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Yearly snowfall amount limit????

Discussion in 'Business Fundamentals' started by accurate, Mar 25, 2008.

  1. accurate

    accurate Junior Member
    from ontario
    Messages: 3

    Well, us boys up here in southern Ontario are still digging out of a record snowfall season. Some of us have logged somewhere in the neighbourhood of 400cm (12 feet) of snow pushed this season. Having a conversation with a large operator out in Ottawa he tells me his contracts contain a clause, that in the event of a total years snowfall of over 250cm (71/2 feet), he starts a 'by the visit' service charge to recoupe some money.
    Does anyone use this in their contracts?? How does it work??

    Let me know, would love to hear back

    Chris,
    Accurate Haulage and Snow Removal

    2004 F250 PowerStroke
    8.5' Western
     
  2. plowman4life

    plowman4life Senior Member
    Messages: 557

    we use it in our contracts. except ours are setup with seasonals paying for 12+ pushes. when that is exceeded we start billing on a per push basis.

    some people have us come early in a storm so they can get out of drives. and have us come back at the end. well that uses up 2 of your 12 pushes that you paid for. so if we get 7 storms and we clear your drive 2 times per storm that comes out to 14 pushes. you only have 12 pre paid pushes. they then owe us for 2.

    we do not return payment. but you are allowed to rollover to the next season 1 less than the ammount you paid us for. so if you pay for 12 we only push 6 you can rollover 5 pushes to the next season.
     
  3. YardMedic

    YardMedic PlowSite.com Addict
    Messages: 1,266

    I use a similar contract, only my commercials are for 10 pushes paid up front, billing per push beyond that. I like your idea of carrying over a balance, though I also like the idea of a contract "minimum" paying the standard expenses we have each season whether it snows or not. Yours seems to favor the customer, and mine is probably more in favor of me (though I can argue that the contracted amount is for "readiness of service" and all the things people say about checking weather every hour after midnight & so forth).
     
  4. Mick

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

    I give a price to push anything that falls over the trigger no matter how much snow we get per season. BUT, I set it so that if I pushed every day throughout the winter, I wouldn't lose money. I already have some set up like that, but want to expand so I just sent out letters to other existing customers offering this. Depending on response, I plan to add new customers with "per push" pricing to keep a good mix. You can really implement price increases (actually "income increases") without it being obvious to the customer (perception is everything).
     
  5. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    IMO If you're selling a Seasonal Contract, it is one price for whatever snow occurs. Good or Bad for you or the customer.

    If you want to sell package deals of 10 plowings, use them up and then sell 10 more plowings that would be best.

    The first ten cover your expenses (or however many) if it doesn't snow and the next 10 are for profit. And in a case like this year the NEXT 10 keep you in the black.

    I use to offer this. I was sued and won during a year we didn't get much snow. I'm not giving their money back per the contract. Like mentioned above to cover my readyness and equipment, etc.

    I guess a good way to do it would be to figure your average pushes, like you would for a Seasonal Contract. Say 15. I would sell 10 plowings for $XXX.xx. It snows less than 10 times. You make money to keep equipment running. If it snows 11 times you sell another 10. If it goes to 18 times you are covered and you keep the 2 left over. You send two ivoices, customer writes 2 checks, season is covered.

    You can carry over if you want. It would keep customers coming back to you. But if you wanted to drop them for being a PITA, then you might have to pay them something per the contract.
     
  6. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,046

    Seasonal with a limit is a very good idea. Take your average winter in inches, we use our airport for out totals. Our price is for an average winter and we get paid on a/cm basis after that, very simple. Our contracts include salt and all loader work, so on an extreme winter were protected. JMO
     
  7. jayman3

    jayman3 Senior Member
    Messages: 372

    Hey Acc,you located close to Ottawa,My contrats run 250 cm's and some 280 cm's after I have hit the limit it is so much per visit to do all work from sidewalks,to hauling away snow.
     
  8. accurate

    accurate Junior Member
    from ontario
    Messages: 3

    Jayman

    Thanks Jayman3....I think thats gonna be the best idea for my contracts and clients. How do you figure out snowfall averages and have you ever had a dispute with crossing the limits???? I actually got the idea from a friend of mine who runs a skid steer for a snow removal company out of Ottawa. I'm in Barrie....