt/calcium (thats extra, billed per lb.).

    Unless it's going over a foot, I'll wait and plow when the storm stops. If I do it twice, I'm covered anyway as far as money.

    Never had any complaints over how many inches fell. But then I never stretch the inches either. Around here most areas get the same amount withen an inch."

    If , in this example, the lot takes an hour to clear then the contractor makes out well if it only snow 2 or 3 inches and he pushes it once (Gross $230/hr). However, if it snows 6 inches and he clears it at 3" and returns again at 3" then he has spent 2 hours roughly clearing the lot. Now he grosses only $140 hour. Although still a decent amount given the time spent. But as you can see, the more times you have to return the less you make.

    How does this compare to how others are pricing by the inch?

    I suppose the idea behind this is that more light snowings occur than heavy snowings, so in the end you still make out doing well.
  2. Snowpower

    Snowpower Senior Member
    Messages: 636

    If it snows 4.5". What do you charge.

    I have switched almost exclusively pricing these kinds of jobs either per visit no matter whats there or X amount up to 6", and X amount up to 12". All the confusion in pricing makes my head spin.

    I've been doing this long enough to know that all I ever want is 3 inches of snow per night all winter long. No more. No less.

  3. fastjohnny

    fastjohnny Senior Member
    Messages: 653

    Every thing is PER PUSH, so on a 6 inch total storm, if he plowed at first 3, and then last 3, he bills 230 twice.

    also, I use:
    trigger-4.99 inches
    5-9.99inches x 1.5 x per push price
    >10 inches x 2 x per push price
  4. Mick

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

    Snow_Pusher, what you are talking about there relies on the law of averages. Also, pricing this way allows you to use your discretion as to when to plow. Let's take the case of two snowstorms, each which dump 10" of snow on your customer's driveway. The first one is a wet, heavy snow - so you plow at 6" and again at 4". You bill the customer based on the total snowfall - $390. The second snowfall is very dry and light. There is no other reason to plow it more than once, so you plow all 10" at once - you again bill $390. You "lost' on the first one, but "won" the second (by using discretion). So, overall, you're happy and the customer doesn't care one way or the other.

    Really, the snowplowing business is all about "averages". And just like any other game that relies on averages (or chance) - sometimes you win; sometimes you lose. There are ways of "hedging your bet" (combination of seasonal and per push contracts) or "go for broke" by doing all one or the other (imagine having ALL seasonal contracts and never gettting enough snow to push even once).
  5. cet

    cet PlowSite Fanatic
    Messages: 7,196

    I think he bills once for $280. He chose to do it twice but the billing is for the amount of snow in 24 hours. Thats my guess.
  6. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    That sounds a little greedy...lol.. I've been saying 3" every OTHER day. I need a chance to rest.

    My question is where do you stick the ruler when you get to the lot/driveway? I have some places that drift to no snow and in the same lot there is a 2' drift. We also have a news station right in town that will say the amount of snow on any given storm. Do you base it on that? Do you have the owner come out and look with you? Snap a picture for proof? How many times have you been on the edge of the price change and then re-measured in a different location to put it over the edge? I'm not saying anyone has ever done that, just wondering.

    All my prices are a straight cost no matter how much snow there is. Law of Avererages as stated above.
  7. Snowpower

    Snowpower Senior Member
    Messages: 636

    I stick a ruler in the deepest snow I can find, of course. payup No, seriously. It's never been an issue and is always fairly played one way or the other. In my agreements be they verbal or written I state that weather broadcasts are not used for determining the amount of snow accumulated and subsequently removed from your site.

    People are very familiar with the fact that snowfalls are different even within a reasonably small area, and that they generally get the benefit of the doubt from me and treated fair.
  8. Dhouse

    Dhouse Member
    Messages: 74

    I use the same pricing method as snowpower never had a problem with it.
  9. Mick

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

    Some larger outfits subscribe to a service which will record the depth for any given area. They use that for billing customers in that area. What I do may sound unfair or something, but it's worked for seven years so far. When I pull out of my garage, I stick a tape measure in the middle area of my parking area. Whatever that measures is what everybody on my route gets billed for. I'm on a high spot and surrounded by trees so there's no drifting. If anyone were to object, two things would happen - I'd invite them to measure for themselves the next time I'm there at 4:00 in the morning. Course, they'd have to wade through the snow to get to where I was to measure. While they were there, I'd suggest they find someone else to plow before the next snowfall. But I also give the benefit of the doubt if the measure is close to a cutoff point.
  10. Snow_Pusher

    Snow_Pusher Junior Member
    Messages: 27

    I can understand if each push is billed at that particular depth, then sure, a per inch method might work fine.

    I was under the impression, that people who use this method, plow as needed, maybe only once, maybe two or three times a night. Then a bill is generated at the total snowfall for the night. This would not make sense, if you had multiple visits becuase now your cutting your hourly or per push rate by the appropriate multiplier.

    I guess I was misunderstanding the billing technique here.
  11. Mick

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

    Snow Pusher, think of it this way - Which would you rather push, 4" or 10"? It depends, right? If the 4" were real wet and heavy, it could actually be harder on the truck and plow (and operator) than 10" of light, fluffy stuff. So, by charging by the number of inches per snowfall in, say any 24 hour period, you get to use your discretion as to when to plow. If you charge so much for everytime you plow, the homeowner is going to want you to wait till it's over so they only pay once. If you say I'll plow every 4", you're going to cheat someone. There is no way you're going to plow your whole route when every place is exactly 4" unless you've only got so few customers you can plow them all in a half hour or so. Again, it comes down to the law of averages - sometimes you can plow 10" of snow only once and sometimes it's going to take two or even three. So, sometimes you win and sometimes you lose.
  12. Snowpower

    Snowpower Senior Member
    Messages: 636

    You didn't misunderstand anything. Thats often times how it works. More often than not as a matter of fact. We all want to get the same amount each time we plow and its easy to assume that its the same amount of work each time. It's not always.

    But you are right when you say that plowing tewice in one storm cuts your per visit price down. It does sometimes. Its just the way it is. It is exactly why I always say I want three inches a night every night. No more. No less.
  13. Snow_Pusher

    Snow_Pusher Junior Member
    Messages: 27

    We have one or two accounts that are on a similar scale. We plow them as we get to them, maybe its 3 inches the first visit, or it may be 6 inches the first visit, depending on how snowfall rate and how long it took on previous lots before we get to these customers.

    We bill these customers at a whatever the rate is for the depth of snow at the time of the visit. If we have to revisit we bill it seperate based on the depth at that visit. Works ok although I anticipate it only a matter of time before they dispute the depth. Generally I give them the benefit of the doubt.

    Otherwise, I prefer to stick to a per push. If we get a long heavy storm 8" + then we will usually visit each site twice anyway. A quick once through at the 2-4 mark, then a follow up visit to reopen and cleanup. Most of our routes are about 6-7 hours so this works out to about 14 hours of plowing.
  14. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    Ideally you want to push at the most profitable depth atleast once per storm. If its 2-4 and there is already 6 on the ground when you get there, then you hope for another 2-4 to fall. If you are really lucky then it is a slow snow storm and you push at 2-4 in the a.m. and 2-4 in the p.m.

    Would it be accurate to say that you charge the price for what ever the depth is when you show up and not the total depth of the storm on a per inch bid?
  15. Leisure Time LC

    Leisure Time LC Senior Member
    Messages: 723

    my prices are per push, and I start at 3" if we get 2 additional inches after I push the initial 3, I have to plow again and they get charged twice.