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State of the Industry 2009

Discussion in 'Commercial Snow Removal' started by shovelracer, Dec 7, 2009.

  1. shovelracer

    shovelracer Senior Member
    Messages: 525

    What is going on this year? We had our first real storm the other day and I was amazed at what I saw. For starters I saw the kind of results that most of my clients would have a fit over. Missed areas, ice buildup, etc. Second in the past it wasn't uncommon to see a few unmarked trucks, but most places where serviced by legit companies. The other day I saw about 20-25 plow rigs on my route. I only saw 2 marked rigs out of those. The rest where split between beaters and new rigs with new blades. Lastly it also isn't uncommon to see a few funny trails in the snow leaving an account, but this year I lost a few "loyal" clients to someone that is charging half of what I'm charging, so much so that they are willing to pay a contract penalty to take a chance. Having a look around on craigslist I see lots of services offered, but average price ranges are somewhat reasonable enough to not have a complete fit over. I know lots of areas have been inundated with funny snow trails for years, but our area has held pretty good up until this year. It looks like this year might be a little different.

    Now you read the mags that say increase customer contact, hold your prices, and look for other market opportunities. You know the type that showcase a company that went from mom and pop to 8 figures overnight. They say things are tough but are going to be fine. So I ask what is going on? The news says that the economy is coming around, but I still see lots of unemployed people and few jobs available. I see an inundation of new guys undervaluing their time and showing their lack of experience. I see that my costs are up yet again and my employees always want more. The low end accounts have gone searching for the cheapest way out, the mid range ones are pretending like it isn't going to snow this year, and the high end service account services are actually up. I look at my client list and I see that middle class people are holding onto their money like it is actually worth something these days, and I see that the higher end ones are even less afraid to spend it than any time in the last few years.

    So where is the industry going, are we starting the circle over again? Old guys get out and the new guys come in. Prices drop to what they were 5-10 years ago and won't raise back up overnight? Quality is going out the window and more people are willing to just do it themselves? What is going on?
  2. briggsguy17

    briggsguy17 Member
    from NW PA
    Messages: 39

    It's the economy. Guys are out of work, for lengthy periods. Unemployment is running out and they see this as an "easy" way to make ends meet. Have you noticed an increase in the number of building and remodeling contractors in your area?? I have. When the economy recovers :laughing: these guys will slink back into the shadows and those that don't will realize that they are way too cheap. I managed a Power Equipment dealership for 10 yrs. and when the economy tanked we heard horror stories from our customers about "this guy" that fixed their equipment in his shed, he was cheap and had been laid off...........etc. We also got a lot of basket cases where the unit would come in in a box or with pieces in a basket. The customers will soon see that they are not getting the bang for their buck that they expected and they will be calling you.
  3. diesellandscape

    diesellandscape Member
    Messages: 79

    I agree, Its the economy. To a good bit of people $65 for 30 mins of sitting in your truck looks amazing, so they will underbid you you. This happens all of the time with mowing in my area. about 2 or 3 months into it, they never realized they have the $350/month truck payment, $150 vehicle insurance, $100 business insurance, gas, repairs, materials, etc. So they usually disappear. Every one's looking to save money, seems like the rich in my area think I'm a flea market and we can haggle my prices, and the middle class just need that little sales pitch on the work and you can do that "little extra for free" that's already included in your price. You can always get more work. When you stop to get gas in Feb & march, go ask for the manger and put a bid in. Same with mcdonalds and any restaurants, they them why they should go with you, and sometimes that works.

    you should be getting some snow tomorrow so enjoy
  4. supercuts

    supercuts Senior Member
    Messages: 114

    im lucky that im in a wealthy area. i have certainly seen payments slow down this year, but most are honest, tell me they are in a pinch, and i work with them. if i dump every customer that was late on a bill id be out of business. we do 95% residential and my prices have stayed the same or gone up a few dollars. my favorite are the people squaking over teh $1.00 increase.

    i have certainly notice the "craigs list special" only $20, call me. my min is $35 plus tax. most are in the $40 range. we can wipe out 100 in 6-8hrs with 2 trucks. i want to make the jump to more commerical, but its hard to leave what has worked so well, worry about new eqiupment (since we dont sand). and comparing numbers with friends who do commerical, im making more per plowable storm, they only beat me when it melts and freezes and they get to sand.
  5. csl

    csl Junior Member
    Messages: 28

    yeah, i was gonna post a thread similar to this. we are getting destroyed on pricing this year, but not by one man shows. we have one or two major companies here this year that sub out most of their work, and are bidding out property at $55-60 ah hour to plow. I have had calls from management companies that have used these plow crews, complained about not being plowed at all, and then signing them up again this year because they were so cheap. i thought this year would be different and these guys would be gone by now, but they arent. i dont get it. i have been plowing for 6 years and have never gone below $90 an hour per truck. i dont want to lose my customer base, but i cant compete with $55 an hour.

    what have you guys found to be the best way to get customers this year???
  6. Deco

    Deco Senior Member
    Messages: 453

    a blizzard will straighten out most of this bullcrap . :nod:

    all businesses are affected the same way .
    that new president we have dont seem to have that grin he had in jan thru april .
    change my ace.

    hold your ground . if you didn't get , you never had it
  7. shovelracer

    shovelracer Senior Member
    Messages: 525

    See I had a few that saw $5-10 increases and they were more than happy to sign. I lost 1 client of 6 years to $2 because in her words it is "obsurd and unethical to ask for more money this year" Somehow I find it hard to believe that $2 or about $24/year is going to break them. Instead I think an ex client of mine in the neighborhood had something to do with it. He was all bent out of shape cause I wouldn't renew his contract. I had good reason too.
  8. supercuts

    supercuts Senior Member
    Messages: 114

    agreed, i simply let them go.
  9. shovelracer

    shovelracer Senior Member
    Messages: 525

    I've seen it all now. The $2 loss client was plowed out this morning, but pretty sloppy. Best part is the guy ripped up the lawn real bad despite the markers every 5 feet the client had placed. I suspect he took a couple irrigation heads with him as well. All in all he caused more damage in his first push than I caused in 6 years combined at that account. Looks like he's paying them for his time for the next year or two.

    I also saw a guy plowing that was dressed in a business suit.
  10. csl

    csl Junior Member
    Messages: 28

    ok... i need to vent a little. just stopped by the office of a comapny, we will call them (AX) we do a lot of plowing for, and have been for the past six years. so we had a terrible winter last year, (good for us) and set every snow record in 100 years. so last year we ended up bailing out a lot of other contracts because we take care of our equipment, and i personally worked 78 straight hours to keep this company(AX) happy. so earlier this year i get a call saying we lost 6 contracts that are on MY route. when i questioned this, the company(AX) said the properties we do had changed companies, and that they no longer need us. so i go into the office this morning (AX) and see invoices on someones desk for the contracts i used to plow, that (AX) told me we had lost. WHAT THE HELL DO I DO NOW. we have bent over backwards these last 6 years, never increased our price to them, and have done everything asked. i am some PI$$ED right now. i have a good mind to not show up at any other contracts they gave us ( i wont), but i am thinking it.
  11. jb3nh

    jb3nh Member
    from eastern
    Messages: 36

    Hey, maybe if we somehow unionize we to can get a bailout