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Discussion in 'Commercial Snow Removal' started by Scott Fortin, Aug 31, 2003.

  1. Scott Fortin

    Scott Fortin Junior Member
    Messages: 16


    I've been plowing commercials for a couple years now, doing my drive and my folks only. My partner and I are looking to make the shift this season to more drives, but I wanted to see some opinions on price, if you've been burned on payment, seasonal vs. per push, getting new customers, those sort of things. Do you have any advice as we venture into this since my experience is all commercial to this point? We'd like to make some payup to go along with all the white stuff we hope for this year! Thanks!


    '91 Bronco
    7 1/2' Western Pro Plow
  2. wyldman

    wyldman Member
    Messages: 3,265

    If your already doing commercial,why would you want to go residential ? Commercial is much more profitable,and less headaches.

    Not trying to rain on your parade,just curious as to why you want residential.
  3. szorno

    szorno Senior Member
    Messages: 308

    we are also looking at going into residential. (28 years of almost only commercial) We have about 5 residences now, but the market is crying for some dependability and quality. Mostly the upscale neighborhoods. I am thinking of building a Jeep Wrangler and putting my 19 yr old son in it. He has 3 years of experience. I know that getting customers close together is important. What other suggestions do some of you guys have? :confused:
  4. wyldman

    wyldman Member
    Messages: 3,265

    Well,I guess if your going after the high end residential stuff,it would be worthwhile.

    Any suggestions ?? Don't lowball or try to match what the other guys are doing it for.You won't find it's worth your while.

    Price it just like a commercial account,seasonal if you can get it.

    Make sure that they know what the level of service is,as they tend to be the biggest whiners.Spell it out up front,so complaints can be sorted out quickly.
  5. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    szorno, you've already hit on the two most important factors: reliability and quality of work. This is how I've built my residential business over the past 20+ years, I now service nearly 100 accounts inside a 5 mile radius.

    The key to profitability is consolidation of your route, set your boundaries and take work only from inside that area. Once the word gets out about the quality of your service, customers will seek you out.
  6. Plow Babe

    Plow Babe Senior Member
    Messages: 218

    We have been highly successful with residential. We are just the opposite, our business is mostly residential and we have added commercial just the past few years. The commercial accounts are much higher maintenance, higher liability, and there is more competition for them. Here is my input, based on our experience with residential:

    1. Consolidate your route. We have about 150 of our accounts in two adjacent subdivisions. The rest are in nearby subdivisions within 5 miles. It may take a few years to build the route up to where you want it to be, so be patient.

    2. Flat season rate, paid in advance. We used to charge per push, billed monthly, and I got tired of trying to collect for the previous season in August. When we switched, we had very few complaints, and did not lose any business. One thing that helps is that we accept payment by credit card. Some businesses will hesitate to do this because of the merchant fees. But I feel it is worth it to pay $2.50 to have $100 deposited to my account within two days. Also, have some of your existing customers give you references.

    3. Don't low-ball. You don't want to be the lowest priced service. Customers who base their decision solely on price won't be loyal to you when the next low-baller comes along.

    If you can come up with a pretty good idea of how long a driveway will take you to plow, and what your average times of service will be per season, here is the formula:
    How many dollars per hour do you want to make? Divide this by 60, then multiply by how many minutes the driveway will take. Include your driving time from that driveway to the next. Then multiply that figure by the average times of service per season, and you have your base season price. Then you will add to that any other service you will provide, like salting or loader work to push back piles, etc.

    4. Three year contract. Explain that this goes along with the flat season price, so you can both take advantage of the law of averages. Of course the contract can be canceled, but as long as they are happy with you, they won't cancel, and you will have a better idea for each season how much work you will have and what income you can count on.

    5. Detailed contract. Spell out exactly what your service will include, and what it will not include. There are some threads on this, and some other good resources can be found through SIMA. We also got some good ideas from John Allin's book, "Managing Snow & Ice."

    6. Good communication. Be straightforward with the customer as to when they can expect to receive their service.

    7. Quality service. Put up markers. Don't leave furrows or snow clumps behind. Be thorough.

    8. Ethics. If you damage anything, be quick to make repairs, and don't be stingy. It is better to lose a little money one season in order to keep that customer for future seasons. For example, we nicked a garage door last season and it left a dent, so paint was not good enough to fix it. When the garage door company inspected it, they found out that the door was so old, they could not get a replacement panel that would match the rest. He told me they could get something that they could "make work, " but would not really match. So, we paid for them to completely replace the whole door. This was more that we "had" to do, but these customers are so happy, they will stay with us forever, and they will certainly tell their friends. Another customer who rents out his home for vacationers ended up with a big hole in his garage door. I know without question we did not do it. It was a guest with a rack on the back of his Suburban that stuck out, and he backed into the door and made a hole. However, the guest would not confess it, and the owner thought it looked like it could be plow damage. I discussed it with him, and let him know that we did not do it. However, so that there would be no question in his mind, I paid for the repair. Again, a customer who is extremely happy, recognizes we went above and beyond, and who will not only stay with us, but tell others.

    9. Don't "disappear." Keep in touch with your customers in the off season. At the least, send out an end of season letter, letting them know when to expect to hear from you again. Contact them at least a month before the competition typically sends out contracts.

    There is an excellent brochure available through SIMA, "How to Find a Winter Services Provider." I would definitely recommend that you use this as a sales tool.

    You will find that most contractors will respond like wyldman did, "Why would you want to do that?" But if you see a market opportunity, don't be discouraged. You are on the right track targeting the high-end housing areas.

    Most contractors around here have the same attitude, and as a result, the residential accounts are left to the one-man operation, and unfortunately, many times this is not a person who is committed to it, but just doing it to "fill in." So they either give up mid-season, or else are only around for a couple of years. Then their customers have to go looking for a new plower. That is where we come in! Our stability is a good selling point, and we have nearly 100% customer retention from season to season.

    Best wishes for success - keep us posted how things go! :)
  7. pbeering

    pbeering Senior Member
    Messages: 266

    We do a lot of residential bundling drives with the neighborhood streets. That way you spend less time driving around.

    Our standard arrangement is that once you are on our list and have signed the contract you are there until you fire us, sell the place, etc., and we usually keep the account once we have it - even when the property sells.

    We do a slick color brochure that sets forth the "rules of engagement" and explains why we are worth hiring. That brochure goes out annually in October.

    We also maintain an e-mail list of all our clients and periodically send useful information, tips, hints, holiday greetings, etc.

    Our billing deal is different from most, we do it on a tiered rate per push. Absent compelling circumstances, we ONLY accept credit cards for payment from residential clients which allows us to do batch runs with the bank. What I pay in processing fees is more than worth the headaches it prevents. The banks are all hungry and will be pretty competitive on the fees, and you can do it by phone when you first get started. You have to maintain that data in a secure way and be professional about it.

    Plow Babe is right about fixing things. $100 worth of grass seed and top soil goes a long way to soothing a property owner. We replaced a shrub that we unplanted under a 3' drift and the guy signed up 4 more customers he was so happy.

    One other thing, don't be afraid to walk away from a client that has a screwy arrangement. There are times and places that you simply can't fit a truck.
  8. snowjoker

    snowjoker Senior Member
    Messages: 283

    Good info Plow Babe!!! how many of you that do residential actually put up markers/ and what do ya use 2x2's painted at the top or reflective fiberglass ones, and do you charge for them and just let the customer keep them?
  9. Michael F

    Michael F Senior Member
    Messages: 203

    We are slowly....slowly transitioning out of residentials for these reasons:
    1. not as profitable
    2. harder to sell in this area because of lowballers

    The problem is we keep getting referals from lawn cusomers, neighbors of plow customers etc., that aren't even a sell, just send out & all set. That and I feel a sort of loyalty to these people, they were there when we started. Some are both snow & landscape customers, send out card for my kids B-day, one even sent them out for both my kids for all their first holidays.
    How do you just dump them? I can't.
    What we end up doing is using them to fill in routes. Depending on start times we may do them at begining, end etc., so our commercials get prime plow times.

    We do stake our drives, we use the stakes (like .30 a piece) from J. Thomas for residential., fix all damage in spring. Main things to watch for from what I've seen are your contracts, have an laywer review or somthing. Attorney general can be brutal if you get a big storm. I've seen it here & read about it from Buffalo's storm. Be careful, you may say oh it's just a residential, be careful.
  10. Mick

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

    I use markers on all my accounts to mark driveway edges, dropoffs, well heads and any other hazard. I'll also mark such things as "push off" areas. I use 48" fiberglass with round reflectors. They are about $2.50 ea at Home Depot - hoping to find them cheaper somewhere. Anyway, I use the red reflectors to mark driveway edges and potential hazards to stay away from. I use the blue reflectors for such as the push off areas. I don't charge for them specifically, figure them as a business expense. I leave some and pick up some, depending on the circumstance. If I figure I'll get the account the next winter, then I'll leave them. I had one customer who I cancelled for non-payment and didn't bother going to pick up the reflector - not worth the expense involved going there to get it and it's not a place I go by otherwise.

    The first winter, I cut 2x2s (I also tried 1x1s and 3"x3"s) for markers and tied ribbon to the top of them. Just seemed more trouble than it was worth, but mostly the problem was that they didn't pound into the ground easily and split. I didn't think they looked as good as the fiberglass ones and didn't show up as well in the dark.

    If anyone knows a good supply source for 48" driveway markers, let me know. The popular online catalogs have the 24" and 36" ones - which are just too small. I've lost some 48" ones in snowbanks as it is.
  11. GeoffD

    GeoffD PlowSite.com Veteran
    Messages: 2,266


    why not just try some grade stakes, and paint the tops.

  12. Scott Fortin

    Scott Fortin Junior Member
    Messages: 16

    Our reasoning is pretty much like Szorno's, there's a big call for residential here as we're in an area that has a strong housing boom with high end houses. I figure we'll be filling a hole in the market.

    Great advice all. Thanks for all the help!
  13. Mick

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

    Geoff, I'll have to look into them. I've never had any, but I suppose they're at any lumber yard?
  14. szorno

    szorno Senior Member
    Messages: 308

    Thanks Karen and Peter ! It looks like our first efforts will be in a way-upscale neighborhood where we have been doing the road plowing for 4 years. I met with the developer informally today and he agreed to support and endorse us. These are $3/4M to $2M homes. I will price them to keep our hourly close to $100. I have not considered seasonal contracts, but this would be a great test for the concept. I will also start looking into credit cards. That might help with this clientele. Much food for thought. Could be the start of something good. Thanks a bunch !:waving: :salute:
  15. Snoworks

    Snoworks Senior Member
    Messages: 466

    Some good information so far!

    98% of our work is residential. We avr. between 250 and 300 driveways per season. All of our customers are billed on a seasonal price. The avr. driveway price for our customers last year was $310.00. (typ. # of storms +- 10)

    Some pay seasonal price, some pay per plow price with a 6 plow retainer.

    Depending on the amount of snowstorms, our residential contracts make more money per hour that the commercial accounts we have. (based on 10 years of plowing avr.)

    Here are some keys that i have discovered for residential plowing.

    1.) Keep travel times down to a min., I would rather sell a driveway close by for a cheaper price, than sell one at a higher price farther away.

    2.) Must be very orginized - Keep logs of customers with directions and photo's of home for plow drivers

    3.) Sell the service, not the prices - If a customer is particular about the price - they are mostlikely will be a problem customer down the road!

    4.) If you want to be sucessful in residential - be available for your customers. I give my cell phone # to every customer - sure some call me during a storm event - but most do not. Its the peace of mind they get nowing they can get a hold of me at any time that helps

    5.) Dont go plowing without a front and rear plow on your truck -you must have a rear plow to max. every min. of your time - The rear plow will shave mins. off your driveway times!

    6.) Put all plowing senerios in your contract - ie. when you will plow - what times you will start and at how many inches, etc. - this information will be necessary later!

    7.) Be professional - Send out thank you letters, performace letters, referal letters, etc. - Alot of my customers simpley like the way I handle my business, and tell me so. They see I am passionate about my business, and reward me will new referalls.

    Just a couple of things i have learned doing residential work.

    Chuck B.
  16. J.Henderson

    J.Henderson Senior Member
    Messages: 164

  17. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    Some very good posts here...

    My thought is that per hour commercial may not necessarily be more profitable than residential. Residential can be profitable if operated as mentioned in other posts. The same principals apply to commercial work too - keep tight routes, be organized, etc.

    The advantage to commercial in my opinion is the frequency of service that is required, particularly if you can get a lower trigger depth on the contract (1" vs 2"). Some residential will take a 1", but at least in this area most people don't see the need to pay 30 - 40% over the season for increased level of service. With commercials you'lre also de-icing is which is very profitable. Commercial also offers increased sidewalk potential. We have done plenty of residential walks (it was our early niche focus - complete service for residentials) but again, with frequency, commercials will need to be serviced more frequently.

    Money can be made on both - I wouldn't necessarily say commercial is any better than residential as long as you're making the money you need to.
  18. farmertim

    farmertim Member
    Messages: 95


    Hello from the great dry north..

    One thing you may want to consider is an on-call option for your residentals.

    I run all residentials and charge an up-front yearly fee for all of them.

    There will always be a few customers who always question the trigger depth and so I offered the option of them calling me.
    This option is 25% more than the season per push average cost and is deducted from their deposit everytime they call.
    When they run out of their deposit I figure the average left in the year and they have to deposit that amount before I plow them again.
    This has yet to be tested and I only have about 5 on my route of 132 that regularly question the trigger depth.
    If anything it will keep them from calling me every 1/2 inch for it is costing 25% more for me to come when they call than when I show up on the traditional trigger depth of 3".
    Good luck and mark your area's, and always ask if any new contruction will happen before snow, or any major landscaping is plannned so you can come back and look before its covered in the first big snow....
  19. Pelican

    Pelican 2000 Club Member
    Messages: 2,075

    Tim, if I were you, I'd suggest to those 5 clients they might be happier with another plow contractor. If I have clients that regularly question my work, I do the same and move on. For every one I drop, I have 2 call to replace them. I'm not trying to sound holier than thou, but in this business time is money and any delay is cutting into your productivity.

    I also don't bother with "will call" customers, the last thing I need after arriving home from a night of plowing is a list of customers whose homes I drove by coming back. With me the route is pre-arranged or they don't get on the route.

    I also explain to the customer where they should park their car(s) so I can give them the best job when I'm there. I can't run around after they've moved them to clean up, so I have them park where I can do the best job of cleaning.
  20. I'm a little foggy on something here. On residential accounts, what do you do when you get a dusting to a 1/2 inch or so of snow? Do you just salt?