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Nationals - are you kidding

Discussion in 'Business Fundamentals' started by joe2025, Dec 21, 2012.

  1. joe2025

    joe2025 Member
    from NEPa
    Messages: 56

    So I receive an email from one of the nationals the other day and she tells me that she has 100+ accounts that need servicing in my “zone”. So naturally I’m interested and I ask for a few answers before we can proceed. I asked where the “zone” was and can she give me the address of the properties so I can do a site survey. I will not give anyone a quote for services, snow, landscaping or lawn care, without visiting the site first. Well she emails me back with a picture of the zone. So I open it up and see that from North to South the zone is about 75 miles from end to end and about 50 miles wide. OK so I move on to the answer about the addresses and she tells me that they are confidential and she cannot supply me with them due to client confidentiality. Now I’m thinking to myself what the heck kind of BS is this.

    So I again explain that I cannot give a quote without a site survey but I am still interested in growing my business. So then she sends me this long assed email with a company manual attached that explains their policies for snow management. Before I open it I read the rest of the email and she tells me that they pay $37.50 per push with a 4” trigger. So then I open up the policy hand book and cannot believe what I am reading. They supply you with pictures which they require for you to get paid which is no big deal but what I look at is the size of the properties. Some are small, worth about the $37.50 but most are more in the $50 to $60 dollar range. They want them plowed, sidewalks shoveled, paths to the doors cleared, steps, porches cleared and after all that you are required to salt. The real killer is that you cannot return to the site for 24 hours to finish up the job if it requires two visits.

    So by now I can’t believe that someone in the business of keeping clients and businesses safe during a snow event would even think of leaving a property sit for 24 hours but that these companies have the nuts to tell me how to preform snow management services. Like where did you learn how to do this, out of a Cracker Jack box? So to top it all off I ask if I sign on what’s to stop you from telling me that I have to go to a site and clear it and then the next one you want me to do is 60 miles away and nothing in between. I state that how am I to pay two employees for their time on $37.50 per push. All I wanted was an explanation on how they think that their business model will produce profits for a snow management company and could you please explain it to me and maybe I might still be interested. And I also asked who would be responsible if someone were to slip and fall and we had to tell them “we’ll it’s not our fault because we were not allowed back on your property for at least 24 hours.” Her reply was simple and to the point, she said I understand you r concerns but we cannot change the company policies. That’s it, that’s all she had to say and nothing more.

    And we wonder why this industry is going to he!! As fast as it is. How do these companies manage to survive? Are there that many companies that are so hard up for work that they are willing to go and take accounts that won’t even pay for the fuel let alone labor and materials? To me companies like this should be forced out of business just like some scam artist would be. To me they sound and act like they have no idea how to run this type of a business. I’m amazed that they are in business making money on the backs of others. Why not just turn over everything you have and tell them to call it even and enjoy the money you stole off me.

    Just blowing off some steam here because this is really bothering me that scam companies like this can get away with it and remain in business. If someone tried to rip off people in other ways they would end up in jail so my feelings are that a company like this is no better than a thief that steals off of someone who works hard for what they have.Can't these companies be reported as scams? Or am I missing something here?
  2. csi.northcoast

    csi.northcoast Senior Member
    Messages: 320

    unfortunately, snow removal has become a nuisance expense such as garbage pick-up. It is an expense a company has to pay, and the nationals promise two thngs. lower cost and little if any liablility on the store. (it is all on the contractor). sad but true.

    As long as they find someone to do the work and accept the liability, they will continue.

    At the end of the day, the quality aspect of our business is fading away.
  3. Laszlo Almasi

    Laszlo Almasi Senior Member
    Messages: 326

    I agree with CSI.

    And Joe, I had essentially the same thing happen to me and I lost my largest chain up in MD and Northern VA. It happens all the time...a national comes in promising lower expenses on snow removal then turns around and wants the original companies to accept their offer of a fraction of what the job used to pay. I personally think the end customer (site owner) will pay the price which will end up being worse service.

    What did I do? I just told my original contact person that when things go awry and they need it done properly, to give me a call. He doesn't know that it'll cost him more than it originally did when I did it but in my opinion, that's just business. If you don't want to show any loyalty to me, then why should I offer you any loyalty on pricing. My out? The pricing structure original quoted was a contract price. I charge more for a call out to a non contract job. It is what it is. I also try to get in to a business within eyesight of the old location and get their business and make sure I go above and beyond to provide a better end product so the original site owner/manager can see it and say...hhmm...I think we may have made a mistake.

    My experiance has taught me that you need not be the cheapest...you just have to be better.

    BTW, what national company was it if you don't mind me asking?
  4. Kubota 8540

    Kubota 8540 PlowSite.com Addict
    Messages: 1,963

    Simple. Just stop working for them. Don't bid for them. Contractors are hurting themselves when they are willing to pay a Snow Management Company profits for doing NOTHING. I just recently talked to a contractor from Indiana about a snow management company that has 800 accounts there. They don't own 1 truck. Simple, nobody plow for them, in less than 1 season they are no longer in the business?

    Anybody willing to plow for these companies are just hurting themselves. That's NUTS!
  5. Laszlo Almasi

    Laszlo Almasi Senior Member
    Messages: 326

    I agree 125%!!!

    Now, if we could just get contractors to stand up for themselves and not plow for them.
  6. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    OK, I'm going to have to disagree to some extent.

    I do work for BFS. I have had nothing but a good over-all experience with them.

    I do one large snow account and a good list of summer work for them.

    Sometimes the pricing is great, sometimes not the greatest.

    Communication with them is great. I have no problems reaching the people I need to talk to about accounts and any issues that may arise.

    Payment is fast and on time, and if there is any issues, it gets corrected immediately.

    I also don't have to deal with each accounts managers. I deal with one guy and get all the information I need through them. And from what I've heard, some of the contacts for these accounts are pretty nasty.

    They have stayed loyal to me and that's better than most local business owners. Even though I tend to haggle with them on pricing, they are still able to work with me and they don't just drop me and go off and find another contractor just because they might be "easier" to deal with.

    Earlier this year, they sent me a list for three properties to review to see if I wanted to do them for snow removal. In a nutshell I turned them down due to the fact they couldn't come up on pricing. Did this hurt me? No, I don't think so as I got reassurance from them that I was still on the top of their list, and I was honest, I didn't want to even try to take these accounts and fall on my face and make them look bad.

    Part of it is also is the bottom line for corporations has gotten a lot skinnier. I'm sure that these nationals get extremely beat up on pricing just like the rest of us do.

    As for pricing. Locally, large or small, contractors are driving down prices to crazy low levels worse than the Nationals do. The one large snow account we do for them pays per season. From what I've found out, the year before the nationals took over, it went for half of what I'm getting paid to do it which is absolutely crazy.

    Now, I will say there are the bad apples such as what the original OP had posted. That's ridiculous. And, not everyone's experience with a National is the same.

  7. OC&D

    OC&D PlowSite Veteran
    from Earth
    Messages: 3,064

    That sounds like an asset management company in charge of residential foreclosures, specifically, it sounds like Safeguard, who a friend of mine does work for. I'd steer clear, if it were me.
  8. Jim74

    Jim74 Member
    Messages: 50

    It's not confidential info if they are looking for a bid, they just don't want you going after it. I wonder if the customers ever see the nationals contracts for the subs, if I had a property that I needed serviced and saw that there was more effort put into passing off responsibilities and useless requests than actually servicing my property I'd be a little nervous.
  9. joe2025

    joe2025 Member
    from NEPa
    Messages: 56

    OC&D, it was Safeguard that contacted me. And I will stay clear of them. But it’s not just them it’s a lot of so called national companies that make it even harder to try and make a living doing what we want and like to do. White Gardens seems to be doing ok with the company he’s working with but I still do not agree with doing any business with any of these companies. So they managed to get a 100% increase on an account from the year before. Well if they are paying 100% more. How much are they really willing to pay? They are taking their profit off the top and in my opinion this is profit that should be in your pocket sine you’re the one doing the work. So they put up with dealing with the customer and you don’t have to. To me that is part of what I like about this business is dealing with different types of people. If I didn’t want the hassle then I would just go work for someone else and never have to worry about dealing with people again.

    When a company is looking for a company to sub out work to and doesn’t even have the professionalism to continue a dialog about the work they are trying to sub out and just plain out tell you there is no room for negotiations then they can go pound sand in my books. Every legitimate business has to fortitude to communicate with people or companies they want to do business with. I can go on and on here but to me the bottom line is that if I am doing the work and it is my company and my family that I need to support then I will continue to deal directly with my clients win or lose contracts.

    There are two sides to every story and I’ve heard and read some good things about nationals. Someone even said get used to it because sooner or later they will have a majority of the commercial accounts. That may be true but I will do everything in my power to continue to get my own accounts and run my business the way I see fit. This is the third company who tried to get me to deal with hem and everyone had the same attitude, take my $37.50 and do it our way or don’t talk to us. PERIOD. Well then I guess I won’t talk to you PERIOD. Now if they we’re professional enough to tell me that they had 50 accounts within a 30 mile radius and I had a shot at getting a good portion of them, the it might be worth it to bump up sales in a large chunk. But again if I do them for $37.50 then the next guy is going to do them for $36.50 and so on and so on until we reach zero and then we are all out of business. I just landed a five year seasonal that the company that was doing it might think that I’m a lowballer. But, even in a bad year I figure I will still make my percentage of profit that I try to hit with ever account I bid on because of what “my” cost are. Just like everyone on this forum tell everyone who is looking for help on a bid. But I’ll be dammed if I will give any of my profit to a company whose only job is to process paperwork and from the sounds of it has never been in the field. Just my 2¢
  10. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    You do make great valid points joe.

    As for us working for a national, like I said, I know when to say when and not give in to accounts that just aren't worth it.

    It's all balance for us. The national that we work for has helped us increase volume while still trying to build the other parts of the business, so if we loose some of these national accounts, then it's not such a big hit.

    As for the desk jockey's at these places, the ones I have dealt with have had some work experience in the industry. The area market manager actually goes to all accounts one to two times a month to over-view the accounts and talk with the property managers on site. Our market rep actually travels most of the state.

    As for BFS, from my knowledge and candid conversations; they are actually a younger company in the realm of nationals. They are still working out kinks every year to make payments and operations smoother, hence some of the bad remarks you hear on this site where some say they are bad news about payments and communication from the earlier days. They also stated that some of the earlier estimators working for them did some bad estimating on sites and were stuck on the pricing of some of these sites, and I can see that to be true if I get requests for work where the pricing is way low. My guess is that they understand they have to stick to the agreed pricing for a duration until they can approach to increase pricing.

    Where we have done extremely well with BFS is the summer work and the "add on" services. We can price out jobs accordingly and don't get beat up on those extra services and do really well. On top of it, because of the agreements between BFS and the accounts, there is no other bids submitted.

    Not to say that some of the add-ons don't get turned down though. These corporations run a tight ship and sometimes it's not in the budget or gets put off until the following season.

    Again, there are good nationals and bad. We just seem to be in a good position with one right now and I'm not complaining. It's the new game when it comes to larger commercial chains albeit regional or national chains. If you can make it work, then go for it, but be careful with who you deal with.

  11. joe2025

    joe2025 Member
    from NEPa
    Messages: 56

    White Gardens, I’m glad to hear that in your area you are doing well with a national company. I set a growth goal for 2013 and will work my ass off to get there. I’m not a young guy and with a mortgage and family to support I finally have an opportunity to run my business full time and not have to work for some other company for the first time in my life. Be it an office job, management position or production worker. I’ve had them all over the years and this is something I should have done many yeas ago. I’m doing pretty well for being a “young” company and have a lot invested so with that being said I say good for you and your business but unless the right deal falls in my lap, I’m not going to go that route. I have some connections with some local banks that I am set up with to service bank owned properties so we’ll see if we get anything from them.

    I like to think that I can get involved with companies that are in the foreclosure business and instead of being a “national” provider I want to offer “regional” home town businesses opportunity to them. I guess it’s my way of thinking how do I cut out the middle man and in this case the middle man would be the nationals. Call me old fashioned but I believe that if you work hard you will be rewarded for your efforts. I also feel that this entire field, (lawn care, landscaping, snow management) has and is getting a bad rap from all sides. For those of us who want to treat it as a profession it is nearly impossible to portray that to the public in a lot of cases. I mean how to you bid competitively againd a junior high student who wants to cut the neighbor’s lawn for $10. It cost me more than that to wake up in the morning. It’s tough enough without someone else wanting a cut of the pie because they can seem to take a piece on someone else’s back. Welcome to American and free enterprise. That part I get and no matter what I say it will not change but what I can do is plan my plan and work it so that I can get to where I need to be. I’ve already decided to go after mostly commercial accounts mainly because by doing so it cut out the majority of the beer guys because 1 they do not have the equipment and 2 they don’t have the insurance so it makes for a level playing field.
    So since I got off the original subject I’ll finish by saying for once I’m all for the government and the IRS. Crack down hard on the “companies” that are out there doing business without the proper insurance, licenses and professionalism and give the businesses who take it seriously as a profession an opportunity to be successful.

    Been a long day today, Hench the rant. I tend to do that when I’m going on 2 hour sleep in two days. At least I can send out some invoices for snow management tomorrow from today’s ice storm. Good luck to everyone this winter and I hope we all end up with some profits this year.

    ’98 ram2500 7’6 Western
    ’01 F450 7.3 power stroke 9’ Fisher
    ’98 Case 580 Sl 12’ Pusher
    ’07 Ram1500 Quad Sidewalk Crew Truck
    Snow blowers
    And a lot of shovels.
    And a big pile of salt.
  12. OC&D

    OC&D PlowSite Veteran
    from Earth
    Messages: 3,064

    To give you a little background. Fannie Mae used to use a company called FAS for all of its inventory here in MN. Fannie Mae specified a 1/2" trigger. The pay was excellent, and my buddy was making really decent money considering he had to take before/after pics, and upload those as well as other info on their website to get paid. Granted, what he was making on them more than justified the added work.

    Fast forward to this past August or so. Fannie Mae pulled all of their MN inventory from FAS and gave it to Safeguard. When this happened, the dollars substantially dropped and became a flat fee. Safeguard also divides things up into zones, those zones could be huge, which obviously has a substantial effect on anyone's bottom line. Consider that, AND the fact that even after we received 12" of snow a couple of weeks ago, but buddy hadn't actually been assigned any work yet. His assumption was that he'd be doing all of the same accounts he had for lawns, which were over 300. When he contacted them to inquire about the work, since we'd just had 12" of snow, he was told he should contact the listing agents of those properties so they could contact Safeguard for service! :eek: Imagine trying to contact listing agents for 300 properties just so you could get some work at a rate far below what it should be. Further, he was told that the trigger for Safeguard is now 3"! :eek: To make matters even worse, their website for uploading invoices is sloooow as heck during the day, so he'd often stay up all night entering the invoices and pictures of his lawn crews. He said that if he tried to do it during the day, it could take him up to 15 minutes PER INVOICE. Even at 10 minutes per invoice, for 300 accounts, that's 3000 minutes, or 50 hours!

    Needless to say, I think you made the right choice.

    All that said, there are asset management companies that are decent to work with, such as FAS, but personally, I've got enough work already.
  13. 32vld

    32vld Senior Member
    from LI, NY
    Messages: 622

    The reads to me when you average them up you are not doing great by subing for them.
  14. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    I never said we took the accounts with the not so good pricing.

    Besides, even if we did, they generally still fall in line with what the top teir companies are pricing grounds maintenance at.

    It's pretty bad locally for commercial accounts.

    I put a bid in for 12 McDonald's locations around the immediate area a couple of years ago. Us and the next top company in the bids bid it out for 65K. All inclusive and every thing under the sun was provided at each store.

    Winning bid was 25k for 12 locations. That's only a shade over 2k for each location. That included mulch, fert/squirt, hedges, etc..... The owner is anal retentive also, so the places had to look immaculate.

    Last edited: Dec 28, 2012