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Commercial Account Pricing ???

Discussion in 'Commercial Snow Removal' started by Stan, Jan 18, 2004.

  1. Stan

    Stan Senior Member
    Messages: 579

    I recently got another account on a parking lot. Gave the owner a price based on 2" min. @250. Anything over 2" would be $300. for a single clearing. If there was a significant storm and in order to maintain the lot to avoid the use of heavy equipt, it would be $250. per clearing based on my judgement. I thought this was fair but may be wrong???
    The owner calls me up the night before the storm and tells me not to do it unless it was 4". I told him the forecast will not get out of freezing temps for 5 days and if it snowed on top of the "mess" that was not plowed I would risk damage to my truck. He was supposed to call me back after watching the forecast but never did. Plowed the lot anyway, stuck it @ 3".
    The way I look at this it would not be worth the time to have this owner dictate when he wants his lot plowed, but will not beat the crap out of my truck with this cheapskate.
    BTW, this is a multi-million $ company that has contracts with the defense dept.
  2. PLOWMAN45

    PLOWMAN45 2000 Club Member
    Messages: 2,951

    nope its not worth it i have a major food chain and 250. a time and the trigger is 1"
  3. Mick

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

    Basically, he just turned that account into a "will call". These are big bucks as they will only call you when it gets to be too much for them to handle with their garden tractor or they want to "wait till it's over" and you may wind up pushing 20".

    Make sure first that you have documentation that any contract you have now is null and void. Second, let him know that this arrangement will result in service when you are finished with your route or other convenient time. Next, make the price 2-3 times the "normal" (ie: $500 to $750) for anything up to a certain depth (ie: 12") with increases at a specified rate over 12" ($750 + $10 an inch over 12"). Specify that it may be neccesary to rent equipment and this cost will be additional.

    Bottom line - if he's going to call the shots, he's going to be responsible entirely. He's also going to suffer the consequences for poor decision-making.
  4. Stan

    Stan Senior Member
    Messages: 579

    Exactly what I had thought. I went there early today and waiting on a phone call from him. It was just quite 2" and the forecast is calling for highs below freezing. As I looked around EVERY commercial lot was plowed in the area. Can hardly wait to hand him an invoice. thanks for the input.
  5. ih82plow

    ih82plow Senior Member
    Messages: 109

    I have a commercial neighbor to my commercial company.He has not had his lot plowed since the first storm of december.we have had a couple of small storms in since then and frigig weather.

    I was cleaning my lot yesterday and he came over BEGGING for me to clean him out.I explained to him once he makes a decition not to plow he should stick with it.It would be impossible for me to scrape him clean since its all packed down.I suggested he contact a plowing company and get a contract on the property real fast. He explained he has a contract but the guy wants 125.00 each time it snows (regaurdless of amount) I explained 125.00 is cheap I would be charging $300.00 minimum.and the price would esculate as needed for multible visits depending on the storm.

    He should call the guy and ask him why he is not plowing.He said the guy wont return his call because he sent him away on the other storms. told him to call the guy back and tell him you want him to plow every storm and you would pay him double price this plowing to make up for the double plowing because he is doing double the work.

    I will see this morning if he got the guy to come out to plow or not.
  6. kipcom

    kipcom Senior Member
    from Indiana
    Messages: 455

    Stan....if you have a "contract" then stick to it unless the property owner > cancells< with you in writing. If you do not have a contract, have the property owner sign a ::waiver of liability:: releasing you from ANY claims as a result of your services not being used by the property owner and state that it is the responsability of the property owner to contact you for services.
  7. Stan

    Stan Senior Member
    Messages: 579

    Great input from all, thanks. I get the call today that my check from last week was ready and to submit another invoice... COOL. an hour after i did I get a call from thier accountant asking for my social security# in the event I make over $600. Firmly said the price I had given was a "cash: price. Looks like my price will be going up or the hell with the account. Not worth it.
  8. Mick

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

    Stan, so you're working "under the table"? I'd say you can expect to be replaced. They will be losing too much as they cannot claim your work as a business expense. I've picked up a lot of business for that very reason. The other guy wanted cash so didn't claim it on his taxes. Mine is a legitimate business and I declare all income.
    Last edited: Jan 19, 2004
  9. Plow Meister

    Plow Meister PlowSite.com Addict
    Messages: 1,174

    They CAN calim it as a business expense. If they pay less than $600.00 it doesn't HAVE to be reported. He can still send a W-2 even if it were $50.00. As long as the business owner has a reciept for work performed he can claim it as an expense Remember "Reganomics" in the 80's?

    I have one customer that asks me to bill him as though I did not plow. Instead, my bill shows him purchasing 1,000 pounds of salt for $350.00. This way my work is not shown as labor and he can show it as goods purchased for the means of secondary manufacturing. Since he pais cash there is no paper trail to say who he is buying the salt from. I use a generic reciept from a book I got from Office Depot

    When the auditor comes around to ask "Where is all this salt you are buying?" he can say it is a "consumable" kinda like a restaurant or a car wash uses water and therefore is is non-taxable income to me and no payroll mess for my customer.

    Now, don't get me wrong. I don't recommend doing this. It is just a sweet deal I have worked out with a business friend.
    Last edited: Jan 19, 2004
  10. Mick

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

    I agree that the tax laws are not my forte. I understood that anything taken out of inventory for use in the business was treated differently and taxed at a different rate than supplied used for resale.

    Now it would seem to me he would be making more than $600 on this account, let alone all accounts combined. If not, he still wouldn't have a problem providing his SSAN so they can track expenses - right?

    Anyway, for me, I just turn all income into the tax preparer along with expenses. Let him sort it out and keep me out of trouble while paying the least taxes legitimately possible.
  11. Stan

    Stan Senior Member
    Messages: 579

    Plowmeister, Good angle! I take it your customer sells salt from inventory. In my case my customer makes "stuff" for the defense dept. Hmmmm, consumable goods. I know, guided missles mounted to my truck for the "idiots" that get in the way!!!:)