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Unlimited plowing

Discussion in 'Business Fundamentals' started by Jaysled, Oct 9, 2011.

  1. Jaysled

    Jaysled Member
    Messages: 54

  2. Banksy

    Banksy PlowSite Veteran
    Messages: 3,113

    $60 bucks to plow one driveway an unlimited amount of times per month? Are they ******g serious?

    I'm sure these guys don't have a single plow. They are a middle man who collects $130 for the driveway, they keep $70, and pay you $60 for the month with unlimited plows every 2 inches. I can't even see low ballers biting on that.

    I wonder if this business would interest the IRS about the whole independent contractor thing.
     
    Last edited: Oct 9, 2011
  3. Plow man Foster

    Plow man Foster PlowSite.com Addict
    Messages: 1,153

    There is a guy around here going for $125 a season Unlimited pushes, Front walk, In front of the garage and salt by request 6 times a season. My customers ask me if i can beat that price and i say "NO!" I dont say anything about him all i say is just know when your sub is plowed (by me!) and your driveway hasnt been touched ONCE during a 5+ inch storm yet you'll know why. Its because you're going to be number 500 on his list.

    These guys just dont get it! First off you're working for 1/(3) Or 4th the "normal" price.
    You have plenty of volume but you're working you @$$ off for less money!
    After you pay for Labor, maintenance, and other fees you're Left with NOTHING!
    In some cases they are paying the customer for them to plow their driveway!
     
  4. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    we do drives starting at $65/month for unlimited removals including walks, but most of our drives are 40x20 type drives, and we do them by hand. And just to give you guys a heads, we make pretty great money at it.
     
  5. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,507

    What? No disrespect Buckwheat, but that's crazy talk. Explanation please.
     
  6. kevlars

    kevlars Senior Member
    Messages: 407

    $65/month? Is that billed 12 months a year???:laughing: No, seriously, what months do you charge for?

    kevlars
     
  7. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    we bill $60-$100 per month (depending on the size of place) from November to March, and charge a half price for October and April if we get snow in those months, we average 5 times/days a month doing snowfalls over 2 inches. I send out 2 man crews, usually with shovels and blowers. My crews can do 6-8 places a hour average. Now the important part about this is that it gives me a secure monthly income. Most of my larger commercial, and condo units are done on the hour or per time, so even if we have a bad month, we have to have more then 10 times done before I start losing money on residential, in the meantime, my commercial and condos are making me great money, so I still make great money. This model may not work for everyone, but either way it is a win for me. If we get little to no snow, we still make good money on residentials, if we have a heavy snow month, we make money on are large stuff. I am going to offer a example of last Novemeber, although I don't normally share numbers.

    Last November we lost money on residentials, about $3000 in wages. Profit (this is after expenses) on all my heavy stuff, $40 000. Now lets take a month where we don't have any snow, we make $11 000 which is more then enough to pay guys and overhead bills for my buisness, even if we don't do one bit of snow.
     
  8. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    Everyone has different business models & different ways of looking at things. If you search on residential drives you will find this. Combine this with different market pricing, amount of competion, value of a dollar in different markets, etc.
     
    Last edited: Oct 10, 2011
  9. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    It's not a bad price for a seasonal contract. 650.00 for the season.
     
  10. Neige

    Neige Sponsor
    Messages: 2,197

    Thats what I was thinking, hey GV how would like to do business like this NSP and make $350 for the season. Have no equipment, office labor only, 0 capital investment, 0 fuel, 0 repairs and 0 risk. I think these guys are onto something.
    Thats $40 more than I make off my seasonal contracts, and I have the same office costs as them, then I have the capital investment of equipment, the labor, fuel, repairs to equipment and property, the staking, and all the risk.
     
  11. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    Def. volume. We are looking into monthly billing next season instead of the traditional seasonal one time bill. There's going to be months where you eat it big time and months where you make out. But for 60 bucks they better be tiny, single car driveways. Again, pricing is so all over the place it's tough to say if it's a good price or not.
     
  12. Neige

    Neige Sponsor
    Messages: 2,197

    I am curious Brian, why go for monthly billing instead of a one time bill? If we were to go that way we would just increase our office work by 6 times. Once you go to monthly billing will the client have the option not to take November and April, leaving them only 4 months of service to pay for? One of the greatest lessons I learned from SIMA at a snack and chat was to charge my clients up front, like a retainer fee. Today is the last day my clients can receive a 5% discount for paying up front the total amount. Its our Thanksgiving today so it may take up to Thursday before all the mailed checks will be in at the office. The last 3 years we would have around 60% of our clients take advantage of this rebate. As of last Friday we had 1695, so its looking good to hit our target number again this year.
     
  13. Jaysled

    Jaysled Member
    Messages: 54

    Sorry Guys, I thought those were seasonal rates, I jumped the gun to quick. I found a local guy with a similar web site and got the two confused here is the one I wanted to post. http://rochester-snow-plowing.com/ Check out the seasonal rates.

    GV and RLM, since you guys are local what are your opions of the $200.00 Unlimited rates?? I have spoke with a few potential new customers and that is what people want?? I personally think that is way to low. RLM I have seen some posts about you purchasing a tractor with an blower is your plan to charge a permium for that type of service?? Sorry forall the questions thanks!

    BTY the monthly billing looks pretty attractive the only think is if we have a low snow winter with no snow people may not pay the bill?
     
  14. Neige

    Neige Sponsor
    Messages: 2,197

    That is the number one reason we have pay up front for the season. No chasing money, changing routes mid season, just way to big a PITA. Really for most areas is asking to pay up front $300 for the season unreasonable? Not much risk if you ask me for the client.
     
  15. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,507

    Buckwheat, thanks for explaining.

    I guess the biggest obsticle around my area are city sidewalks and or walks from the drives to the front door at almost every residence. Most customers want everything done, drives and walks. I know some of the larger landscape firms have tried the "Drive only" approach to snow removal with reguards to residential but it hasn't worked out.

    Once you throw walks into the mix, you can forget about volume. I can honestly say I don't have the answers for these low price seasonal tactics.
     
  16. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    I agree 100%, once you add in sidewalks forget it! We have several accounts in an area where there are very few sidewalks and we can bang out 15-18 driveways in about 45 minutes but we added a few with sidewalks, not even full sidewalks just walkways from the drive to the front door and those 3 or 4 accounts added about 15-20 more minutes just in shoveling onto the route plus everyone complained they had to get out of their truck. I think you have to have most accounts with walks and hire a sidewalk guy or no walks at all.
     
  17. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    We actually do front sidewalks with this pricing too. To give a example

    Front of house, walkways front and back, no driveway or very small driveway $60

    Front of house, walkways front and back, single driveway $75

    Front of house, walkways front and back, double driveway $90

    Front of house, walkways front and back, large double driveway or corner lot $110+

    We have fairly tight routes, and average about 6-8 places in a hour hand shovelling them, that works out to approximately $80/hour on average that a 2 man group is making me, that is $40/employee. The average employee is making $15/hour, and plus insurance etc, my break even with employees is $20/hour, before I start losing money on them, so that is 10 events. But like I said before at that point my per hour/per push stuff is making me so much money, I can afford to lose a little on hand shoveling residential. And as a whole over a entire winter I always make money.
     
  18. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,507

    You are working really cheap, but as you say, overall you make money. I make about $100.00/Hr on each employee for residential, but I'm sure I have less accounts than you. Also, my number goes up at 4", 7", and 10". My costs go up as well, but not significantly. I pay the same wages/Hr that you do - ($15-17/Hr).

    Interesting how things work for different people in different areas. I know one thing, these services should be worth more than they are!
     
  19. Neige

    Neige Sponsor
    Messages: 2,197

    When you say $100/hr does that include them using some kind of piece of equipment.
     
  20. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,507

    Yes, truck with front and back plow, snow blower for walks and shovels.