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Confusing contracts

Discussion in 'Introduce Yourself to the Community' started by aeschmidt2, Dec 11, 2011.

  1. aeschmidt2

    aeschmidt2 Junior Member
    Messages: 3

    My fiance and I have had a construction business for 2 years now and we decided we wanted to invest in plow equipment to make some extra income this winter. I did a fair amount of research on this website and among other people who have had plowing services and I feel like I have come up with fair pricing that will allow us to make some money and still pay the bills. I have set up our contracts as a per push with discounted rates for additional trips. Many of our customers have requested that we only come when there is 4" or more which I know is hard on the plow so here is what I have in the contract

    Standard driveway
    *$25 first push at 2-4" OR $35 first push at 4" min.
    *add $20 for second push (typical total accumulation 5"-7")
    *add $15 for each additional beyond 2 (typical storm accumulation over 7")

    People seem completely confused about this and I want to make it more understandable. I think I might change my verb-age to "per trip" instead of per push. Also I have had lots of people show interest but no one is signing/returning contracts. There hasn't been any snow yet here in Southeast WI so I guess people might not be worried about it right now. Anyone else feeling a little lost their first year? Anyone have advice?
  2. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Ditch the discount....if you go twice, charge twice!...are your expenses less the second time around? Just expalin to them everytime you plow its going to cost you $xx.xx amount...simple and easy... or go seasonal and charge them the same price every month for x months
  3. Matson Snow

    Matson Snow PlowSite.com Addict
    Messages: 1,985

    You might want to think about joining SIMA.....

    They have alot of Good info from Production rates to contracts....It might be Beneficial to your company to learn as much as possible about the Snow Removal Industry so you don't short change yourself or the Industry....payup
  4. bristolturf

    bristolturf Senior Member
    Messages: 435

    i agree ditch the dicounting. Either give them a per even price 2-4" is $35 4-7.99 is $60.00 8-11.99 is $95 and anything over 12" is billed hourly. So if the strom totals 6" and you have to plow 2xs you make 60$ if your only able to plow it once you still charge them $60.00.

    Or give them a per push charge. Each time you push them its $40.00 or something and you try to keep pushing every 4" or so.
  5. mike thunder

    mike thunder Senior Member
    Messages: 110

    better yet, since you don't know anything about the industry, and this industry destroys people who think they can "google" how to operate correctly, you should hook up with a local contractor who will let you sub for him. be honest when speaking with him about your skills and he may just let you get some work in. do that for a year while you learn the business side of things. In my opinion, you can't understand the business side unless you've been in the saddle.
  6. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Little on the fence on your comment. If he is only plowing drives ,how do figure out an hourly rate?
    I agree ,plow twice ,charge twice, But if you only kept showing up at my place once and charged me that,I would find someone else.I'd rather pay the same amount but be plowed out twice.

    This is right.Little late in the season to try this out. Even if you buy the plow and let it sitt for the year you'll be ahead of the game for next year.
  7. aeschmidt2

    aeschmidt2 Junior Member
    Messages: 3

    Thank you for the replies. I understand people on here get really offended when people with little experience in the industry come on here and try to start something up. I am going along with this because it is what my fiance wants to do and I support him. We don't have a lot of money and the savings we had got invested into additional insurance and the plow equipment. I don't mind the idea of sub contracting but I have mentioned it to him before and he doesn't seem very interested. So basically we are going to learn as we go. This is just a means of making some extra money while our construction business is slow through the winter. Again I really appreciate all advice but I believe we can make this work for us.
  8. Antlerart06

    Antlerart06 PlowSite Veteran
    Messages: 3,437

    Write up Base price and add $$ for every 2'' over the base
    Keep it simple
    I clean my driveways after storm is over But do have some people want done before they go to work Them driveways get charge double and people are happy
  9. jklawn&Plow

    jklawn&Plow Senior Member
    Messages: 469

    Around here we set up mostly seasonal prepay contracts. I see your from Wisconsin, if you always get snow every season your area may have more seasonal contracts than pay per push. Homeowners will quickly see in areas where there is always a descent amount of snow that they will pay a lot more per push. Just saying not sure of the market in WI.
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Everyone started somewhere. But in this business you need to start in Aug. Good luck and maybe try out just a few places so you don't get discouraged next year.
  11. SnowPro11

    SnowPro11 Member
    from KY
    Messages: 31

    IMO, you would be better to set it up as a "flate rate" or "per trip/push" price. With flat rate you can guarantee them a set price say up to 4 inches and then if it exceeds that you bill them a set rate based on whats listed in the contract. Do not give them a discount for making return trips, that will eat at your profits quickly,
    Don't get too caught up in the 2-4, 4-6, 6-8, 8+ business because then it becomes too hard for people to doubt. You bill them the 4-6 price but the "weatherman" says there was 3.95 inches and they start calling. Or they say well I was at work and I only measured 2 inches in our lot so thats how much we had. Then you have a potential problem.
    Do what you think is best but these are just a few of the problems to consider with that method of plowing. Good luck to you this winter!!!
  12. mpriester

    mpriester Senior Member
    Messages: 424

    im new at this as well, in my contracts i have a 2" trigger, some of my contracts want a larger and some want a smaller trigger, residential i will do on a per call basis, ask them if they want you to plow everytime it reaches trigger depth or if they want to call you for a return clearing and charge them the same regardless, do not discount. try and estimate how long it will take and charge them what you need to make, don't be afraid to charge, see if they want salt and put seperately what you will charge for salting this way they know exactly what they will be paying each time they ask for service, (i base salt on a 20lb. per 1000sg. ft.). base your depth pricing for example 2" to 6" = set fee, 6.1" to 10" set fee and so on, remember it takes longer to move 10" than it does 2". i hope this helped and like i said i'm new as well and it will definitely be a learning experience for me as well.
  13. Banksy

    Banksy PlowSite Veteran
    Messages: 3,113

    I don't know why guys bother with amount per inch pricing. It's too confusing and can be too subjective. What if one driveway gets 4" and another across town gets 7", but the news declares one amount for the whole town. If I'm the customer, I'm measuring the snow in the driveway.

    Charge a flat rate or go seasonal. Plowing every 2 or 3" is a waste. I never had a problem plowing 6, 7, 8, 9, or 10" at one time. I almost always waited to plow towards the end of the storm and my customers were fine with that. If it was going to be extra wet/heavy or more than 12" then I'd go twice, but my price would cover that and I'd come out ahead when it was a one push storm.

    I also don't understand the whole "so they can get out of their driveway in the morning" thing. I never had a customer who couldn't get out with several inches of snow in their driveway. Unless the towns windrow pile was really high, but I never saw that be a problem either. The customer would leave for the day and I'd clean it up well while they were gone and then they would come home to a nice clean drive and walk way.
    Last edited: Dec 13, 2011
  14. aeschmidt2

    aeschmidt2 Junior Member
    Messages: 3

    Many thanks!

    Thank you again everyone for replying to my post. I am going to change up our pricing to flat per trip rates for standard residential driveways. I figure I will let the customers call me as needed or if we can work something out in advance (come at 4-6 inches, come before they leave for work, etc) that is great too. In my area of WI I really do not recall many residential spaces getting plowed out so I am hoping the market is there because of the lack of drivers willing to do residential (probably because there is much more money in commercial). Worst case scenario we will be going door to door to accumulate our client base. This will be a learning experience by far but both my fiance and myself are determined to get started this year.
  15. tonylillo

    tonylillo Senior Member
    Messages: 115

    For mostly residential in NJ I did $75 per hour one hour minimum for plowing and $25 per hour 1 hour minimum for snow blowing. Any time over the hour is rounded off to the next 1/4 hour. I also have a trigger of 3 inches.For the big storms of 8 inches or more I will be there minimum 2 times maybe more at my descretion. Did I lowball my self or did i lowball the other guys out there. I have 10 contracts already and counting, 3 more in the hopper waiting to be signed. We average about 8 to 10 storms a season on average with maybe 2 really big storms per season. That could all change of course depending on the weather. How do you guys handle the phone calls on when you are going to be there and why is it taking so long. On the big storms i am planning on going 10 to 20 hours straight to get all the contracts done, then pick up some quick smaller jobs on the side for $50 per push. Any feedback is always welcome. Thanks, Tony
  16. woodchuck2

    woodchuck2 Senior Member
    Messages: 304

    I try to keep my residential accounts simple and my commercial accounts are similar. Everyone has a 3" trigger with the exception of one commercial account. It is always the same amount agreed upon up to 12" for residential and that amount double after that for every 12". Example: 3-12" is $30, 12-24" is $60 and 24-36" is $90.

    Commercial is 3"-12" for say $50 to start and $50 for each 3-4" afterward until closing time. From closing time to opening again is one money and starts over again.

    The one exception to this is a new account i just picked up that is a 1" trigger for $75 and is $75 for every 3" after until end of storm. Walkways and steps must be shoveled and salted everytime. Every salting of the lot itself is billed separately for $75. This lot is for the local Bank and must be kept clean for the ATM machine. I plowed the dusting yesterday, shoveled, salted the steps and while i was doing that the parking lot began freezing over so i salted the lot too. Quick $150 for about 35 minutes work before i headed for the jobsite.