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Areas with lots of snow...

Discussion in 'Commercial Snow Removal' started by chtucker, Sep 6, 2002.

  1. chtucker

    chtucker Senior Member
    Messages: 618

    Most of you are from areas that see inconsistent snow (from my perspective). I live in Colorado where I know it will snow by mid-october and be on the ground till mid may. The rates you quote for jobs I don't think would fly here. It could snow 10-20 times a month, each time 3"+ , a residential customer won't pay 500-750 to have their driveway done. How should I set-up monthly contracts? The snow here is real light powder, Never ever really wet, but then again it is dam cold. FYI, the town is at 10,000 above sea level.

    Thanks for your help.

  2. Mick

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

    Howard, have you paid to have your driveway cleared? How did you deal with the need for so many plowings per month? You say they won't pay $500 - $700 to have their driveway done (I assume you mean that much per month). So what other choice do they have? I'd say that's just part of the cost of living in that area, much as this area. It's just a given that if you don't want to stand the cost of clearing out from snow - buy your own plow, shovel yourself out or move into an apartment.

    Regardless, you need to figure your recurring costs (fuel etc), replacement costs (truck, plow etc) and fair wage for the job. If you can't recoup your costs, then you're paying them to plow their drive.
  3. Chuck Smith

    Chuck Smith 2000 Club Member
    from NJ
    Messages: 2,317

    SIMA has just started a Mentorship Program. Established Members help new members learn all the benefits being a SIMA Member has. I am sure they will teach those new to plowing more than what SIMA has to offer. I signed up for the program. I don't know the details yet, but it was announced in the last SIMA News.

    I, and I am sure many others on here will recommend joining SIMA if you are serious about snow.

    Welcome to PlowSite Howard :waving:

  4. chtucker

    chtucker Senior Member
    Messages: 618

    I obviously need to do some math. I have considered the fact that maybe the reason there are only a couple of commercial plowers in town is because it is hard to make money.

    After more thought, do you think it is possible to make up for lower margins with higher volume?

    I only have two contracts (plus my own business parking lot) cover my skid-steer pavement and then some ($250 payment, $500 a month in contracts)

    1st contract $400 a month, plowed everytime it snows more than 1" by 7am, doctors office, 1 acre total

    2cnd contract $100 a month plowed every time it snows more than 3" 50x50 parking lot

    I do both of these with skidsteer (15 minutes between) with its 7' plow.

    I just am considering supplementing my income in the slower winter months. I would consider putting a 8' on my f-250 supercab.

    I took the two contracts to help pay for the skid-steer. My contracts run from October through May so I have a VERY long plow season. (8 months x $500 = $4000)
  5. Mike Nelson

    Mike Nelson Senior Member
    Messages: 637

    ''I just am considering supplementing my income in the slower winter months"

    What about a ski resort with all the Snow Bunnies? :nod:
  6. chtucker

    chtucker Senior Member
    Messages: 618

    I tried that then had to open my own brewery:drinkup:
  7. Mike Nelson

    Mike Nelson Senior Member
    Messages: 637

    So your the one who ownes the Coors brewery? LOL

    Better stick to plowing,less trouble. :eek:
  8. SnoJob67

    SnoJob67 Senior Member
    Messages: 384

    "It could snow 10-20 times per month..."

    If it snows 10 times, that is $50 per service for the one acre lot at the doctor's office. If it snows 20 times, that is $25 per service. Only you can decide if that is enough return on your investment.

    Working at Wal-Mart for 25 hours per week at 8.00 per hour for eight months would yield $6400 before taxes. I'm not suggesting you go to work for Wal-Mart, but I'd second your notion that you need to do some math. If you could find another account in the area, maybe you could be profitable this season. I'm not bashing you at all, just telling you what I see unless I have missed something?
  9. Mick

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

    Do I have this right:
    $100/mo for a 50x50 lot.
    10-20 events/mo

    That equals $5-$10 per event:( .

    I won't even start my truck for that. I have a couple of lots that size. These are wide open with no obstructions. I'd say I use about $2-$3 in fuel to clear each one. Not sure what a skid steer would use. Like SnoJob67 said, I'm not bashing you at all, I just don't see how you make any money on the lot. More lots wouldn't help.
  10. digger242j

    digger242j Senior Member
    Messages: 672

    Well, if you listen to their commercials, car dealers, furniture stores, discount department stores, etc. do it all the time. The difference there is that they're paying people to do the work for them so all the owner has to do is oversee and manage, and count the money. If you got a million accounts, hired enough subcontractors to cover them, and made a dollar on each one.... If you had to service them all yourself you'd have worked yourself to death before the next snowfall.

    On the other hand, a lot of the hourly rate that those of us in less snowy areas are trying to shoot for goes to pay for the capital that's tied up in equipment that sits idle for a large portion of the year. The notion of lower margins but higher volume has some merit when weighed against the more economically efficient usage you get from equipment that's always earning its keep, rather than sitting idle.

    Brain surgeons can charge big bucks because: 1. they're aren't that many people that can do the job in the first place, and 2. *nobody* can do it for themselves. Snow plowers, particularly residential, compete not only against each other, but against the fact that it's something homeowners can do for themselves. (Or can even do without.)

    You're right about having to do the math. Our economy is one of supply and demand. If there's only a small supply of commercial plowers in your area that might indicate that there are just not many people demanding the service.
  11. chtucker

    chtucker Senior Member
    Messages: 618

    What I should say is, most eastern contracts are much shorter than here at 10,000 feet. 3.5 months of my contracts have the very good potential to be little or no snow. The other 3.5 months I could get clobbered.

    The last three years have been extremely light. My two contracts (I did them last year) want FIXED bids. They grudgingly wrote the checks last year when I didn't do ANY work. It is anyone's guess what this winter will hold, but it has been hard to convince people that I worked hard to get my money last year.

    Any suggestions on contracts that are good for me and my potential clients. It doesn't matter If I get an 3" or 1' here it is so light. 18" and then it becomes a different story. Based on number of events? Have any of you done a base number of plows and then done additional storm fees (5 storms included in contract 6-10 at such a price 10-15 at such a price...l. yada yada)

    I am looking to supplement my income. The brewery business is great in the summer and during some parts of the winter, but did you ever try to sell someone beer when its -30 outside?

    Thanks for the help. I understand you are not trying to bash me, just trying to keep my from walking around shirtless.
  12. JCurtis

    JCurtis Banned
    Messages: 862

    :drinkup: :drinkup: :drinkup:

  13. Mick

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

    I suggest this: For those who "grudgingly" wrote checks for you "doing nothing" last year - go to them and offer them a similar deal this year (everyone is talking about the Farmer's Almanac forecast of heavy snow this year, so remind them). If they balk, gladly switch to "per push". Come to an agreement on that and get them to sign a contract. Next March remind them that you offered to renew last year's deal and THEY refused. The problem with that is that if they take you up on it, it sounds like you will lose big time - I suggest adjusting your per season, or monthly, rate upward.
  14. chtucker

    chtucker Senior Member
    Messages: 618

    Period of Record : 7/ 1/1976 to 12/31/2001
    Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
    18.7 19.2 22.8 26.9 8.7 2.2 0.2 0.0 2.3 10.5 20.1 18.6 150 inch anual total accumulation

    These are averages obviously, it snowed 12" on July 4, 1996 (my first summer here)

    It just stays around. I almost always have snow in my yard on memorial day, and there are a few storms in June.

    I have a long season, dual use for my truck/skidsteer (brewery supplies/pallet unloading).

    The previous company bid the medical center at a per push rate of $75.
  15. Rooster

    Rooster Member
    from Kansas
    Messages: 650

    You should give Chuck Smith's suggestion of SIMA serious thought.

    Wealth of information there.

    BTW: I for 1 in Kansas will take all the snow you'd care to send!
  16. litle green guy

    litle green guy Senior Member
    Messages: 279

    If the the previous company bid the medical center at 75$ per push, that would mean it would be anywhere from 750- 1500 a month, so why are you only getting 400$ per month? If you plow for that rate your making anywhere from 40- 20 per push. I would definitly try to get them on per push or if not you have to raise your monthly rate.
  17. chtucker

    chtucker Senior Member
    Messages: 618

    The previous companies rate was 400 a month, 75 a push. The more I think about it, the less I want to expand. I got the contract because of a friendship with one of the doctors for the same rate. I just wanted to pay for my skid-steer.

    It is too much of a gamble I guess, that is why very few people do commercial plowing around here. Alot of businesses and homeowners have their own plows to do VERY small areas. (some don't obviously)

    Heck I have a JD 1032 snowblower, a New Holland 553 skid steer and am considering a plow for my truck and my driveway is 30' by 35'. I do the street where my brewery is because the city goes up the middle of the road with a grader (yes the road is paved). I can get in between cars, run up the sidewalk and stack snow with the skid steer.

    I am just trying to get a payback if I buy the plow, but after talking here, I don't know if it is such a wise idea.

    Thanks for the help.