1. Welcome to PlowSite. Notice a fresh look and new features? It’s now easier to share photos and videos, find popular topics fast, and enjoy expanded user profiles. If you have any questions, click HELP at the top or bottom of any page, or send an email to help@plowsite.com. We welcome your feedback.

    Dismiss Notice

How Would you fix the Snow and Ice Industry

Discussion in 'Commercial Snow Removal' started by Tony Bonventre, Oct 28, 2009.

  1. Tony Bonventre

    Tony Bonventre Sponsor
    Messages: 89

    If you could change one thing about the Snow and Ice Industry, what would it be. What bothers you the most? Is it the National Snow Clearing Houses taking all your profit, The rising insurance costs, Fuel costs, being underbid. What would you change.
  2. JohnnyRoyale

    JohnnyRoyale 2000 Club Member
    Messages: 2,935

    Great question Tony.

    I think I'll start with liablilty issues.
  3. Tony Bonventre

    Tony Bonventre Sponsor
    Messages: 89

    It just gets more frustrating every year this one has to be the worst yet. I have been Bidding Snow and Ice for the past 15 years and have never been underbid as bad as this year, I don't understand am I the only one who's ins. rate increases every year, I did not change my bid numbers on sites I have been doing for a few years suddenly this year my numbers are double everyone else, HMMMMMMMMMMM what happened.
  4. Tony Bonventre

    Tony Bonventre Sponsor
    Messages: 89

    Johnny great start you mean you don't think that we should be responible for the 90 year old blind lady wearing heels and using her walker to go to the department store in the worst Ice storm in 100 years.
  5. JohnnyRoyale

    JohnnyRoyale 2000 Club Member
    Messages: 2,935

    My frustations sometimes include;

    Liabilty Issues.
    Insurance Costs.
    Equipment Costs,
    Salt Supply,
    Ministry of Transportation.

    The joys of this industry.
  6. FordFisherman

    FordFisherman PlowSite.com Addict
    from 06611
    Messages: 1,613

    There needs to be some sort of license or certification to separate experience, insurance amounts, some sort of accountability, like in other service fields.
  7. Tony Bonventre

    Tony Bonventre Sponsor
    Messages: 89

    The big Question is how do we fix it.
  8. JohnnyRoyale

    JohnnyRoyale 2000 Club Member
    Messages: 2,935

    Absolutley right- IMO, snow is an act of God, and should be treated as such. Who does someone sue when they are driving and get caught in a freak rain storm, and cant see and get into an accident?

    What irks me the most is when you get dragged into a lawsuit because it is discovered someone slipped and fell on a patch of ice because someone else decided to clear the snow off their car in the parking lot and it refroze. Or when someone wipes out on some frozen mop water some kid decided to empty out on a walkway at the end or beginning of the day. This sh!t is all beyond our control-but cost our insurance companies money to investigate and defend, which explain the increased premiums.
  9. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,236

    I would like to see better educated consumers.

    This wouldn't solve the lowballing or national company issues, but it would go a long way in helping them understand what we have to go through to prepare for servicing them, amounts we spend to service them, sleep lost\screwed up personal lives servicing them.

    Could be an interesting question, if you could get them to answer it fully and honestly. Do you know what goes into plowing your lot and salting it?

    Possibly, at least some would, finally get it and not be so apt to jump on the first idiot that walks in the door with a grossly lower bid.

    Maybe if they understood or at least had a slight clue of the prep time, the stress before\during\after a storm, the worrying about what equipment is going to break, which employee might not show, which employee is sick, what is going to get hit and turned into insurance, which 90 year old blind lady wearing heels and using her walker to go to the department store in the worst Ice storm in 100 years is going to file a lawsuit, etc, etc, etc; just maybe they would understand why some of us charge what we do, which is a fair rate for a good service.
  10. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,236

    Great idea, how many unlicensed drivers are out on the road? How many of them kill other drivers on a regular basis?

    You've never had an unlicensed plumber or electrician do some 'side work' for you?

    Licensing does NOTHING but give more money to the gov't.

    The only systems that work--sort of--are the ones that are self-policing, such as accountants and lawyers.

    On edit, just look at SIMA, they used to have a code of ethics, and that fell by the wayside. Tony can even attest to how someone can screw up the entire industry and not lose his CSP certification. (NOT referring to Tony)
    Last edited: Oct 28, 2009
  11. Tony Bonventre

    Tony Bonventre Sponsor
    Messages: 89

    I would not blame it all on one person or company, I will agree though you should not be able to exploit an industry and remain a member in good standing in the industries (Currently) highest associations, I can think of a few companies that have hurt this industry and one of them has a new CSP.

    I agree with some sort of regulation just to level the playing field. Don't know yet what it is but I agree there should be some regulation.
  12. FordFisherman

    FordFisherman PlowSite.com Addict
    from 06611
    Messages: 1,613

    Point taken. It would be effective in leveling the playing field in the bidding process. No certification-no bid accepted. No certification, you can't buy salt here etc. Just a thought.
  13. big acres

    big acres Senior Member
    Messages: 653

    Not to keep stumping for the BBB, but it was created by businessmen over 100 years ago as a response to the government threatening to come in and regulate everything. They wanted to self police themselves to weed out the scofflaws. They even have free mediation if someone brings a complaint against you.

    I have considered joining SIMA, but since the code of ethics and self-policing is not a big part of it, I will pass unitl it is. Their members should be called out when an obvious pattern of not paying is brought to their attention. Their should be a panel of peers such as non-biased contractors from various regions that reviews a complaint and issues a judgement. If the non-compliant party does not make good -they get the boot... and it is made public to all members.

    So, yes... I think the fact that a professional organization who allows its logo to be used simply as a sales tool for some big service broker who will shaft another member makes it a non-professional organization is a big problem with the industry.

    What would it take to start another orgaization with principles like this? One that would have a directory of service providers to both use and avoid that potential clients could be sent to?
  14. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,236

    Never blamed it on one person or company, just used him as an example.

    The thing that really pisses me off about JAA and SMG is I asked him about SPAA, the forerunner to SIMA. He had the balls to tell me--to my face--that he was one of the people that took SPAA down because the founder was doing it for his personal gain, by lining up contractors around the country that he could sub work to.

    Sound familiar?

    If you're wondering, SPAA stood for Snow Plowers Association of America. I was a member of that organization as well, because I thought it would be for the betterment of the industry.

    This is where it gets interesting, guess who the founder of SPAA was?

    Yup, great plan as well. If you're in the pesticide business, you will know this, but anyone with a dba (at least in MI) can buy pesticides, whether they have a business license or applicator's license or not.

    Sorry, licensing and certification are not the answer.

    PS You know who enforces the licensing for pesticide applicators in MI? The Dept of Ag, the same department that lost a good chunk of their funding so now the enforcers will only respond to complaints, no 'patrolling' for companies who are violating the regulations. They closed down their offices except in the capital, so you now have to go to the Extension Office to take the test. Oh, wait a minute, the funding for the Extension Services has been eliminated as of right now, so that won't work either.

    The gov't is out of money and can't enforce the current laws, why would they be able to enforce new laws\licensing\certifications?

    Ain't gonna happen.
  15. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,236

    Ummm, didn't the last thread you started with this idea get locked? :laughing::laughing::laughing:
  16. Tony Bonventre

    Tony Bonventre Sponsor
    Messages: 89

    There has to be an answer, there has to be a better way.
  17. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    In Pa there is a new law coming out that states you have to have a govt issued number, put it on your truck (even gives you the right size thats needed) or you cant do any work on someone's property. Its geared for construction, hardscaping and things that alter the property. Something like this would work but if no ones knows about it (customer's) then what good is it? I still think the best way is to actually take the time to sit down with customer's, get to know them a bit (not saying spend all day there) and sell your company and services. This at least beats the guy who hangs flyers out gets the address and never sees them. As far as commercial work.....have at it! It will never get better until the customer's can get over the "price factor". How many times do we hear and know of companies getting an account for 10-20% LESS than a year ago, and so on, and so on and doing a crap job. There also needs to be some sort of self-control and responsibility as an owner. How many morons in here buy some big stupid multi - thousand dollar piece of equipment just because "they just landed this big account" and only use it 3 hrs a night then loose the contract the next year due to another idiot bidding it lower and he say "oh sh!t" now I have to lower my bid just to keep it busy to some degree. We are our own worst enemy! Instead of getting together somewhat and kinda "banding together to an extent" we cut our own legs out from each other. In a nutshell KNOW YOUR FRIGGIN BUSINESS...KNOW YOUR PROPER HOURLY RATE AND BID IT! the rest should take care of itself.
  18. procut1

    procut1 Senior Member
    Messages: 380

    Hiya Tony....Long time no talk

    I just talked to Mike about this the other day.

    There is no fix.

    Plain and simple. It is what it is and its not going to change. The same thing happened and is happening in the lawn business.

    Years ago when I wanted to get into condo complexes for lawn maintenance it was next to impossible.

    A handful larger companies, (not brickman types) but large local operators had the market sewn up.
    Property managers were very picky about who they would ALLOW to bid. They really checked references, they investigated your ability and equipment, and most companies were shut out.

    You HAD TO BE QUALIFIED to submit a bid on a large property like that.

    So when the property managers were submitting those bids to the boards, the boards we;re reviewing 3 or 4 bids from equally qualified companies who were all somewhat close in price.

    Nowadays that has changed. Property managers are taking bids from anyone regardless of history or qualifications.

    Where a complex may have paid $50k a year for their maintenance for years, now they are taking bids from "tommys lawn mowing" and seeing that he is willing to do the job for $25k. He can produce an insurance certificate and the board says "What the hell, lets try it"

    Whats the worst that can happen? Tommy does a lousy job or the grass gets tall.

    The hard part is, more than likely Tommy will come in and do a good job. He will keep that contract for quite a while. Tommy will go many years before the cash flow catches up and he realizes hes actually losing money on that account.

    We all like to think when we lose a job to "Tommy" that he will screw up and the customer will come crawling back to us.

    Unfortunately Ive never seen that happen.

    Tommy will likely do a good job.

    If he does screw up.......The customer is now looking for another Tommy and has in their head that the bids should be around $25k, not the 50k that they paid for years.

    Another Tommy will come along. And he will get the job. The customer is now accustomed to the job at half price and youre not getting it back to where it was.

    The same thing is happening with snow.

    The national companies have it figured out.

    Without them, usually, a small time couple truck operation would never have the chance to go after a Walmart or Big Box store.

    Many dont have the skill and ability to deal on that level, and many others just wouldnt be taken seriously due to their size.

    You see posts everyday on here about "How do I get commercial accounts" and read about someone wanting to go after the Mall of America with a 20 year old pickup, no money in the bank, and a shovel.


    They figured it out.

    Companies like Mikes or other real operators cannot and willnot do the job for a price that USM can make a big profit while saving their customer their promised 30% in snow services.

    So USM gets on the internet and goes after the guys who normally would never have a chance at that account and offers it to them.

    Most of these guys have no experience in pricing an account like that, and MANY are so excited about the prospect of having the "Big Commercial Account" that the money is secondary to them.

    I speak from experience. I was there too back in the day.

    So National Maintenacnce dangles the carrot of the big commercial job in front of the starry eyed contractor who will try his damdest to pull it off.

    Many will pull it off, regardless if they make or lose money.

    To protect themselves, their contract, something i wouldnt use for toilet paper, is so 100% one sided that they have NO risk.

    They have every clause you can think of that they can pull to not pay you. And you are left with no recourse.

    In a contractor, sub-contractor relationship......The whole point is supposed to be equal risk.

    The sub contractor works for less money in exchange for being paid on a schedule and not having to worry about selling the job or collecting on it.

    The contractor gets his cut because he sells the job and he ABSORBS THE PAYMENT RISK.
    He pays the subs on time whether or not he gets paid.

    Thats what he does to make his money.

    The nationals on the other hand do it backwards.

    They put ALL the risk on the sub....And literally make "their cut" for doing nothing.

    Their only job is to figure out ways to squeeze the guys doing the work to please the customer with huge savings and keep as much of the profit as possible.

    The problem is, there are more guys wetting their pants to plow a Walmart, then there are companies that will turn it down.

    National Maintenance has the formula down.

    Get guys who will do the job at any price.
    Lock in the profit
    Squeeze them with clauses and games to increase that profit
    Look like a hero to the customer
    Move on to the next contractor.

    Thats it...Plain and simple.

    You just have to decide what area of the market you want to serve and gear your business to that.

    I cant plow a walmart for $23k that last year was 70k.

    So I just dont waste my time entertaining that. Someone else will get the job, and let them lose money or figure out how to make money.

    Personally in all of my business services I seek out privately managed properties and almost always deal direct with owners.

    They are my bread and butter....I offer a service they need, at a price they can manage and its a true relationship.

    I cant run a business knowing no matter how good a job I do, Ill lose the job next year over $500.
  19. procut1

    procut1 Senior Member
    Messages: 380

    Ill repeat my point.

    The work WILL get done and will get done at the lowball price.

    Ive underbid work before and lost my ass on a job. But I always provided the customer with the service they were expecting....It was my mistake not theirs.

    I think we have all done that.....Got into a job you wish you never took in the first place, lose your shirt on it, but in the end you pull it off and its a learning experience.

    Thats whats going to happen this year. Guys that have never seen a check for $25,000 in their life and think thats huge money to plow walmart.........They will pull that job off no matter what it costs.
    More will pull it off than fail.

    Thats all National Maintenance cares about......Pull it off....Make us look good....Then next year we;ll find someone else to do the same.

    Its no secret.
  20. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    I agree with TONS of things you said Procut! And like I said in my post WE ARE OUR OWN WORST ENEMY! Thats it in a nutshell. I know exactly what he was talking about when it comes to condo boards asking how long in business, equipment etc. we just lost one to a guy who said he's "been in business for over 30 years" yeah right, funny no one around this city has ever heard of him. Basically lied his way into this place. We'll see how it goes...my thought is not very well, you can only fit so much equipment on a little 6x12 trailer. I'll be honest I got a little starry eyed when I was called to bid a big shopping plaza, the wheels were turning, I was thinking how nice it would be, bla, bla, bla. Then I actually sat down did the math over and over because this was the biggest thing we ever bid. My bid, along with the advice of 2 other companies came in at 91k for the first year and 95k for year #2....Ya know what it came in at? 18k Have fun!
    Last edited: Oct 28, 2009