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What if they can you a month into the season?

Discussion in 'Bidding & Estimating' started by mr hydroseed, Nov 9, 2006.

  1. mr hydroseed

    mr hydroseed Member
    Messages: 53

    I gave a bid today to a small shopping center. As I was walking into the presidents office I quickly checked the price, "Wow, I went that low?" Now I'm starting to second guess myself, oh well. The expression on the guys face was, WOW! this is a great price. Then as we small talked for 20 minutes, he tells me a story about the Company that plowed 2 years ago, they did a terrible job and he fired them after the second storm. I'm starting to get concerned now. The bid was for $5k, I think I should have gone $6k, but I wanted it. I was thinking before that I wanted 6 payments Nov-April. What if we get a ton of snow in December like we did last year and he says, "I don't think its working out" Now what? I'd like to say that the $5k is due first, but I have a feeling that won't fly. What about 1/2 now and 1/2 Jan 1st? What kind of legal jardon do I need to use to protect myself here?
     
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    I have on my contracts, This proposal maybe withdrawn by us if not accepted within x days.
     
  3. Mick

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

    You're second-guessing yourself, which leads to nothing but trouble. You made a deal - if he goes for it, don't look back. You should have the payment schedule established by this time, whether it's half up front and half in Jan or so much monthly. Don't worry about it; if he takes it, concentrate on professionalism. Show him why he should stick with you next year, when you'll have had an opportunity to determine if you really were too low or not. Address his concerns, keep them in mind through the winter.

    Remember - you probably got the job by being the lowest bid. Worrying about what might have, could have or should have will accomplish nothing.
     
  4. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876


    This is the kind of crap that pisses me off about this business.

    What gives any of you the right to expect anyone keep you as a service provider if they dont want you providing service.

    What a joke.

    Its just another reason people look at service providers in this "game" as being schmaltzy and dishonest.

    Length of service contracts and anyone who thinks they deserve to handle an account even if the owner doesnt want you just drive me buggy, and why I advocate being compansated for work performed on a per visit basis.
     
    Last edited: Nov 9, 2006
  5. glenspot

    glenspot Senior Member
    Messages: 255

    I think your question, though, is that you negotiaged a yearly price...and are wondering what to do if the customer fires you before the whole winter is through?

    If I am reading this right,....you are saying the possibility exists that you could have a REALLY hard December, and maybe that december was the worst month of whole winter. So how do you break it down as to what he owes you?

    Another post said that THIS is the reason he does a per-visit rate. I agree with that, but you can't look back now......

    Also, does he pay up front? in regular monthly installments? or at the end of the season?

    If it is agreed that he pays in regular monthly installments, I think you are stuck pro-rating a dollar value to each day. Say he pays $1,000 a month from November - March. If he calls on January 6th and fires you. He owes you $1,00 for November. $1,000 for December, and there are 31 days in January. So $32.26 for each day of January that you were his plow contractor. (Which was January 1 - January 5) or $161.30.

    I would use the same system wether he pays in advance or at the end of the season. You must have some dates in your contract as to when the snow season starts and when it ends?

    If you haven't presented him with a contract yet, you can add in anything you want. You can create a per diem charge (what it costs per day for you to be his plowing contractor)... you can also create a pre-cancellation penalty of a certain amount of money. For example:

    EARLY TERMINATION PENALTY – Based on this contract; laborers, stockpiles of supplies, equipment and other elements have been hired, purchased or reserved for work at your location. Because of this expense client agrees that in addition to any outstanding balance and in exchange for early termination of this contract a termination fee of $xxx will be paid to Contractor within 5 days of contract termination.

    That keeps him from jumping ship to the next guy because he's a couple hundred dollars cheaper...
     
    Last edited: Nov 9, 2006
  6. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    There ya go. Have an early termination penalty.

    lol

    Just dont even show up, sell your plow and when he wants to cancel tell him theres an early termination penalty, and you dont even have to leave the house.

    Per diem charges for what it costs you to sit at home and drink coffee.

    I love it!

    You guys are somethin else man.

    On the off chance ....did all you guys used to work for a cell phone company or something?
     
    Last edited: Nov 9, 2006
  7. glenspot

    glenspot Senior Member
    Messages: 255



    Bitter are we?

    Obviously, if either one of you don't uphold your end of the contract you can terminate the contract without any kind of penalty....If he doesn't pay you can tell him that you will no longer be providing services. And if you don't show up or don't hold up your end of the contract, you are in breach of contract and he is under no obligation to pay you for services not performed.

    But, IF you show up every time, plow professionally, bill accuratly, and treat everyone with utmost respect... Then the guy decides in late january to fire you and hire his nephew, he will have to either pay you for what you have done.

    At issue in this whole discussion, if I am understanding the original question, is what to do in the case of a seasonal contract price. How much do you charge....

    So, LLM Ann Arbor, tell me this...

    If you are part way done with a lot you are plowing and you charge "per visit"... its part plowed and part unplowed.... and the owner runs up to your truck and says... "oh, i meant to call you... I don't want you to plow for me any more. You're fired." What do you charge him for the work you have just done? Do you walk away without getting paid? Do you bill for the whole amount? Do you charge him for half? And keep in mind we are talking about a possible scenario......not wether it WILL happen.

    The original question was about a scenario, too.. "What do i do IF"......
     
  8. Rcgm

    Rcgm Senior Member
    Messages: 613

    I am with LLM on this one.The old saying is you made the bed sleep in it.I have under bid stuff before in my past but I did the work to 100 percent satisfaction even if it cost me money.The one contractor has a clause in his contract of a EARLY TERMINATION PENALTY?What is up with that if you do bad work or don't show up and they want to quit they pay a early termination penalty?I have been in business for 11 or 12 years and now I know why I have been in business for so long because I don't use CRAP like that.I don't mean to come down hard on any of you but come on guys


    RCGM
    Brad
     
  9. glenspot

    glenspot Senior Member
    Messages: 255


    Apparently everyone is missing the POINT here... if you perform substandardly and are in breach of contract then OF COURSE you SHOULD be FIRED.

    What he (and I) am trying to get across is... if he signed for a SEASONAL amount at ANY agreed upon price and after 1 month of plowing the guy decides to go with someone else..... how much is he owed?

    The termination penalty is there to keep people from price shopping after THEY have agreed that you will provide service for them......here's a scenario.....

    You have a great fall and sign 15 new contracts.... GREAT...with that many new contracts you go out an buy an additional truck and hire an additional driver. After all, you are a professional organization and intend fully to serve these people as well as you promised them....

    Well, they get their first bill...and start talking to their neighbor...neighbor says "my kid will plow your driveway for gas money."....... so (unlikely).....10 of the new 15 call up and cancel you after 1 month of service. Not because you were bad, or didn't plow or didn't do what you said...but because they had what amounts to "buyers remorse"... .

    with a cancellation penalty they might think twice about price shopping and backing out of the contract....


    And again....his original question wasn't "can I change my price"....he regrets giving him a lower price than what he wanted...but he can live with that.. What he's worried about is getting let go before the season is over and how to determine what is righfully owed him.
     
  10. Rcgm

    Rcgm Senior Member
    Messages: 613



    I would like to answer this question if I was plowing for someone that had a contract and they stopped me in the middle of a plow job and told me that I would tell him you know we have a contract and until I get it in writing I will continue to service this property.If you want to give it to me right now in writing I will leave.Service must be paid for within 5 days like stated in my contract if you are terminating contract.Then I would bill him for what I have done move on down the road.I have enough work to keep me busy and I have never had a situation like that before.But that is how I would handle it.If I had a contract with a snow removal service that had a early termination fee in it I would not sign it and if I did my Lawyer would eat that contract for breakfast lunch and dinner for a week.


    RCGM
    Brad
     
  11. glenspot

    glenspot Senior Member
    Messages: 255

    And the question remains......how would you determine what that amount would be? Do you charge for half the lot? the whole lot? do you charge for a quarter of the lot? do you not charge him at all?

    You and I both bill on a per visit basis... but mr hydroseed apparently charges a yearly fee.... his question is... how to determine what is owed if work is stopped part way through the period.

    Again, does he charge for a month? a day? half the amout? the whole amount of the contract what?
     
  12. Rcgm

    Rcgm Senior Member
    Messages: 613

    I got all that I was just saying double and triple check your numbers because it makes all of us look bad in this business when former snow removal services and landscapers never show up for jobs that they under bid.Charge him per push you can't go wrong that way.I don't do seasonal contracts.But if I did I would want 100 percent up front.Every contract has to have a way out mine is give me a written notice once I get it I am done you have 5 days to pay me for services performed.



    RCGM
    Brad

    Like I said before don't take NONE of this to heart it is a forum and everyone has opions.This is a way for everyone to learn do's and dont's

    RCGM
    Brad
     
  13. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    Of course I bill him for work provided, and Id get paid too. Id say Im sorry it didnt work out, and recommend a friend who needed the work and might be able to please them.

    Im bitter only in the sense that a lot of you guys somehow feel entitled to this work. Asking people to sign rediculous agreements et all.

    I guess if you can get people to agree to your terms and fully understand them thats fine.

    I just know for a fact you contract guys love to sell this stuff and hope like hell it never snows an inch, and sit back and wait for your checks.

    I guess Im going about this all wrong simply billing my people for work performed and allowing them to cancel at any time with reasonable notice in writting or verbally.

    Now I dont mind getting a check for my birthday from Aunt Lil, but I could never in a million years "force" someone to use my services or bill someone for work I never performed, or charge per diem fees for estimating a job and watching the weather channel.
     
  14. Rcgm

    Rcgm Senior Member
    Messages: 613

    I would say HALF if it was half way.But it could not snow at all the first half or 100 inches the first who knows.If you are worried about it get half your money then the other half in the middle of season.Go with your gut if you think he is a crook back out.But don't back out because you think you under bid it suck it up and do the job and it will come back around to reward you in some way.

    RCGM
    Brad
     
  15. Rcgm

    Rcgm Senior Member
    Messages: 613

    Did you read my posts LLM? I am doing these same shady business practices as you :D


    RCGM
    Brad
     
  16. glenspot

    glenspot Senior Member
    Messages: 255

    I must be a complete idiot... because I can't seem to get my point across. Apparently my command of the english language is not what I thought it was.

    Somewhere you all got the idea that we want to be paid for work not performed... I'm not sure where you got that from...but that seems to be where we are.

    First, read your cell phone contract... know what it has in it? A cancellation penalty...(most do, not all)

    Read your mortgage.... there is probably an early payment penalty.

    If you don't own your home, read your rental agreement...know whats there....a security deposit. That protects the landlord in case you do damage, but also in case you break your LEASE..(or contract)

    They are all there to discourage you from breaking the contract without good cause. That is what the early termination penalty is for.

    For a minute separate yourself fromt he termintation penalty, though...because it was a suggestion I had.....but not something he currently does. What is happening follows:

    And I will try to walk everyone through this scanerio again...but I'll do it "first person"

    Lets assume that I charge $100 per visit to plow a lot... The client runs out and says..."stop plowing, my son is going to do it for me instead." I politley say "Okey Dokey. You owe me for last months bill and I plowed a third of the lot so far....so you owe me $30 for today.... I'll send you a bill" he says..."no way! I'm not paying you for today... You weren't supposed to plow anyway... "... I say "sir, up until you fired me I was contracted for plowing and I feel I have plowed 1/3 of this parking lot"...

    Translate that into a SEASONAL price.... We agree on $5000 for the season, but that he will pay the whole amount at the end of the season. Around January I get a letter that says "stop plowing, my son is going to do it for me instead" I politely call him and say, sir thats great. I wish you the best. Now, kindly pay me the $_______ you owe me."

    As I understand the original question.... What dollar value do you put there in regard to the seasonal contract?
     
  17. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876


    Right on.

    And were both going to get our shoes broken for saying it too. I dont care.

    I wish I had 12 years in business doing fair business like you Brad but Im only in my second year and struggling to get my own accounts and am working for guys that do exactly what I hate. ( I have 27 years in the green and white industry however) Im thankful for the work. Sometimes a little fired up about subjects here on the board, but I refuse to feel entitled or deserving of some of the things people expect the client to put up with here.

    And I bet.....you can verify. When you tell people your method, they are relieved and in total agreement and were sick of these heavy contracts with provisions protecting the provider, and a bunch of numbers and basically threats.

    Everyone I explain it to...Gets it. I may not get the job on price or whatever, but they all agree its a refreshing approach.

    Hell Ive seen guys here and at LS with four page contracts written by overpaid lawyers.

    :dizzy:
     
  18. LLM Ann Arbor

    LLM Ann Arbor Senior Member
    Messages: 876

    It's funny you mention the cell phone deal Glen and if you go back to my first post I actually included a deal on that....before you posted your last comment. lol

    And yes.....there are others that have early termination fees, and while I totally dont agree with them either, sometimes you have to go along with it because theyve got you over a barrel.


    I dont want to be someone who has someone over a barrel and intimidates them, like Im intimidated by Sprint, Washington Mutual and my credit card company.

    And I never will be even if it costs me a reputation here, or my business.

    I refuse to do that.
     
  19. Rcgm

    Rcgm Senior Member
    Messages: 613

    I understand your scenarios.He needs to get half up front.I answered your question 3 posts ago.You do the work you get paid but he should not do a whole season before getting any money thats how new people in this business get screwed.I am not saying any of you are new either.Half the work he gets half.Quarter of the work quarter of the money.All the work?All the money :D

    IMO contracts should be good for you and your customers.9 times out of 10 you do the work you get paid a d the contract stays laying in the filing cabinet.


    Take Care all I am off to the sack and never going to look at this thread again.LOL:D

    RCGM
    Brad
     
  20. glenspot

    glenspot Senior Member
    Messages: 255

    And again, if I understood his original question....how does he determine what that DOLLAR AMOUNT IS..


    Which is where I suggested a per diem. What EXACTLY does the client owe him? How does he figure that out? Is December the middle of the season or is January? Is November the start of the season or does the season start when it first snows? If it doesn't snow until December, and they guy has already made his november & december payment (2 of his 6 equal payments) ...then he cancells you after plowing 5 times... do give him a refund? Do you keep the 2 equal payments he has made? what?


    He has a legitimate question, I think.