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Going broke in the Mid West

Discussion in 'Commercial Snow Removal' started by Eyesell, Feb 1, 2016.

  1. Eyesell

    Eyesell 2000 Club Member
    Messages: 2,107


    Not sure what everyone else is doing in these tough times but I suspect we'll all see a lot of equipment for sale if things don't change soon.

    Is anyone else out there feeling my pain ?

    Getting Desperate :)
  2. JimMarshall

    JimMarshall Senior Member
    from NW PA
    Messages: 786

    I've already seen a couple of 1 season used plows for sale here in PA.

    I have news for everyone, not every winter is a making money hand over fist type of year, don't rely on plowing income, consider it a bonus!
  3. brianbrich1

    brianbrich1 PlowSite.com Addict
    Messages: 1,102

    As a company I do rely on winter income. It is also why every year I try to have a good percentage split of per push to seasonal. Winters like this is when I look to prey on the guy thinking he was getting into an immediate gold mine and needs to sell off equipment.
  4. Hysert

    Hysert PlowSite.com Addict
    Messages: 1,676

    100%.. we are about a 70/30 for seasonals too!! It's a must..
  5. NorthernSvc's

    NorthernSvc's Senior Member
    Messages: 781

    Majority of my customers this year are seasonal - I try to keep it as close to 50/50 as I can, you have to have some to cover years like this... I am also looking forward to the end of year auctions :)
  6. quigleysiding

    quigleysiding PlowSite.com Addict
    Messages: 1,129

    So do your seasonal people get pissed off when they have to pay for nothing .
    Just wondering . I know its like insurance but seems like most people wouldn't see the value when it hasnt snowed.
  7. brianbrich1

    brianbrich1 PlowSite.com Addict
    Messages: 1,102

    No as most are a low tolerance to snow and view as insurance. Hospitals or medical facilities. They are also multi year deals with no caps to balance out. One year seasonals get a cap
  8. wahlturfcare

    wahlturfcare Senior Member
    Messages: 323

    i always plan on alot of tree work in the winter time and house repair jobs to keep the guys busy. As snow removal here is always hit and miss. And nobody here would even hire you if you did seasonal payments.
  9. Ajlawn1

    Ajlawn1 Senior Member
    Messages: 185

    Yes a mixture is a must as most have stated... Best other advice would be find a lake and move to the E/SE side of it....
  10. brianbrich1

    brianbrich1 PlowSite.com Addict
    Messages: 1,102

    Companies that elect to do seasonal are usually not your mom and pop businesses. It usually falls to larger corporations looking for a fixed cost and to no there winter services are secure. As stated my seasonals are on the low tolerance to winter conditions.
  11. Eyesell

    Eyesell 2000 Club Member
    Messages: 2,107

    So my take on this....with seasonal s some one is always going to get screwed. And this is really the TRUE first year, in a long time, it would of totally gone in favor of the plowing guys.

    This is not all cases, but you either plow more events than what you are getting paid for, cause no one has a crystal ball, or you don't plow much and the customer is still paying. In my mine, why run the risk. As someone else suggested, you may run the risk of losing a good customer even though he/she agreed to it at the beginning of the year.

    Don't kid yourself, if I had to write a check for 2 or 3 months for a service I didn't need I too would be frustrated. Call it what you want, insurance policy, whatever, but at the end of the day we keep it 90/10 and the only reason there is even 10% is we do have some that insist, but they are smaller customers.
  12. Ajlawn1

    Ajlawn1 Senior Member
    Messages: 185

    Seasonals have nothing to do with insurance, your going to take care of the property no matter how your paid. It's all about the number for them to budget most have to set budgets the prior year so the insurance is they have a solid budget number. It also lets you as a contractor budget for that property, rentals etc... Anyone running a seasonal with caps is just an open checkbook and great if you can pull it off on your customer.
  13. iceyman

    iceyman 2000 Club Member
    Messages: 2,925

    But you have to look at it from the other side. In a big snow year the client will get more services than paid for. Its not a one year thing but more of an average over the years. If it were say 3 snowless winters in a row they might want to rethink but 1 120% winter and they made there money back
  14. jonniesmooth

    jonniesmooth Senior Member
    Messages: 296

    I signed 6 new seasonals this fall. I have lost 4 of them already. We had no servicable days in Jan. but we did do them once a week to clean things up. They are 2" trigger. I may look at lowering the trigger next year and raising the prices slightly, or putting a cap on.

    I had projects planned, a new carb and intake for one truck, new tires for another, purchasing another broom, and a new stander mower for next year. Installing the new furnace that's sitting in the corner of the shop, new garage door.
    None of that is happening.
    Have had several unplanned repairs of equipment, even with so little snow. That has taken up a chunk of $$$ too.

    It is frustrating.
  15. xgiovannix12

    xgiovannix12 PlowSite.com Addict
    Messages: 1,433

    I have a mixture of per push and seasonals as well.. My seasonals are keeping up with the bills. Sadly no profit this year but what can we do.
  16. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    90% seasonal with a contract,, pre-pay ( two installments),
    with a cap @ 1" trigger. Salt & shoveling/snow blowing are extra.

    The contractor always comes out ahead.

    Just fallow the GV business model.:drinkup:
  17. JimMarshall

    JimMarshall Senior Member
    from NW PA
    Messages: 786

    One of the best things that we have done to reduce our reliance on winter money is restructuring our insurance premiums.... Something that you may want to look into. Seasonal accounts are a must for anyone in this business.

    Nope, because they know it is an average. As others have said, the key is to do seasonal for multiple years so it averages out.

    I don't see why you would try and deter a seasonal customer, again, you're looking at it all wrong. A seasonal isn't meant to be a good one year solution.

    Did they cancel per the terms of your contract?
  18. jonniesmooth

    jonniesmooth Senior Member
    Messages: 296

    Yes, they did. No refund.
  19. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    Do you Pay your INS premium every month?
    why? You dont make a claim every month.

    It is, a prepay service, like a gym, gun club, you pay every month.
    without refund even if you dont go.

    They sign up because they know sooner or later it is going to snow.
    and they can budget for it. no surprises.
  20. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,250

    You don't seem to grasp snow and ice management as a business, only a sideline, if that.

    Not to mention, winter is far from over. We have 2 potentially solid months left. And if you don't think we can get hammered in March, you shouldn't be in this business.