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Need answers ASAP

Discussion in 'Introduce Yourself to the Community' started by snowscapemn, Nov 2, 2005.

  1. snowscapemn

    snowscapemn Junior Member
    Messages: 10

    First, thank you for any help you can give me.

    :help: I have the opportunity to takeover 9 plow sites. These include 4 restaurants, 2 churches, 2 Auto Shops, and one other commercial site. This will be my first year plowing and I am wondering if I will be able to handle all of these? They are all about the same size, nothing too big. They are about $75 per lot, per fall up to 10" per fall. The current owner of the contracts wants the first snowfall and 10% for the season, I feel that this is fair, and then next season I would own them fully. Please give me any input and advice. I live in Minnesota, so you know how it is for snow. The other possitive thing about doing this plowing is that I get the lawn contracts in the spring also, if I do the plowing. Thank you.:help:
  2. Olderthandirt

    Olderthandirt Member
    Messages: 74

    $75 for up to 10" iseems cheap and a poor way to stucture a contract imo
  3. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    You're getting royally ripped off. He wants "the first snowfall"? Does that mean you plow and he gets all the money for that time? Or he's plowing the first snowfall and then you plow all the rest and give him 10% of the money? The money you're showing as income for those sites is a joke. Besides that, are you getting the same amount regardless of how much snow there is up to 10"? That's ridiculous. Then what? So much more per inch over 10"? What happens if it's snowing during business hours? Do you have liability insurance for these commercial places? How much insurance does each place require and can you meet those requirements?

    Have you seen the contracts? Are they for multiple years? How is he going to "give them to you" if he doesn't have them under contract for those years? What assurances (besides his word) that you'll get the lawn contracts in the Spring? Does he have contracts for them, too, and for multiple years?
  4. snowscapemn

    snowscapemn Junior Member
    Messages: 10


    :dizzy: None of the places required insurance, so I dont have to worry about that, but I might still get it just to be safe. He just wants the first plow money and 10% of the season because he spent a lot of time working on getting these contracts. The problem with not taking these is that someone else is going to. Over 10" the price goes up, not sure exactly how much yet, because we are meeting later today to go over more info. I thought that this would be a good way to make some money because I dont have any other jobs this winter. What is a good price to plow these lots? Thanks again for the information, any info I might not know about would be great too. Thanks everyone:dizzy:
  5. ynvvbr

    ynvvbr Member
    Messages: 68

    You should get insurance no matter what. 4 Rests. alone you have so much traffic that if someone falls your up the creek!!! As for if thats a good price, i dont know about your area but we would not accept 70 dollars for plowing 10 inches. Lets say you have to plow every 4" thats 3 trips you have to make or $23.33 each trip roughly, now subtract gas, your time, salt for the lots insurance, etc etc etc. Your gonna lose your tail man, you need some square fottages on these sites before anyone will give you an idea of price, but. Look at it this way you can pick up one location and MAKE money on it and only have one headache to deal with rather then 7. but its just my opinion.
  6. kingriver

    kingriver Senior Member
    from alaska
    Messages: 216

    ok the way I see it is he will end up with $675.00 1st push, then 10 % of GROSS FOR your season. Am I understanding you right ? If it snows alot your fuel, maintenance, and any other misc expenses you could be in trouble, tell him/ if hes persistent, that 10% is alittle high, play your cards. Also I would tell him off of NET- only bad part you may have to doctor your expense sheet alittle, Im not saying (lying), fix the truck back up at the end of the season, u-joints-balljoints any misc that needs replaced. Sure hope it works for you..
  7. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    General liability insurance is not optional - it is a requirement. You are putting too much at risk without it. Especially with commercial accounts.

    I can't possibly give you an estimate of price without seeing the locations, but here's something that might help a little. Get the measurement of the site. An acre is approx 43,000 sq ft. A wide open acre will take approx one hour of time. So you'll need to figure backdragging involved, obstacles, return trips for parking areas etc. Now take your hourly rate - an average is $125/hr for a 7.5 plow - and multiply that by the time you expect it will take. Allow extra charges for things like trucking snow off-site.

    But without the proper insurance, you are putting everything you own - and hope to own - at risk.

    I agree with kingriver to an extent. If you have multiple year contracts, I'd agree to 10 of net, but not the first plow. If he doesn't have multiple year contracts, I'd pass and pick up some of them next year. But I wouldn't do take them at the rates you're showing regardless. At that rate, you could sit in front of the TV, drink coffee and come out ahead. Maybe he realizes that and is trying to pawn his mistakes off on you. He'd definately come out ahead.
  8. All_Clear

    All_Clear Senior Member
    Messages: 206


    Get GL insurance and go put your bids in to the places.... Use the fact that you have insurance and provide great timely service and see if you can get the contracts.

    Or maybe just start smaller by putting out bids to other locations.

    You could really lose alot on that "deal"
    No insurance
    Paying someone else part of your "profit"
    Pricing is very odd... 1 bad winter could put you out of business fast!

    Just my 2 cents

  9. snowscapemn

    snowscapemn Junior Member
    Messages: 10


    I dont know if I made it confusing, but the 10" thing is per plow. So say it snows 10" before I plow(thatd be bad) Then I would get the base price. However, If it snows say 4" in the morning, and 4" at night I get paid twice, this isnt a cumulative up to 10", just 10" per plow. Thanks for all of the info. Anyone know the average rate for insurance, and what kind I should get to plow. Thanks guys/gals.:waving:
  10. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Insurance - you want General Liability specifying "snowplowing" and Commercial Vehicle to cover your truck. Your regular vehicle insurance will be void if the truck is used for a commercial venture. Cost will depend on many factors, including your state, location within that state, your age, experience in the business, types of accounts, amount of coverage and claim history. I've heard everything from $800 to $3000.
  11. kingriver

    kingriver Senior Member
    from alaska
    Messages: 216

    I have a Contractor's Liability coverage policy, and all of my vehicles (5) have commercial coverage with plowing coverage indicated. Our contractors policy cost me around $600.00. Food for thought, all your insurance is actually rated on your credit :cool: and all those other things. My policy is a large policy since we do work for the schools, I actually have 2 million general liability policy.
    Last edited: Nov 2, 2005
  12. kingriver

    kingriver Senior Member
    from alaska
    Messages: 216

    (sub contracting ?)

    After I re-read this thread it dawned on me that you are dealing with the previous plowing contractor, so you are subbing your business out, correct ?:cool:
  13. snowscapemn

    snowscapemn Junior Member
    Messages: 10


    I am taking over the contracts for this guy because he started a new job and has no time to do this at all. I dont know what I should do. I feel that this is a great opportunity for me because I will have no other job this winter and I enjoy working by myself. Also, only one of the places requires salting, so that is nice. I dont know, I have been talking with the guy and we are going to meet again to further go over stuff. Thanks again for all of the help!!:angel: :waving:
  14. slade

    slade Senior Member
    Messages: 142

    Like others have said I would try to do 10% of net not gross. I got my liability ins. for $300. The bottom line is you think it it fair and you want to do it go for it.:)
  15. kingriver

    kingriver Senior Member
    from alaska
    Messages: 216

    Sounds like you are really interested in this job, so I would have to say go for it, and if nothing else--we all learn from our mistakes--and I'm not saying that you are making one, but remember (you got to know when to hold em) ( know when to fold em) play your cards right and GOOD LUCK TO YOU !!!:cool:
  16. Gicon

    Gicon Senior Member
    from MA
    Messages: 989

    Snowscape, is your name Tucker or Sucker? Your crazy. Let that guy keep those accounts. I wont go to a commercial lot for $75. Do you know how many times they will want it done up to a 10" storm? You cant just go once. Stay away from that deal. Then the guy wants 10% for the rest of the year....wow
  17. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    I always tell a person to do what they want, and I think that's what you should do. But I have to ask - Considering that all the advice you got here was one-sided against taking this deal and giving you reasons for that advice, if you weren't going to take it why did you ask for it? The fact that he took another job and does not have time for it is not your problem. Actually, it could work in your favor. He backs out of his deal with them and you rush in offering your services for the winter - at your price. No need to give anyone a cut.
    Last edited: Nov 6, 2005
  18. Kramer

    Kramer Senior Member
    Messages: 386

    My 2 cents:

    1 / get insurance figures BEFORE you sign up. Try for around a million in general liability and as said, make sure snow plowing is included. If you're shoveling and salting make sure the insurance company knows everything you're doing.

    2/ without seeing the lots, its impossible to suggest a price, but because it seems to be your first year, it sounds like you're biting off a lot. Is the guy you know ggoing to back you up if you breakdown??

    3/ liabiity on what you described is very high. Also, if you're the only truck, cleaning lots at a running store takes a ton of time---people are always in the way and you have to be VERY cautious. Please remember that when its snowing hard, all these places will want you there at the same time. Also keep in mind special functions at the church and weekend and other days Mass clearing.

    4/ As its your first season, I woult try to investigate charging by the hour. If your friend sas he takes 1 hr to do something and he's experienced, then it might take you 2. Do you have someone to clear walkways or is that you??

    5/ How close are the properties?? What windshield time do you have ???

    6/ with regard to the 10% he wants, that seems high, but if you want to do it go ahead. Remember that next year, the areas are up for grabs and if his new job craps out he might be back to compete with you. You need to formalize any contract as much as possible---his word is worthless, no matter how well intentioned.
  19. Runner

    Runner Senior Member
    Messages: 957

    The guy is taking advantage of you. Let him find someone else (a professional contractor who is insured and experienced) to go plow all those jobs for free on the first night. :rolleyes:

    Give me a break! And up to 10 inches!!!???? HA!!! I'll give you a hint....here is our schedule...
    2004-05 Price Configurations Schedule for Snow Removal

    Up to 4 inches - 100%

    4.25 – 8 inches - 150%

    8 - 12 inches - 200%

    12 -18 inches - 250%

    18+ inches - 300%

    Now these were prices from last year. Does this wake you up a little? Have you ever pushed 8" of wet snow?
    I'd bet THIS guy is billing for it! If he isn't,.....he's probably working a job somewhere by now and giving up his plowing career:cry: .....Oh, wait a minute.....that's what this thread is about, isn't it???:nod: ;)
  20. snowscapemn

    snowscapemn Junior Member
    Messages: 10


    Sorry I havent responded in a while. But thanks for all of the help...As of what happend...I gave the him my bid, after meeting with him 3 times in his area(half hour away). Then I received a call from him stating that another company offered him $xxxx.xx amount....which was only $25 more than mine:angry: ...I told him that it was ridiculous he would screw me out of the deal for $25 after all of the time I spent meeting with him....As for the whole deal I am glad that I didn't take the deal, although I would have loved the mowing accounts, I realized that I now can put my time and effort into building up my own company with my own hard work....Success is only a word if you never achieve it. Thanks again for all of your help...:drinkup: