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seasonal, commercial accounts$$??

Discussion in 'Business Fundamentals' started by Matthew Bowman, Mar 8, 2003.

  1. My first season of large retail properties is almost through and I'm trying to analyze the #'s. These properties are all on a seasonal rate. My question is for those of you who have had more years managing snow plowing on this type of account than myself. After all of your expenses are paid for the year, what % of the contract $$ should be profit? Obviously this is meant to be very general, on an average snowfall season. I would like to know if I'm on the right track, as I don't want to be the area "low baller" and hold back myself and others in the biz.
    Ah yes, and I just recently joined SIMA!
  2. Snoworks

    Snoworks Senior Member
    Messages: 466

    I would say you would like to be over the 40% margin, at the very least!

    Chuck B
  3. Thanks for the reply. After a winter with much more than average snowfall we are looking at about 50% profit margin for plowing on our seasonals. I guess we are about where we need to be. My gut says that our seasonal price is a little low, however the numbers don't lie. Anyone else?
  4. wyldman

    wyldman Member
    Messages: 3,265

    With seasonals it's very difficult to nail down an exact profit margin per year,as the contract prices are generally fixed,but operating costs can fluctuate wildly due to the amount of snow we get,number of plowable events,increasing costs (insurance,wgaes,gas,breakdowns,etc).Factoring in vehicle leases and buyouts throw the figures way off too.

    This years (estimated profit) margins on seasonal contracts will be as low as 9-11%.Last year it was over 35%.10 year average is around 23%.I don't worry about it too much as our snow operations are mostlyjust turning over dollars,keeping guys busy,and paying for equipment.Market prices around here for seasonal snow are quite low.

    Salt,stacking and removal is where the big $$$$ are,as it is all above and beyond the contract price.Margins on those can be well over 50% :D,if equipment holds up,and you buy salt cheap (stockpile).
  5. I'm not sure if I'd be getting up at 2am for those #'s. (no offense Wyldman) This area has lots of blacktop, however there are also many construction, landscape etc. companies who are just trying to turn $$, not really making a very high profit. I only do snow so its hard for me to compete with these guys and maintain what I feel is a high enough profit. These guys don't always do a real good job so that is where I try to move in. My equipment and trucks are all older (but well maintained) allowing a much higher profit than if I had all 30k-40k trucks. The hardest thing for me is getting these large properties. Hopefully it will get easier as my reputation grows. Any suggestions on getting more large properties anyone?
  6. Snoworks

    Snoworks Senior Member
    Messages: 466

    Start marketing now! Put together a good sales brochure, then go after the type of accounts that you want! Set specific goals and go after them, good luck!

    Oh, and if you have not already, Join SIMA! I got hook-ed up with SMG through a Sima Convention, and it turned out to be very crucial to my commercial success this year.

    Chuck B.