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Discussion in 'Commercial Snow Removal' started by ggos, Jan 6, 2012.

  1. ggos

    ggos Junior Member
    Messages: 1

    It seems to me that the majority of the members here like to complain about the "Lowballers" & "Nationals" in the plowing market. Looking at this from an outside perspective, The nationals seem to me to have figured out the market. Is it the owners of these national companys fault that they are able to offer a service at a lower cost for the same quality. No they just have better sales people than the majority of the people here. As for the lowballers, how can you say they are lowballing, do you know what they pay to operate. I myself am able to operate at a lower cost than a lot of companys in my neck of the woods. Yet, we still manage to operate newer equipment, have newer or new trucks and pay employees very well. Still at the end of the year manage to make a profit. We plow 50+ residential's, 3 apartment's, 11 commercial lots, 1-38 unit townhome and 1 mall. There are hundreds of propertys that need snow removal throughout the nation. I bet the majority of you on here complaining about the nationals and lowballers yourselves try to pay your subs the lowest amount possible. That is business.

    Ex A: Company A plows lot for $15000 per season- Has $3800 per month for payments. He does not think that is enough.

    Ex B: Company B plows same lot for $9000 per season-Owns all of his equipment.

    Does that make him a lowballer-No-That gives him the advantage of winning the bid because he has managed his company better than you.

    Sorry, might piss some of you off but oh well.
  2. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665


    I too don't blame nationals as I know a lot of local companies hurting market price more than any national does.

  3. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,953

    Did this equipment appear out of thin air? will it again when it needs to be replaced?
  4. TCLA

    TCLA 2000 Club Member
    Messages: 2,707

    This is a worn out and old argument.....what's a lowballer. And your example is flawed.

    So no matter what your costs are, it's ok to continue to devalue professional snow & ice management?

  5. Italiano67

    Italiano67 Senior Member
    Messages: 645

    Well what do you want a cookie? Dont strain your arm patting yourself on the back. Why come on here and on your first post try to stir the pot? I personally dont give a crap about your great company and smart business acumen.
  6. dfd9

    dfd9 PlowSite.com Addict
    Messages: 1,475

    That's an interesting first post.

    Should be interesting.

    Funny thing is that you did not address the issue at all. What are the costs of each company? What are the profit margins desired? What is the overhead of each company? Just because someone has payments does not necessarily make their costs lower.

    TCLA is correct, your example is flawed. Actually not even close to taking into account everything that needs to be in order to debate this issue.
  7. Hunter9

    Hunter9 Member
    Messages: 64

    Example is flawed, the 6k you leave on the table in your example is what will put you out of business. The 6k is the capitol needed to reinvest in new equip when the day comes.

    Everyone has different overhead, mine is almost nothing because I can plow for free if I want, I do it because I enjoy it. I own 9 properties I have to plow anyway. So I plow some additional properties to cover gas money, maint and to cover some costs....all the while I have a nice full time income that would allow me to plow for ridiculously low prices....hello $25 hr or less and honestly not bat an eye doing it.
    Of course I do not do this because I respect that others are doing this for their primary income and the market price should be maintained by all to help all sustain an existence no matter the overhead. Why cheapen the market value of what we do, those that are uneducated already do that enough. I run between 75-80 hr and that is in the middle of the market prices in my area. I price accordingly regardless of my cost of doing business.
    Besides who in their right mind would leave 6k on a bid?? They must be nuts.
  8. Italiano67

    Italiano67 Senior Member
    Messages: 645

    I get a kick out of those that think after you own your equipment outright you can do jobs so much cheaper. Payments or owning them makes very little difference in what the job should be paying. You have to buy newer and maintain your equipment eventually and if you arent banking good green you will have to start all over with equipment that is alot more to buy new or used than your previous equipment. i dont know why i am even wasting my time responding to this thread. Maybe I need a vacation.
  9. swtiih

    swtiih PlowSite.com Addict
    Messages: 1,179

    Welcome to plowsite. As long as you have the courage to be so bold to say what you say. Would you also be wiling to share some of your costs as well as charges and income. List of your equipment. and a breakdown on cost for each.
    Insurance cost - equipment & business.
    Fuel cost.
    Maintenance cost
    Book keeping / accounting.
    List how many hours on average you plow per season and what your revenues are.
    How about money to pay yourself and the end of the day.
  10. SDLandscapes VT

    SDLandscapes VT Senior Member
    from Vermont
    Messages: 315

    devaluing assets.....lights on no one home
  11. Eronningen

    Eronningen Senior Member
    Messages: 447

    I have been blessed enough to write checks and/or have all my equipment paid off, DUH, why didn't I realize I should be charging much less for my services? Gaul darn it anyways, I never figure things out on my own...............
  12. lilpusher

    lilpusher Senior Member
    from Indiana
    Messages: 140

    See you screwed up. Don't you know you could charge more if you were in debt to your eyeballs. :). Ok now I'm just posting cause I'm OCD
  13. StuveCorp

    StuveCorp Senior Member
    Messages: 341

    I don't know, if I had a loaded cougar paying for everything I would plow for free... Thumbs Up

    Anyway, what are we arguing about now in this thread? :p
  14. tjlands

    tjlands Senior Member
    Messages: 579

    Interesting first post.
    Most likely you dont have a clue.

    Or maybe something even better?
  15. sectlandscaping

    sectlandscaping Senior Member
    Messages: 315

    The nationals dont find a cheaper way to do it they bid it real low, Keep half and then hire someone like you. The rest of us laugh at them when they call.

    I can make more money subbing for DOT then most companies charge working for themselves. If that doesnt tell you something I dont know what will.
  16. Flawless440

    Flawless440 PlowSite.com Addict
    Messages: 1,543

    Who cares about your overhead????? Why drive the prices of the snow industry down???

    Might as well sign the contract then get your check book out and right a check back to the contract for the difference. I try to make the contract write the checks, not the other way around...

    You are by far the bestest lowballer out there, congralations Thumbs Up
  17. bradlewislawnca

    bradlewislawnca Member
    Messages: 59

    if a piece of equipment costs you $80k today or $3k a month you still pay roughly the same amount so having it paid off only says that you did not want to pay interest. So you have the same costs. Now if you are making payments and keeping the 80k for operating cash, then you are manipulating cash flow (which could be positive). In finance it all comes down to opportunity cost. if you pay off the machine then you can't invest in something that nets a higher return like stock in mcdonalds last year (30% return). So if you like risk you could have made a lot more by financing instead of paying off, but you still has the same cost. so your price should be the same.
  18. csi.northcoast

    csi.northcoast Senior Member
    Messages: 320

    not to be the A$$$ of the group but i run my company like the fed gov't....run it at a loss and let my kids pay the debt......isn't that the american way???
  19. sectlandscaping

    sectlandscaping Senior Member
    Messages: 315

    Thats hilarious and we still charge $400 for a shovel.
  20. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    Sometimes posts just rattle around my noodle a while until I have a good thought.

    So what I'm thinking is this. If you have lower operating cost, then that means that you can potentially take on less profitable jobs at prices set by others. I'm not saying just roll over and take a Wal-Mart Parking lot for 10k a season because you got salt from a guy at $30 a ton and have all your equipment paid for, but even during the negotiations, you can take a property for less than what it is "worth" in the eyes of others.

    Now, with open bidding on contracts, that doesn't mean that you should low-ball the crud out of it just sow you can win the account. As far as I'm concerned, setting a market price is part of good business ethics that not only benefit your company, but others in the industry.

    I've stated on this site before, that some of the "visibly" successful snow companies in the area are severely driving down prices for services to where it's hard to compete with their bids. I say visibly successful as they might have all this nice shiny equipment, but you don't know what their over-head is. And sometimes I feel that they are bigger and just trying to feed the pig in order to keep operations going.

    My goal in this tough economy, is to take any reasonable business that is handed to me, and also to bid higher on open bid contracts. This type of business growth is way slower than the high volume game, but will be much more profitable 10 years from now when my client lists reach a good point and has good pricing.

    The larger companies in my area have been around for the last 30 years or so. They've seen ups and downs, just like what we are seeing now. So who's to say they aren't doing something right, but, if the economy stays stagnant as it is now, I can only wonder how they can keep running on the same business strategy as they are now.