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Seasonal bids

Discussion in 'Commercial Snow Removal' started by mpgall26, Nov 7, 2011.

  1. mpgall26

    mpgall26 Senior Member
    Messages: 228

    Question for all those who use seasonal bids. I have a condo complex that I know is holding out on signing a seasonal contract until snow is forecasted. I wrote the bid as 5 payments due on the 1st of each month serviced Nov1-Mar1. From their perspective it makes no sense to sign and pay for Nov since there is no snow forcasted anytime soon, but it matters because I know they are going to call when it's forecasted and therfor haven't agrressively persued other contracts since its 5 minutes from home and easy. They have insisted on seasonal. What do you do with this? just wait and prorate the month they finally call? I hate to say no when they call 2 days before a storm, but it sorta defeats the purpose of seasonal planning if I havent already planned and staffed resources for it.
    Thanks in advance for advice.
  2. swtiih

    swtiih PlowSite.com Addict
    Messages: 1,179

    Did you put a time frame on your quote. What is your season begining date.If it is Nov thru March then they will do exactly that figuring they will skip the Nov. payment because they didn't need the service. Call and ask them what they have decided so they can get Nov. payment sent otherwise they will have to send 2 payments come December. Tell them your seasonal price is for the season which is defined as xx - xx
  3. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Well first you both need to agree on price. Then make 4 payments or you can still make 5 payments.

    R.J.S. SNOWPLOW Senior Member
    Messages: 892

    I agree with grand you always can bill them dec - April
  5. nepatsfan

    nepatsfan Senior Member
    Messages: 727

    Tell them the price per season does not change regardless of when they sign the contract. It is based on averages throughout a season. The payments are divided equally, the customer will not be charged more in December or January for lots of snow, nor will they be charged less in other months when there is no snow. You plan for little to no snow in November and April but you are available if it does happen. If they would prefer a per inch contract you can certainly give them a bid for that. Otherwise...when they sign the contract payment arrangements will be changed but the amount stays the same. You are not charging by the month, you are charging by the seaon per their request.

    You may want to rethink working for this place....they sound like a pita.
  6. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,275

    Sometimes seasonal contracts are easier to date starting mid November until mid April.
    While I'd think your contract (however you wrote it) is for the season based on 5 payments, it doesn't always snow in November so I understand their (all be it wrong) thinking with the November payment. My contracts all start mid Nov. So while it may not snow from March 15 through April 15, once you have them in a routine to mail the payment, March can be an easier payment to get than November.
  7. tjlands

    tjlands Senior Member
    Messages: 579

    I could be wrong but I believe you need to sit down with them asap,
    They clearly are trying to take advantage of the wording on your agreement,
    in their favor of course
    and if it doesn't snow till jan , what then?

    Seasonal contract is for all events of 2011-2012 winter season with a pre-determined price.
  8. coyote

    coyote Member
    from montana
    Messages: 39

    Maybe Im stupid but have never understood seasonal contracts. Why would any hoa or commercial lot get themselves into that. Paying for something that might not happen much at all, and how do you bid it. What if it snows every day. Just seems like an invitation to financial disaster.

    R.J.S. SNOWPLOW Senior Member
    Messages: 892

    That's the win or lose one will lose....the customer or the plower

    IMO a seasonal contract is the best way to go they pay if it snows or does not snow, if the customer requested they should understand this....

    You bid it buy the average snow fall per year ask them what is the trigger they want usually is 2 inch add a couple more for drifts and for salting...
    And the date of starting on the contract is the dead line to sign not when it starts to snow.
  10. coyote

    coyote Member
    from montana
    Messages: 39

    I like pay as you go. Seems alot less risky. With my luck i would be the loser especially since my area is suppose to have above avg. snow again this winter.
  11. Landcare - Mont

    Landcare - Mont Senior Member
    Messages: 351

    A seasonal contract is a contract for the season - November 1st through March 31st or April 30th. You divide the contract amount into 4-5-6 payments to make it easier on your customer and to stabilize your cash flow. If they don't sign the contract until it snows, the contract amount is still the same and they can pay the first two payments at once or you can be the hero and bill them in fewer, larger payments.
  12. Red Bull Junkie

    Red Bull Junkie Senior Member
    Messages: 159

    We deal with seasonal contracts all the time, mostly multi-res stuff. They are a very effective hedge against a low accumulation winter if you know your numbers and bid the property appropriately.

    For us, multi-year contracts are the safest bet as far as seasonal, but i'm not afraid to give a new customer a 1 year shot so they can try us out-then we hook em for a multi-year relationship based on our performance. Some like to sign up late, but the seasonal price does not deviate based on that. The only reason they start paying in November is to spread the total cost over a period and improve their cash flow in/out from month to month.

    For the property managers/investment companies, it also provides a way to forecast their future expenses and apply that to their budgets-they like as much control over expenses as possible.

    With that said, a good mix of per service and seasonal contracts has provided us with both stable cash flow, and healthy profits. 50%+ margins on seasonal contracts, even with above average snow. (obviously this will vary w/ company size, local, work site ect........this is just my experience) Good luck everybody, hope you all do well!
  13. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    When dealing with commercial contracts companies like to know how much to budget for the season. They don't want no payment was due in Nov. then get slammed in Dec with a big bill.Same HOA ,they collect the same amount for each driveway is the biggest or smallest.Same thing, they need to have a budget in place to be voted on buy it's members.
  14. djagusch

    djagusch 2000 Club Member
    from mn
    Messages: 2,107

    Consider it selling insurance. You are insuring that their property will be taken care of throughout the season. For the seasonal bid you pad the numbers little above average just to be safe. If you are in the biz for the long term you will come out ahead.

    Customers like it as they have a fixed costs. Most of mine expected price increases since last year was above average. They forgot so quickly the year before we had no snow in March. People remember the bad winters not the easy ones.
  15. mpgall26

    mpgall26 Senior Member
    Messages: 228

    Good info, I agree with the seasonal price is just that. I have no idea how these people can act so ignorant as to not get it and think they are gonna beat the system (that they wanted). The condo complex didn't open yesterday, so it's not their first rodeo. Probably should just say see ya and hope that the first real storm is 2feet so they learn a lesson, but that would not be business gentleman like. May be funny to see their jaw drop when we gladly take the property for the previously quoted rate, now divided by 4 payments rather than the original 5.
  16. Diesel59

    Diesel59 Junior Member
    Messages: 12

    I wrote a similar contract with a start date of Nov1st through March 31st (as per their specs) and put in the contract that the first payment is due Nov 15th. I also wrote in there that contract is only valid for 15 days after date submitted. After that we can refuse to honor or have the right to adjust the price accordingly (ie: you skipped novembers payment now the per month price will go up to reflect)
  17. BC Handyman

    BC Handyman PlowSite.com Addict
    Messages: 1,943

    Don't know what you guys think but I just got a new seasonal contract signed today at end of Dec & I quoted the same price as I would have in sept. even though the season is 1/3 over & we have already had lots of snow. I figure seasonal price is seasonal price. I can't allow a discounted seasonal price because they never called me 3 months ago. I've been full for 2 months already, only reason I aggreed to do this one is because it's a quick resi & it's right next to a existing customer & I already do part of their driveway while I do neighbors. Insted of 5 payments I asked for half of seasonal price with 2 more monthly payments to be billed.
    Last edited: Dec 29, 2012