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New Equipment Purchase (I Need Help)

Discussion in 'Commercial Snow Removal' started by River Hill, Dec 8, 2002.

  1. River Hill

    River Hill Senior Member
    Messages: 102

    I will start out by telling everyone I am in Maryland, and as you know we don't get a great deal of snow, but we do normally get a few storms a year. I want to make a new equipment purchase, but I don't know what to buy. As I was out working the storm the other night, at a new complex there were some new contractors at another site. They did not have one truck with a plow and we were just amazed at how quick they cleared the lot.

    They were using a Bobcat with a regular bucket and a tractor with a bucket. I was amzed at the tight areas they could get into and at the speed they could stack snow and clear against buildings and curbs.

    If your you were to purchase a piece of equipment, that most contractors would desire what would it be? I am asking this, because most of my work is subcontracting. I was thinking of a tractor, skid steer, track steer, or mabe even a loader? Would you put a push box on it to carry snow or a blade? I would like to be able to drop this eqipment off on one large site that has a great deal of islands and just work on these 10 buildings without the need for other equipment.

    Maybe there is something better that I have not even thought of?

    One more thing, I will want to be able to tow it with a 1 ton truck.

    Have fun
    Last edited: Dec 8, 2002
  2. chtucker

    chtucker Senior Member
    Messages: 618

    Skid steer by far...

    Do you know how much they cost????

    30k+++ New, about 20k used and I don't think you want to cheap out and buy something without a cab.

    5 years at 3.9 = 700 a monthon my cat 246... (36k)

    Do you really think that you would be able to even make the payments at 700 a month? 10 Plowable events x 12 hours each event x $75 hr = at most 9000 a season. 8400 a year in payments. You will NEED liability insurance and property insurance on something like that for sure. Don't forget maint., repairs, AND YOUR TIME.

  3. River Hill

    River Hill Senior Member
    Messages: 102

    I am getting $90 and hour with a V Plow. I would think I would be around $120 or $125 with a different piece of equipment. What type of blade or push box would you recommend?

    We received a 8" storm last week and I was out for 27 hours with the V plow, so yes I do think I should make the investment in something.

    Whatever I buy, I could get a person to run it and pay them $25-$30 an hour and keep the difference:D
  4. citybobcat

    citybobcat Junior Member
    from NYC
    Messages: 18

    I would look into a used skid steer aka bobcat
    I use a ford f150 with a fisher power angle and a dodge ram 150 with a western power angle but nothing beats my Bobcat 753 for tight spots and for piling the snow out of the way don't buy a new bobcat now they usually have deals in october and november you get a new 753 with a bucket and a plow for around 18k or $299 a month that also includes a cab with heat
  5. General Grounds

    General Grounds Member
    Messages: 66

    :rolleyes: i have 20 driveways in one devlopment and i park my skid steer at a customers home and i put my guy in the CAT and he goes to town, 2 1/2 hours to do 20 driveways @ $75 per pop, every six inches. this past storm he did them twice, not a bad day. i also had 3 trucks doing other plowing the skid is well worth the money, esp when you can use it year round. i paid a little under $25,000 for my CAT 226 with cab and heat, bucket and forks. awesome customer support, had a leaky filter they came to me w/i and hour and not only changed the filter but gave a complete service as well. tony
  6. chtucker

    chtucker Senior Member
    Messages: 618

    I understand, and I am not trying to be a jerk. I just know what headaches this can get into.

    Average January temperature range –3.9° to 5.6° C 25° to 42° F
    Average July temperature range 19.4° to 30.6° C 67° to 87° F
    Average annual temperature 12.8° C 55° F
    Average annual precipitation 1016 mm 40 in
    Average annual snowfall 559 mm 22 in
    Mean number of days per year with appreciable precipitation 113
    Average daily relative humidity 66%
    Mean number of clear days per year 106

    Lets use a fudge factor of 1.5

    8" took your 27 hours. 40 inches should take you about 4-5 times longer??

    5 x 27 = about 135 total hours plowing per season
    $125 per hour x 135 hours = 16875 in gross revenue

    employee costs:

    25 per an hour plus approx 30% in payroll expenses (workmen's comp, fed taxes, state taxes and unemployment taxes)
    25x1.3 = 32.50 an hour

    32.5 x 135 hours = 4390 in gross payroll expenses

    Skidsteer costs $350 a month, plus at least $200 a month in maint. and fuel (averaged over 12 months)

    $550 a month x 12 months = $6600 annual skid steer costs

    Insurance (liability and skid steer) 2000 per year

    Gross expenses 12990

    16875 - 12990 = 3885 gross profit for a winter that is over 50% above normal

    We have not even brought up buying a trailer, a fuel tank for transporting fuel (You are going to want to buy non taxed diesel) other overheads like time spent hiring, payroll or your time spent on maintenance)

    For a normal winter you would lose money

    27 hours for 8" storm? I am certainly new at this, very new matter of fact. But 27 of snow plowing hours to plow 8"? What if you got 16" your clients would be buried for days...

    Again, I am not trying to start an argument, but just trying to bring some other directions to your thoughts. You might be much better suited to pay for the plow, springs, and timbrens that you put on your truck...Insted of incurring debt of 20k, skid steer, 2.5k trailer, $350 fuel tank, and your still are claiming only "personal use" of your auto insurance??
    Last edited: Dec 8, 2002
  7. chtucker

    chtucker Senior Member
    Messages: 618

    General Grounds...a few points and questions:

    You already have general liability insurance (Brians if I recall doesn't)

    You have year round work for the machine

    How many plowable events do you get?

    You are not charging hourly, Brians is. If you figure out your hourly rate $1500 revenue/2.5 hours = $600 an hour (I wish for that)

    You are doing one driveway every 7.5 minutes (150 minutes / 20 drives)? I don't know of ANYONE who is getting $75 dollars for 7.5 minutes of work, not even my patent lawyer. I don't doubt you, I just hope your customers are not watching.

    You certainly are making a large profit, but in this case I don't think Brians will.

    Howard (respectfully)
  8. River Hill

    River Hill Senior Member
    Messages: 102

    I appreciate the input guys. Yes I have purchased general Liability, and I am fully insured. Yes it did take me 27 hours for 8" of snow because I am a sub for a very large company and when you are finished your jobs there is always have more work for you, if you want. There is always cleanup after the initial plow as well and spot salting for days after. You guys are probably correct in saying, it would be hard for me to justify this piece of equipment. I was just thinking and thowing my thoughts out to the experts. Thank you for taking the time to answer my questions. I should probably take my money and pay some bills, instead of looking for more toys.

  9. litle green guy

    litle green guy Senior Member
    Messages: 279

    If you have some work for it the rest of the year it might be worth it, plus a few years from now maybe you'll want to get some of your own contracts and that's where it'll realy be worth the money, especially after it's paid off.

    27 hours plowing is very believible, I was out 23 hrs with 7" this storm and we've had storms that we've worked 60 hrs, there's always work.
  10. River Hill

    River Hill Senior Member
    Messages: 102

    Just to make things clear. I am fully insured now with full commercial auto and General Liability. I was getting different stories from different agents at first, but once I talked with Erie they set me straight.

    I am always looking for ways to make money, so I never know what I will do.
  11. General Grounds

    General Grounds Member
    Messages: 66

    :rolleyes: howard, idont know anyone who has had to put $200 a month in maint. on there skid steer. check fliuds and grease every 10 hours and the manufactuer calls for oil changes every 200 hours. so i think the $200 maint is a little inflated.

    when i purchased the machine it was'nt with snow removal in mind it was souly for my landscape work, using it in the winter is just another productive way to use the machine.

    we usually only get 2-4 events a year.

    i charge my customer per the amount of the event not the minutes i spend at there home. this is clearly spelled out in my contracts for snow removal. i think $75. for a double car garage is fair esp. if we have to be out at all hours of the night. you are right $75 for some may be steep , my customers know that we''ll be there and the job is done right so i think the $ is not an issue.

    if brian is souly purchasing the machine for snow i would say stay away because you can get in trouble in the summer months if you dont have the work, my machine works 3-6 days a week in season, so for us it was the wisest decision we made im fell very good about the decision.

    Last edited: Dec 9, 2002
  12. chtucker

    chtucker Senior Member
    Messages: 618


    $200 includes fuel, unless you have something solar (Just guessing are you able to purchase non-taxed fuel)???

    Also when I figured the 7.5 minutes for a drive I didn't figure the 1 minute to get between drives... 6.5 minutes per drive and you get $75??????? I don't care if it is a 20 x 20 driveway, you can not tell me that takes 6 minutes or even 10 minutes to a good job.

    People with lots of money are smart... Thats how they get lots of money... I applaud you for being profitable, but I could not in any clear conscious charge $75 dollars for 6.5 minutes of work. I understand that you charge per push, but per push rates are figured on how much time you think it will take.

    Out here in the West you would be shot for that..
  13. General Grounds

    General Grounds Member
    Messages: 66

    :rolleyes: sorry to hear your bisbelief, i'll be sure to take before and after pics next snow. i forgot time is money.
  14. General Grounds

    General Grounds Member
    Messages: 66

    ;) anyone that can handle a skid steer can easily handle a 20x60 drive in 6-10 minutes hands down, by the way there are guys who get more than i do and use the same method and are with/in the same time im in.
  15. MGardner

    MGardner Senior Member
    Messages: 106

    I`m in the same boat. Only already OWN the trailer, 22`Gooseneck and a 4000series 42 hp. Ford tracktor with box-blade, 7` double roller pulverizer 6` bush-hog 12" post hole digger with ROP with factory loader,bullet proof 3cylinder gas. But it is awkward and heavy to lug around for jobs( weighs prob. 6 K. In my mind a good skid-steer deisel would expand my landscape maint. business. The old Ford would bring 6.5 K anothe 1100. for used implements so....but it`s PAID for and that`s the delema. Also been snooping around for a heat-house for the tractor and a pusher maybe (snow). A side of me says ditch the old Ford outright, and buy a good skid steer but another side says keep it and buy a 3 point backhoe attach. Hard to decide.Could I still finish grade with a skid steer as well ? Harley power rake is another 5.5 K for the skid steer. Also brush cutting is another service I offer. Just rollin it around.:eek:
  16. BWhite

    BWhite Senior Member
    Messages: 496

    75 dollars per drive for every 6 inches geez i need a whole bunch of those !
  17. Dockboy

    Dockboy Guest
    Messages: 0


    I have 763 Bobcat. Own a masonry business along with plowing and it gets used allot. NEVER have I even come close to spending $200/mo. on fuel and general maintanace. Now maybe once a year on a major service, but thats it. The thing only burns about 1 gal./hr. at WOT:confused:. You would have to put 150 hrs/mo. to spend $200. Like I said, mine sure doesn't sit still and it usually avg. about 400 hrs./yr.

    Sorry, but your wrong! The time you spend plowing is effected most by the length of the storm and number of contracts rather than by the depth of the snow. It doesn't take but a fraction longer to push 4" than it does 2".

    I am NOT new at this! Have been plowing for years, consider myself pretty proficient with a plow, and have an excellent reputaion for quality work. We got 9" and I plowed for 30 hrs! Not one customer was left undone or complained. But I also took on some "flag-down" customers which made for some additional time. My basic "route" takes approx. 5 hrs. per push. On a 16" storm, if I took on no "cash" customers, I could probably do it in almost the same amount of time.

    Just mt $.02

  18. chtucker

    chtucker Senior Member
    Messages: 618

    Ok I won't nitpick about the $200 I guestimated at fuel and maintance and the time it takes to do that (Paying an employee to do maintainence, tires and such. I did not even take into consideration depreciation and fun accounting stuff)

    I just trying to run some numbers for Brian illustrating the costs involved in purchasing a skid steer.

    However, I as customer of services would be and a provider of one really question someone no matter what it is charging $75 for 7.5 minutes.

    From my reading on this board we all shoot for 100-125 hr, with the hopes that we get more money based on seasonals and it doesn't snow, or being effiecient with equipment.

    $600 hour???? I think that is a diservice to our professionalism and that is just my opinion. I don't know of any service that gets that kind of rates. I certainly would not pay it.

    $150 for one event to have my 2 car driveway plowed. I am guessing that those people were not watching. Yes I have owned my own loader for over 3 years, and you have to be zipping around to do that to do anything in that short a period of time

    If my customers saw me do that number of driveways in that short period of time they would all own their own and be plowing like mad men.

    Again this is just my opinion and my own stupid one at that. As a customer I could care less what my driveways is plowed with as long as it is done well and promptly. Someone willing to fork out $75 dollars for that amount of work must be really afraid of the white stuff. It must be like the plague there.

    I wish I live were you live, I could become a millonaire REAL QUICK. I bet plumbers and electricians are pretty wealthy too.

  19. chtucker

    chtucker Senior Member
    Messages: 618

    I should add that I really don't doubt you. General grounds you have never stated where you are from. I guess that would help me gain some insite into your perspective. I just think that with those kind of prices that their would some market pressure to lower prices. Heck and I say this jokingly, you could probably 4-5 snow shovelers to do those 20 driveways and not have any of the expense of skid steer:D .

    It is hard for me to understand that you have a skid steer on site (customers house) for a season with 3-4 events. What is you total yearly snow fall? What are your rates for your skid steer for grounds work?

    Again, I don't doubt you at all. I grew up in Fairfield County Connecticut, probably one of the wealthiest counties in the country (could not afford it now!!). People no matter what they are buying want value. Maybe I could afford to live back in Connecticut if I was getting those rates.

    You can hire a backhoe here in town for $60 an hour and you can rent a skid steer for 2hrs for $75. I stated this in another post... if only I could get those rates, or even half that I would be sitting pretty.

    I a not trying to be a thorn, just more curious than anything. But then again curiousity killed the what? I have learned ALOT from this site. I am convinced that it allowed me to average my lofty $80-100 an hour. 75 per push for a 20x60. I only get $75 per month on my seasonal 20x20s, of which I only have three because me prices were too "high" We average 4-10 pushes per month for 8 months..

  20. General Grounds

    General Grounds Member
    Messages: 66

    ;) howard i guess i should have mentioned that the 20 drives are located in a develpoment where the homes where originally purchased in the mid 500's 5 years ago, and believe me since ive had the CAT have not one problem w/ home owners complaining about time nor cost, i had more problems when we used regular plows. sorry thats hard to believe but we also get $60- 80 for lawn maint. in the same neighborhood, 3/4 acre lots, T