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Winter from hell

Discussion in 'Commercial Snow Removal' started by ALarsh, Feb 8, 2008.

  1. ALarsh

    ALarsh Senior Member
    Messages: 203

    I can't wait until this winter is over. For my seasonal contracts I judge that we will get 40" of snow, on average we get about 35". This winter we have already had 64" and more in the forecast. This is ridiculous and I will not be making nearly as much money off my seasonal which consist of 60% of my business.

    I will be restructuring my contracts next year to account for these problems in the future. I will no longer be offering a flat rate for the whole season. From now on you will either pay per push or you can pay up front for 10 snow plowings at a slightly discounted rate. If we get more than 10 plowings you will be billed for the difference.

    Either this winter better pass quickly or it will place me in my grave.
     
    Last edited: Feb 8, 2008
  2. mkwl

    mkwl 2000 Club Member
    Messages: 2,361

    I guess you're feeling the effects of getting the short of the end of the stick from seasonals. Most guys around here usually do well with seasonals (about 30% of mine are seasonals), because it doesn't snow much here. I figure with per push, people feel "safe" because theu only pay for hte work that is done, and I feel safe because I don't get screwed if it snows a ton! 6 of one 1/2 dozen of the other I guess :rolleyes:

    Send your snow this way- I need it badly!:cry:
     
  3. Brant'sLawnCare

    Brant'sLawnCare PlowSite.com Addict
    Messages: 1,754

    That's too bad. Just plow your per push accounts more than once each time! jk. I hope everything goes well for you. Have you tried explaining your situation to your accounts? Tell them you've gotten 20 more inches than you planned for and you just can't operate like that. I would try that. No sense in getting put under by snowplowing, which is supposed to be extra income. Good luck.
     
  4. procut1

    procut1 Senior Member
    Messages: 380

    Thats why we have an inch cap on ours
     
  5. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    That's about all Fishkill gets in a year!:rolleyes:

    I always base mine on 25 plows . So if we stay under a 100 inches everything is good.
     
  6. plowman4life

    plowman4life Senior Member
    Messages: 557

    we base ours on 17 plows. and in the contrat we state if the season enters a range of 21 or more plows you will be billed per push from event 21 to the end of the season.

    there is one account that we have that has a half inch trigger and must be salted daily when the temp is below 35 degrees F. this account pays us seasonally for 35 plows. and is billed monthly for salt applications. and has the same clause in it. except its at 38- end of season.

    that clause has saved us multiple times. but for the past 4-5 years it hasnt taken effect 1 time.
     
  7. WI OLY

    WI OLY Junior Member
    Messages: 16

    Normally I take on flat season rate contracts but this year no one was interested in that (thank GOD). Now let the snow come. Years ago I had season rate contracts where there was only one push the whole season. Made out like a bandit! Your rolling the dice.
     
  8. derekbroerse

    derekbroerse 2000 Club Member
    Messages: 2,377

    I find it funny how at this time last year those of us on a per-push basis were losing our shirts from the lack of snow that there were so many smug posts from people telling us it was stupid to do business this way blah blah blah you should have a seasonal contract since you get paid for doing nothing etc.

    Then you have this year, where snowfalls are HIGHER than normal and expected, and now the contractor is the one taking the fleecing instead of the property owners... How many postings are already on the board complaining about how its not fair, we can't work like this, we need more money, I'm tired and overworked.. blah blah blah...?

    Seasonal contracts, for the most part, are about ripping people off. Either the customer pays for work they don't get, or the contractor works without pay--either way someone gets the shaft for the year. Since the contractor is the one making the contract, naturally it is written in his favor.

    I don't think anyone should be complaining about too much snow and not enough money... did any of you return money to the customers last year, or the year before, when the snowfall was so low? Or was it all the attitude of "Oh well they signed the contract they owe me $xxx.xx whether I work or not."? If you didn't return their money, you have no right to complain and be asking for more money from them. Guess what, its their turn to get a good deal.

    The Law of Averages says its all going to work out in the end, one way or another. You just need to be able to ride it out longterm. Just my opinion, of course, but where I can I'll stick to PER PUSH because its the only fair way to get what you pay for, and give what you were paid for.
     
  9. Young Pup

    Young Pup PlowSite Fanatic
    Messages: 5,491

    I agree. Gets old with the complaints. Just deal with it and move on.
     
  10. KGRlandscapeing

    KGRlandscapeing 2000 Club Member
    Messages: 2,660

    anybody who makes a seasonal contract that puts a limit on events is just lame. they pay u for ur services provide them so maybe u lose alittle. at least they will still be with u next year.
     
  11. Neige

    Neige Sponsor
    Messages: 2,197

    We have been doing seasonal for a long time. It averages out very well. If last year I had worked per push, I would have lost money. I have to pay insurance regardless if it snows or not. I pay my employees seasonally its the only way to keep them. My equipment has payments each month. There are monthly costs to do snow removal. With seasonal contracts I am guaranteed money for my time and effort. With 2700 residencial accounts I don't see any other way. Next year I can raise my price in accordance, and it will be much easier to sign up my clients. I am in the snow removal business, I want it to snow, otherwise why hire me.
     
  12. DJ Contracting

    DJ Contracting PlowSite.com Addict
    Messages: 1,392

    All i can say is for seasonal contractors that are plowing more than expected, you should tap into your savings from years past (you did put some money away for years like this), take your lumps and wait till next year, don't complain your customers are finally feeling like they are getting there monies worth, it will all come around and we'll see all the post on how seasonal is the only way to do business.
     
  13. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Seasonal works good if your solo.Guys say their losing money plowing to much but if you think of it you'll have all the expenses either way. ex.truck payment,insurance,maybe a little more maintaining equipment and more in gas.That's why if your going to be seasonal you need to keep a tight route to cut down cost.
     
  14. Sno4U

    Sno4U Senior Member
    Messages: 480

    I have a couple of seasonals myself and am also in SE WI but I don't think you guys realize how much we're over our averages.
    Lets just put it this way-They are WAY UP! I don't remember a winter this deep and I've been around for awhile.
    I"M NOT COMPLAINING. After all this year we'll "eat it" but it's gonna be a heck of alot easier to ask for a increase in next years contract after this.
    I have a real mixed bag of how I charge so, I'll always survive.
    This probably isn't the best comparative but Lawyers charge a retainer fee-sometimes you need THEM and sometimes you don't but, they still get their fee!
     
  15. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,868

    Derek, I agree with everything except the part about ripping someone off. If you have the history and experience, as you stated, the law of averages works out and no one is ripped off.

    And the last paragraph, I guess. If it works for you fine, but I want to get paid for what I do to--not just plowing, but mounting plows, repairing plows in the fall, painting trucks from rusting, getting out of bed and checking the weather, paying my insurance, building a salt bin, storing salt, gambling on how much salt I am going to have to store over the summer, utilities, gas, fuel, PLOW STAKES, etc., etc. Seasonals are paying me for all this, and even my per push do because they pay a minimum number of pushes. They just don't see everything they get, because there's a shitload more work involved in this business beyond just pushing the snow, and I know you know that.

    I agree, to an extent. You just need to cover yourself by having a good mix of per push and seasonal. I don't have caps on mine, if we get 3" or 120", my customers are only paying extra if we get over 6" in one storm or for hauling and stacking.

    Exactly, see above, glad to see others 'get it'.

    Seasonal works for non-solo as well. I have 10 trucks plus subs, and it works for me.

    You're 50% over average, OK, fine. It happens, you shouldn't be basing prices on all the light years we\you have had in the past 5 or 10 years. That's where historical records come in. An average is just that. I'd bet that in the not to distant past you've had a winter that was 50% below average, right? And were you complaining then? I bet not. You gamble, you lost, chalk it up to tuition at the school of hard knocks.

    Out of the past 6 seasons, we've had 1 below normal snowfall year, including this season as we are over our average as well. One year we had over 105" and our average is 72". But we had a good combination of per push and seasonal to cover our butts in years like that.
     
  16. REAPER

    REAPER 2000 Club Member
    from 60050
    Messages: 2,228


    Is this the standard for all seasonal contracts?
     
  17. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,868

    For mine it is. Some have it at 8". I have it worded that it "may result in an extra charge". That way if we get 6" of cement, I will charge them, but if we get 8" of lake effect, I probably wouldn't.
     
  18. ALarsh

    ALarsh Senior Member
    Messages: 203

    I've been doing this 2 years now, last year we hit our averages right on so no I did not give a refund.

    This winter wont put me in the poor house but if I would have known, I would have implemented these new contracts this year. Of course everyone was predicting a dry winter.

    I do make money every time I head out to plow, but it isn't what it should be for my time, equipment and maintenance. I just got in from plowing.... and another 2-4" expected for tomorrow night.

    :cry:
     
    Last edited: Feb 10, 2008
  19. dlcs

    dlcs 2000 Club Member
    Messages: 2,149

    IMO, snowplowing is a gamble and to me the most fair way is by the push. If you had a season with only one snowfall, would you refund any money? You could refund all money, except the cost of your accured expenses like insurance, etc. If you say no, then the customer should not have to pay more because a above average winter. Also, to say you are going to charge more next year because you didn't make out like a fat cat this season due to the above average snowfall, is just unfair to the customer. This shows that you had every intention of making money and not haveing to work for it.


    Forcast is calling for 3-5" tomorrow and possibly another major storm towards the end of the week. payup:bluebouncpurplebou
     
  20. derekbroerse

    derekbroerse 2000 Club Member
    Messages: 2,377



    Hey Mark, you know I always enjoy a good debate with you... I hope you never take what I say as anything too personal.

    Let me explain a little more in depth what I mean by a rip-off. It wouldn't be so bad if you were, say, signed up for a 5-year contract, but if all you've got is a one-year contract, who's to say you'll be doing it again next year? Or in two? The Law of Averages really doesn't apply then, does it? So in a one-year span, either the customer gets hosed or the contractor does, unless by some utter miracle they just so happen to balance, but I doubt that happens often.

    I certainly wouldn't mind a couple seasonal accounts, don't have any yet, but I agree it sure would be nice to get some payment up front to help with the bills. But, by no means, is it more fair than per push. A lot of the things you list you can't really charge the customer for--they're just a cost of being in business no matter what that may be--things like touching up the paint on your truck. Do you really think if a customer asked why the prices are so high that you could convince him with justifications of buying some touchup paint?! You'd have to do that anyways, because you'd still be driving the truck in the winter regardless. Insurance? Regardless of what your biz is you need insurance of some sort... thats part of being in biz.

    What I'm saying is that the 'product' you and I sell is peace of mind... to know that their lot/driveway/etc. will be safely cleared of ice and snow when it needs to be done. We move snow and ice, and THAT is what they pay us for. Everything else is what we do to produce that end result is a cost of us being in business... its not the customers problem, its our problem. They pay us for the snow and ice to disappear, not for our equipment to last or look pretty, or if we don't have insurance thats our problem (within reason, but if they care that should be up front)

    What I'm saying is you can't expect your customers to pay your insurance bill for you whether you work or not. Or buy your paint and engine oil. Thats our problem if we want to stay in business, or we do without those things and run the gear into the ground and hope we saved enough by doing so to buy a suitable replacement! I mean, we still build all these things into the price but if we're not on site delivering 'our product' how could we ever justify them paying our maintenance and insurance bills?

    This is where the seasonal contract's value for the customer breaks down. The contracts are always written up to cover a heavy winter and the customer is paying for a lot of capacity he doesn't ever get. Then when we do get a heavier than heavy winter (like some of these guys are facing) its all crying and talk of raising rates for next year... again it comes down to counting on getting the money for nothing.

    I know they are WAAAAY over their averages... just like we were WAAAAY under ours last year. The advice is the same... suck it up, do your best, and we'll all try again next year!