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Making money on "seasonals" ?

Discussion in 'Business Fundamentals' started by Sno4U, Jan 13, 2005.

  1. Sno4U

    Sno4U Senior Member
    Messages: 480

    We run about 30 snowplowing accounts. Two of them are "seaonal" accounts. How do you know if your making money on them? Do U have to wait to the end of the season to finally tally your man/hrs aganst what they paid? Obvoiusly, you really can't even do it month to month b/c there are gonna be peak months which are gonna make numbers skewed. What do U do?
  2. SGLC

    SGLC Senior Member
    Messages: 132

    U want to base your numbers on how many plowable events you think you will have. If u have 10 a year then u base a price on 12 events or 13 or so forth. U want to leave some breathing room. You kinda have to know what each season is like so you can find an even medium of events to charge for. That way if you get 13 events well you are covered, if u get 9 events u make extra for doing nothing and if you get 15 events, well u just didn't make as much.
  3. cet

    cet PlowSite Fanatic
    Messages: 7,257

    You will have to wait until the end of the year. There is no telling when a light or heavy period is going to hit.
  4. SGLC

    SGLC Senior Member
    Messages: 132


    I tried to e mail you with a couple questions I had but couldn't and same for the pm. I don't think its possible for me yet.

    If u could, e mail me at sglc@rogers.com
  5. DJL

    DJL Senior Member
    Messages: 343

    IMO it is not very easy. It depends on how accurate your estimates or averages are. Basically I approach it by tallying all of my 'fixed' expenses for season (i.e. plow maintenance, insurance, phone, etc.). I then figure my total for variable expenses (i.e. plow repairs, fuel, parts/material, etc.). I try and get an average cost for expenses. I then average the number of snow storms for the season as well as total hours expected to plow. Now, these are not that accurate but the more years I'm putting on my belt the better I'm getting at it.

    With the two numbers (expenses, hours) I figure a bottom line...so to speak...for my hourly wage. I then factor in a desired hourly income. With this in my back pocket I use this as an estimate for lots/driveways.

    To answer your specific question I can track how I'm doing by tracking my expenses versus my estimated expenses and # of storms.
  6. JRDabs

    JRDabs Junior Member
    Messages: 26

    As stated in one of the previous posts, you need to have good historical storm data. You then base your estimate off of the estimated average snowfall. Lastly, your seasonal contracts should be multi-year. You are playing the law of averages. You may win some years and lose some years but it should average itself out. Remember, you are balancing your portfolio to ensure revenues are coming in when it does not snow much.
  7. cet

    cet PlowSite Fanatic
    Messages: 7,257

    JRDabs is correct where you have to have multi year contracts. I still look at is this way. If my average snowfalls is between 15-18 and it snows 21 I am out the time and gas for the extra 3 snowfalls. All my expenses are in the 15-18 pricing. If I am plowing by the snowfall and it only snows 8 times I have to cover all my overhead in those 8 snowfalls and there might not be to much money left. There are pros and cons to both and I have a mix of each which also helps on the real bad years.
  8. drplow

    drplow Senior Member
    Messages: 174

    i base all my residentials on the dozen rule. if the average season reaps 12 plowings then if there are less i make more loot. if i plow more than 12 times, my profits will fall. you cant plow for one year and figure it all out, but after a few, its a breeze.