Hourly Rates

Discussion in 'Bidding & Estimating' started by timblatt, Aug 31, 2010.

  1. eskimoman

    eskimoman Junior Member
    Messages: 2

    Amazing Rates

    I am amazed at how high some of the rates are being talked about here. We are fighting to get $52.00 for a one ton w/ a ten foot plow!

    We struggle with the "lowballers" and their constant under cutting. The only solution I have made work with limited success is pointing out to potential clients the liability insurance we have in place. Surprisingly about half of the commercial clients I have spoken w/ regarding insurance feel comfortable that their own liability insurance is more than enough coverage. At that point in the conversation I am pretty much out of talking points and out of the running for getting the job.

    As much as I personally dislike it we are having to bid taking a minimum profit for the first season than after proving ourselves trying to get a little extra bump in the following seasons to get the overall profit margin up to where we feel comfortable we are being compensated fairly for the service we are providing.

    I'm open to any ideas readers may have on this subject - as a dedicated company that only does snow & ice management we have no fall back position when the season is over. Understand, we do not want to get back into the lawn mowing and such market - that is even more brutal when it comes to pricing in our area.

    Additionally, I am always in the market for used equipment and talking with any and all professional snow people. This forum represents the most likely path for all professionals in this field to interact and support each other. The end result will hopefully be a more disciplined profession with qualified people owning and operating snow & ice management companies.

    thanks,

    Ted Sr.
     
  2. mullis56

    mullis56 Senior Member
    from Indiana
    Messages: 822

    This is 100% regionally priced, based on market conditions, amount of pushes per year on avg, etc., don't know why it is re-hashed and re-hashed again on here. I will say at $35/per hour I wouldn't be in this business...
     
  3. eskimoman

    eskimoman Junior Member
    Messages: 2

    Fair Assesment

    I would go along with you that it is "rehashed" quite a bit. I do think at the end of the day it provides some basic guidance for new operators to understand how we come up with our rates. It also highlights the challenges we face as operators regarding insurance issues, equipment repairs, etc.

    There is no better way to learn as when people talk to each other and groups like this.

    Ted Sr.
     
  4. Big Daddy

    Big Daddy Member
    from Ohio
    Messages: 32

    Ted,
    I am glad you have opened it up for discussion. I feel we are facing the fact that the costs are being 'driven" down by various factors. It is always going to be up for debate, whether by nationals, low-ballers or the like why bids are going down. However, in the end, we feel that a new standard of professionalism needs to be set by other professionals. But, that is challenging too because of having to survive and remain competitive. We build ourselves on the relationships we develop w/our client base. It will be something we will never deviate from. However, as we have faced, the loyal large clients who are faced with tough economic issues... they are having to make some tough choices this year about whether they wish to remain with us or try another cheaper bid and risk the lesser quality service. They are simply motivated more by budgets this year.

    We lost our top client 2 seasons ago because of that, and they were back to us to offer a 2 year contract in spring for their plow business. So, it came back. But, at the time, it was a tough pill to swallow. For us, we prefer to remain diversified and hopefully to recoup margins in other areas.

    But, if the trend continues on the way we are seeing in our area, we will rethink snow service offering all together. We are already investigating other avenues and considering alternatives. We can not afford to put our eggs in one basket right now.. at least for us..
     
  5. redman6565

    redman6565 PlowSite.com Addict
    Messages: 1,409

    I don't work for a contractor, we perform our own work
     
  6. ff610

    ff610 Senior Member
    Messages: 319

    So your saying you are the contractor then, but you only write off your insurance costs on other parts of the business? Doesn't that just raise the cost on that side of the company jobs, or do you just have the ability to net more profit there? I guess either way its hard to compare that, because you would have the costs associated with insurance no matter what you write it off on.
     
  7. snowman55

    snowman55 PlowSite.com Addict
    Messages: 1,228

    part of why prices are where they are.Redman you are plowing because you will already incure expenses because of your other work. so your fine with lower profit on the other side? Too many guys look at it as income to help them get by. I don't get it. raise your snow and you can lower your ex work to grow that. Snow is the most dangerous, committed service you can provide and people are ok with it being low profit, because it gets them through.
     
  8. TwoBrosLawn

    TwoBrosLawn Member
    from 53223
    Messages: 90

    i did 28 driveways last year in the "more expensive" part of southeast WI i averaged abour $110/hr im bidding on 11 commercial lots this year....if i get them, curious too see what i can get up too. (hourly)
     
  9. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,964

    which 11 commercial lots are you bidding on? I will then know not to waste my time.
     
  10. Nursemylawn

    Nursemylawn Junior Member
    Messages: 22

    I know this who is managing condominiums, it has a straight parking lot about 15000sqft and sidewalks around the lot. He wants me give him an estimate for based on hourly charge. When I asked him how much you paid last year? he said "$300 in hour because they were 3 people, but it took way longer to clean up the lot.. That's why I don't want them this year.. " So, some people pay $300.00 and I'm wondering how much should I charge him..?
     
  11. ktfbgb

    ktfbgb PlowSite Veteran
    Messages: 4,082

    This thread is 6 years old.
     
    Philbilly2 and Nursemylawn like this.
  12. Nursemylawn

    Nursemylawn Junior Member
    Messages: 22

    Thank you ktfbgb!
    What are the hourly rates now? I know rates are different in states, but any thing you say will help an um experience person like me..
    Thanks
     
  13. Philbilly2

    Philbilly2 PlowSite Fanatic
    Messages: 12,081

    There is so much that goes into this loaded question...

    BUT to simplify it down as much as humanly possible,

    You need to first figure out what it costs you to operate, then add on the profit margin that you would like to make. There is your number per hour.
     
  14. ktfbgb

    ktfbgb PlowSite Veteran
    Messages: 4,082

    So just to give you an example for comparison. In my area these are the going rates for time and material jobs. I have won several bids with these prices this year, and also lost a couple. That means I'm right in there on price. I also know several owners of other outfits and have compared prices and they are comparable.

    HD truck with straight blade $75 hour one hour min.
    HD truck with V blade $85 hour one hr min.
    Hand shovelers $40 per man hour min one hr.
    Snow blower $65 per hr one hr min.
    Compact utility tractor for sidewalks $90 per hour one hr min.
    Skid steer with snow bucket $90 per hour two hour min.
    Back hoe $120per hour 3 hr min
    Bagged ice melt $30 per bag 1/3 bag min($10)

    Now these prices are for contracted services that are time and material. These types of contracts are the norm here along with seasonal for commercial plowing. If they are one time or emergency customers the prices are higher. Prices fluctuate every year. We are in a down trend the last couple years as there has been a big influx of contractors for snow. We all think it's going to start to back up over the next couple years. For example three years ago the HD truck with a V blade was charging $120 hr min. Some were $150 min and $120 hr after that.
     
  15. spencers

    spencers Senior Member
    from Utah
    Messages: 147

    so thought I would add this on here. A friend referred a plow company to me as they needed help. He sent me over his price sheet which I list below. I turned him down because I am just too busy but unless I am desperate I wouldn't plow for him. I'm pretty fast. I have a 8'2 boss v blade and a boss vbx. He wanted me to use my own stuff including salt. Below are the prices. Location is UTAH. You don't get paid for drive time just the time you are at the properties. What are your thoughts on this.

    Truck with plow $65 hr
    toro v plow or atv with plow $45
    skid steer with bucket $60
    skid steer with pusher $70
    dump truck for hauling $85
    front end loader with bucks $95
    front end loader with pusher $110
    backhoe 12' $80
    snow blower $30
    hand shoveling $25
    sidewalk ice melt .25 per lb
    coarse sand/salt ton applied @ $160 a ton
     
  16. ktfbgb

    ktfbgb PlowSite Veteran
    Messages: 4,082

    where at in Utah? Im in Flagstaff AZ so not too far south from you. Those prices seem low to me but it is a different state. The ATV only makes 5 bucks an hour more than a hand shoveler here. I could not make it work for those prices and would be better off not doing snow removal. You didn't mention minimums either. Like I put above each service has a minimum charge. And minimums reset each time you leave the property. So you come plow, it takes 20 min. thats a full hour min charge. You come back to clean up, or plow again, or whatever its a new min charge.

    One of my HOA's would be charged like this.

    15min plow = $85
    I step out of the truck to shovel the community mailbox area and throw two handfuls of ice melt. 5 min. $40 plus $10 min for ice melt

    Total= $135

    It snows an additional 3 inches that day and you come back to do the same service its another $135. Some guys will try to make you keep a running time sheet for the whole storm. If thats the case run away. The only way to make money on time and material is to have minimums in place that reset each time you leave the property.
     
  17. spencers

    spencers Senior Member
    from Utah
    Messages: 147

    they didn't give min like that. It's just I show up and write my time down when I show up and when I leave the property. I would be plowing in a truck so I would just have to write down the time I show up at each place and the time I leave and then I would be taxed. lol
     
  18. spencers

    spencers Senior Member
    from Utah
    Messages: 147

    I'm in Salt Lake area
     
  19. spencers

    spencers Senior Member
    from Utah
    Messages: 147

    I think the company charges per push and they just hope it doesn't take me long. So if they get 200 per push and it takes me 1 hr they pay me 65 bucks and they pocket the rest.
     
  20. ktfbgb

    ktfbgb PlowSite Veteran
    Messages: 4,082

    Yep they are going to pay you to the minute that you are on the property for the total amount of time that you plow for the whole storm. So I wasn't really sure but from your last post I see now that you are subbing. Since you aren't having to pay insurance and stuff for those lots it may be an ok way to fill holes in your route. I have never formally subbed for anyone but the stuff I personally sub out like the back hoe and skid steer I add $20 per hour to what the sub is getting so those numbers seem about right now