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Why is pricing so low or am I out of my mind?

Discussion in 'Bidding & Estimating' started by MDLawn, Sep 7, 2013.

  1. MDLawn

    MDLawn Junior Member
    Messages: 21

    First of all I know why prices are low. Second I don't plow for business, but have for a municipality in the past so I know how. Have always thought of trying it but have too many reservations.

    Here's the thing that's in my head about pricing. I know a good friend who does the landscaping/plowing like a lot of people. He's got your average newer neighborhood 4-6 car lengths long and 1 or 2 wide. He gets anywhere from $350-$375 seasonally for this (had upped prices but people said they would just get someone else for snow). Maybe 25 drives so anywhere from $8700-$9300 per season (mind you he's a legit part timer for the entire biz). I have absolutely zero clue how much fuel would be used (gas or diesel) per event. Events probably ranging in the 15-25 events. So whatever you could come up with after expenses is it worth it? Being required to be available 24/7 and dealing with the BS of phone calls of "Where are you?". Plus if you actually choose to have some respect and use a decent truck and plow that's just more off the bottom line. I think too many "borrow" assets from their other business (landscape) rather than the snow part actually covering those expenses (commercial biz snow plowing excluded, only resi). I remember reading an article in some landscape/snow publication of a Minnesota landscape company that ditched snow removal as it wasn't actually paying for itself and was being subsidized by the landscape biz. He found this out after meeting with an industry consultant. I mean this wasnt some landscape company in Virgina dealing with a few minor snow events... In the 7 years I've been landscaping (part time also) I've never offered snow removal. And after asking clients what they pay they all smirk and laugh and give me some ridiculously low price. And they pay well for lawn cutting and landscaping. I mean for the cost of a new good snow blower you could hire someone for 4 YEARS to plow your driveway around here (WNY Buffalo area)

    One time I read a company on here (although it is the internet so believe cautiously) was at about $800+/season paid equally over 4 months. Or something like it. Now that makes sense to my brain. You want me to be available 24/7 that sounds better. Take my above example but with this number. $20,000. That seems right for being an "on demand" service. For you per push guys that doesn't exist around here. But you say $800 per year and you'll have ZERO work. Not sure why so many people snow plow. Either you have very low income needs or have such a different perception on income. I understand efficiencies and such and improving that to help the bottom line. But you may have a vehicle payment, insurance, plow, permits, and not to mention how plowing beats the snot out of very expensive to fix front ends. How are you recouping that and once again being an available 24/7 CONVENIENCE service???
     
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Well you know this area has a short landscape season as it is,so you need something to do. Each season should be able to support its self.
     
  3. MDLawn

    MDLawn Junior Member
    Messages: 21

    Grandview, I've read a lot of your posts and threads on PS and LS and I know you have your best interests in hand with both seasons. I know you no longer plow residential, and probably for the reasons I may have mentioned. I know people plow just because the landscape/construction season is short around here. But it would seem its more of a losing cause or just paying the bills until spring arrives when you're still broke waiting for clean ups and lawn contracts to floatin. Rather than having a surplus from snow removal to help the landscape business just as most landscape business float the plowing part.

    But what do I know. I don't even plow. I know how fast fuel disappears towing and would imagine plowing similar. But my main thought is still that 24/7 convenience service. Just like you may pay more for your soda and beer at the CONVENIENT store vs the further drive supermarket.

    Any and all opinions on this appreciated. Even if they are in disagreement.
     
  4. Pristine PM ltd

    Pristine PM ltd PlowSite Veteran
    Messages: 3,794

    Very valid post -

    We are in snow for only one reason - to keep our customers, and to keep our employee's.

    Winter is a lose lose for us. To much salting, salt in contracts, liability etc...

    We do about 50 houses in the winter, the rest of our work is commercial/condo

    Those 50 houses bring in about $20,000 which is ok, but doesn't really make it worth the risk and expense.

    $4000 a month is no where near enough for our overhead, but we cut all of these houses and some of them I have done since I was 12, so there is history there.

    If I owned my own business doing something that you couldn't do when it snowed, had 50 houses that I plowed with an owned truck and plow, and had a wife with a union job and benefits, then plowing houses makes alot of sense.

    For a business though, in Toronto, it is hard.

    Paul Neige makes it work in Quebec, but we are different markets. We have to shovel walks and in front of the garage.

    Anyway, just my thoughts.
     
  5. MDLawn

    MDLawn Junior Member
    Messages: 21

    Good post Pristine.

    So would you lose your other work to other good landscape companies who still plow on the low side? Or lose to "Mr. Plow" who can push snow out of the way but is a mess when it comes to summer property maintenance?

    Also with shoveling that is extra CONVENIENCE which should cost someone more!!! And it's not like you can sell on good work because it seems all the other good companies work on the lose lose situation.
     
    Last edited: Sep 7, 2013
  6. Dogplow Dodge

    Dogplow Dodge 2000 Club Member
    from NJ
    Messages: 2,875

    Pricing is low here too, and you are going out of your mind..


    Why ?

    Too many contractors doing snow removal... ease of entry into the business for residential.... Go out buy a truck, put a plow on your truck, and you're in business for plowing snow. Insurance ? Eh ? "Who needs insurance, as we just work for cash".

    No value perceived in snow removal service.....

    Most here feel that snow removal is a penalty for living in an area that has changing seasons. They simply think that it's an extra expense that they can use just anyone for as it's one of those "mis-perceived" classes of service that "just anyone can do". I've said it before that "no one... I mean no one (except for plow owners) is looking forwards to a long drawn out, snow covered winter, as it's just another looming expense, for which their money could be spent on elsewhere"

    I Service of my regular customers that I work for during the summer months, I associate with my contracting business. I take care of them, and in the spring, they call me for their latest & greatest HI.
     
  7. 90plow

    90plow Senior Member
    Messages: 737

    I think it depends on the level of service. I start at 35 a driveway up to 6" and $5 per inch after that. I dont get out of the truck i dont shovel one flake for $35 i have about 12-15 of those and then i have my high end $100-200 per push up to 6" and 10 per inch after that. Id take the 35 per push all day as i can not get out of the truck. Most times the homeowner has shoveled all the snow away from their garage and cars before i get there. Its fast money plain and simple. Now the driveways are just a route filler for me if i could dump them i would and stick to all commercial but even that pricing is dropping.
     
  8. MDLawn

    MDLawn Junior Member
    Messages: 21


    Good thoughts!!
     
  9. MDLawn

    MDLawn Junior Member
    Messages: 21

    Yea like I said I've not heard of per push pricing around here for residential. Also how are you gauging the inch level. Do you actually get out of the truck and measure? Do you go by the forecast numbers? You ever get someone who measures themselves and say your number wasnt right?
     
  10. MDLawn

    MDLawn Junior Member
    Messages: 21

    I know this is probably a question that won't get answered but we'll try anyways. With the driveway size I listed and the 25 accounts with an average snowfall each time of 6" and all accounts in 2 neighboring neighborhoods how long would that take you? Let's say half have the garage at the end the others have a side entrance garage so straight push up and off.

    Like I said I've plowed for a municipality when I was in high school and college. But those we parking lots with zero pressure to complete quickly.
     
  11. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Why do you have 6 inches of snow in the driveway? Faster to make 2 runs then one. Bop them out in 2 hrs with a seasonal price of 350 to 425 plus tax,if your a legit. 200 if not.
     
  12. cet

    cet PlowSite Fanatic
    Messages: 7,202

    A 6" average IMO would be high. Even still I will say 3 hours. You said 15-25 events, so average 20. At $350/season and 25 accounts that's $8,750 for 60 hours of work. If he were to take a full work load of maybe 50 accounts, making $17,500 is good money. I have 1 guy that plows for me, he looks after his equipment and he bought his truck and plow new in 1995 and still uses them to this day.

    If you are an owner/operator you should get at least 10 years from your truck and plow and still have selling value.
     
  13. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    A flip side is,say you don't plow ,now you have to put all your expenses into your summer work. Which in turn makes your costs higher and that means you need to charge more for your work and in the summer there are even more guys cutting and landscaping then plowing.
     
  14. MDLawn

    MDLawn Junior Member
    Messages: 21

    Great points.

    I agree with equipment lasting years. I see your point with the full account load.
     
  15. MDLawn

    MDLawn Junior Member
    Messages: 21

    Interesting thoughts although like I said in my original post there have been times where businesses let go of snow because it didn't pay for itself. It used the landscape biz to subsidize snow removal. But for a solo op vs business with employees it is probably different.

    But you're only servicing small commercial so you're rolling in it come winter. ;-)

    I also agree more mow guys than snow guys.
     
  16. cet

    cet PlowSite Fanatic
    Messages: 7,202

    I'm going to add if we were to buy trucks for the job instead of all these Lariat's, Denali's and and SLT's our overhead might not be quite so bad. I can see a long time owner having something nice but people just starting out, still living at home and driving CC trucks with leather and all the options is a little much.
     
  17. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Maybe that's the time to buy the nice toys:D
     
  18. cet

    cet PlowSite Fanatic
    Messages: 7,202

    It's the easiest time for sure.
     
  19. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    We all know whats happens when you get married!:drinkup:
     
  20. MDLawn

    MDLawn Junior Member
    Messages: 21

    Well half the people who do this stuff (landscape/plow) probably do it to justify owning a truck and a fully loaded one at that.

    I can't stand the jacked up trucks. Leveling, fine. But some "blinged out" truck riding on 35's-37's is ridiculous. Personal vehicle, fine. But everyday work truck? A, way too expensive. B, completely inefficient. C, you could have a fleet of good used truck for the waste of money in one truck. Or be running some more efficient equipment vs blowing money on lift kits, stereos, "mods", etc.....

    Phew what happened there? I think I blacked out.....
     
    Last edited: Sep 8, 2013