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Think I have finally figured it out-please read n

Discussion in 'Commercial Snow Removal' started by NPMinc, Dec 15, 2010.

  1. I think I may have figured out why some of us on here have been called things like "arrogant" "unwilling to help" etc. and thought maybe if I explain a few things it may help.

    Seems like there are 2 major groups of people on here

    Group number 1 is those of us, like myself, to whom snow removal is a very important part of and needed supplement to our existing businesses or treated as a business of its own. These are businesses that we have put a great deal of our lives, money, time and effort into. In my case it is a full time year round landscape and property maintenance company which has myself and 5 full time year round employees as well as up to 20 seasonal employees for the mowing/snow removal work as well as a large fleet of equipment. We have also and continue to invest alot of hard earned money into our equipment. Im talking $100k+ not $10k for a used truck and plow rig. That being said we treat this as a professional business and expect to be compensated and treated as professionals for the service we provide. A majority of our profits are put back into the company as working capital to cover overhead and to grow our business through upgrading and acquiring new equipment to make our operations more efficient. Many of us are also greatly impacted by the current economic climate, especially the number of plow operations that have seemed to pop up recently, many of whom have no idea what they are getting into and are "lowballing" our jobs away. Therefore our existing income is vital to us so we may be a little guarded and not so open about specifics of how we bid a job, etc or any of the "trade secrets" we have learned over the years, or may seem kind of offended or upset when someone asks us to use our hard gained knowledge to tell them a specific amount to bid without them putting in the necesary work-basically doing their work for them, etc. If that seems rude or offensive to you I apologize.

    Group number two is those to whom snow removal is for lack of a better term, a way to put some extra cash in their pockets. They do it in addition to and seperatly from their regular income, and do not have nearly as much invested in the business nor as much to lose as the first group does,nor do they have the same overhead costs. Therefore they are not nearly as concerned with getting the maximum return on investment, profits etc. As I said, to many its just extra cash.

    There is nothing wrong with one group or another and neither deserves to be treated differently. I know there are others who dont fully fit into either category or are just starting out. I just wanted to point some of these differences out hoping maybe it will help people understand where the other person is coming from with a response, comment etc.
  2. Advantage

    Advantage Senior Member
    Messages: 766

    Very well said.
  3. second income

    second income Member
    Messages: 82

    As my screen name says-Second Income- thats how snow removal fits into our business model. We are small, we play by the rules, we have insurance and are willing to answer questions and provide advice on forums like this. Figuring out what to charge isn't that tough and I can't think of any formula that any reasonably intelligent business owner can't apply to snow removal. Let's face it we will charge what the traffic will bear in any particular geographic area. Thats just smart business and it doesn't matter how big or small you are. Spending a $100,000 on equipment doesn't mean anything besides you have a much bigger nut to crack , maybe you should pull some of that cash out and invest it!
  4. Chineau

    Chineau Senior Member
    Messages: 447

    Some wheer in that grouping exsists the people who have got their hands on some snow gear and have a hobby, they have not figured out though that their new hobby is costing them money and then offer lowball pricing they are around for a season or two and then gone.
  5. timtpa

    timtpa Member
    Messages: 56

    Excellent post! Very well thought out! Extra Incomes idea about pulling out $ and investing it was probably best left unsaid, but it does show that there is more than one way to crack a nut!
  6. JohnnyRoyale

    JohnnyRoyale 2000 Club Member
    Messages: 2,935

    Great advice!
  7. yamahatim

    yamahatim Senior Member
    Messages: 165

    Good analagy with one exception. I am in your "group 2". I have plowed at various auto dealerships I worked at for over 15 years. I have a daughter in a wheelchair that gets picked up by the "short bus" directly in our driveway. After a few azz chewings from the bus company, I had to buy a plow. I couldn't keep up with my snowblower for my large driveway. I needed to find a way to pay for my plow, so I took on a couple of accounts. Well word got out on the anal quality of work I did for my customers, I started to get calls. I was not the cheapest, but I was recommended by my customers and I take pride in my work...plus I just happened to have all the right equipment. To say someone "does not have nearly as much invested in the business nor as much to lose as the first group does, nor do they have the same overhead costs." is not always true. I only take on the number of accounts I can handle, yet I still have the same overhead costs in relation to my size of operation, and I am looking for maximum return on my investment. Plus, the plow, a new snowblower, salt, gas, insurance, my overtime away from my family because I have a day job...those are big investments to me. Extra cash, yes, but choosing to work and pay for a family of 5 and support mentally and physically challenged child rather than let others pay...well that is what motivates me everyday. Granted, group 2'ers like me do not have to pay unemployment insurance, payroll taxes, etc. but there are definately costs.

    When you said "There is nothing wrong with one group or another and neither deserves to be treated differently." That hits the nail right on the head!
  8. CM's

    CM's Junior Member
    from Midwest
    Messages: 17

    You're right on the money. There is a major disconnect between the two groups as you call them. I had no idea there were so many "hobbyist" out there until I started looking at this site. This is the main reason I try not to comment very often, or share pictures of my equipment. I do enjoy this site though, and have picked up a few things from some of the members.
  9. yamahatim I would not necessarily group you into group 2. You seem to have a grasp on what you need to cover your costs and make a profit. That would seem to me like you are running your operation as a business more than just to put some cash in your pocket. As I stated in my OP there are some who do not fit in either group completely. What started this whole post idea in my head and got me noticing the different "types" on here was when I was told I was "complaining and not wanting to help" someone in a thread where they were asking for specific bid numbers for a specific property----not help with how to come up with their own bid, but specific numbers. As I have said in other posts, hows that old saying go about giving a man a fish vs teaching him to fish?
  10. yamahatim

    yamahatim Senior Member
    Messages: 165

    Right on. I should have read it slower. Could you type slower next time so I understand? :D

    I know what you mean, I see those posts and I just shake my head. How do these guys answer the question on a job application-Required wage? Do they not know what they are worth?
  11. Plowtoy

    Plowtoy Senior Member
    Messages: 929

    I would say I fit into group 2.
    I started out snow plowing many years ago as a hobby and fromed my business over the years.
    several years ago I had a friend that had is own lawncare/snowplow business that couldnt make it and had to give up all of his equipment just before the snow started to fly. He asked me if i would like his accounts. I took them on and weeded out the pita customers and kept the good ones. To this day I maintain an account that his Mom works for and she makes the decisions on who plows it, and we won it back this year (even after hearing her son bid on it again). I will tell you that my business is getting smaller partly because I want to and partly because of being under bid.
    I do have costs to cover even though i dont drive new equipment or have an office outside my house.
    I think that being a "true" small business is good for those larger business', as we may keep them on their toes.
    I choose to run a debt free business and dont think that i should be penelized for that. Imagane if more business' would do this, how much more profitable they would be.
    NO EQUIPMENT PAYMENT=MORE MONEY IN YOUR POCKET, It can be done, even with big ticket items like loaders. You just have to pay attention
  12. swtiih

    swtiih PlowSite.com Addict
    Messages: 1,179

    Makes very good sense
  13. CM's

    CM's Junior Member
    from Midwest
    Messages: 17

    Not owing on equip doesn't make you more profitable, it just makes you more secure. A smart company is always recovering the same amount on equip whether they own it out right, or have a 100% loan on it. The reason you recover equipment charges on it, is so you can buy another one when this one wears out. I recover the same equip rate on the machines I own, as on the ones I don't own out right yet.
  14. Plowtoy

    Plowtoy Senior Member
    Messages: 929

    Are you sure? Most loans have interest.
    Also 100% of reposessions have money borrowed against them, There for its my opinion that it is more profitable to be debt free
  15. slongfellowii

    slongfellowii Senior Member
    Messages: 157

    I think I may have figured out why some of us on here have been called things like "arrogant" "unwilling to help" etc. and thought maybe if I explain a few things it may help.

    Obviously people have been calling you out because you have been on here a less than two month and think that any question you don't think is worth answering shouldn't be on this site without your approval. If you dont't want to help people with pricing, don't. With that said, I wouldn't give anyone a price either, but usually how long I think it might take with the equipment they have.
  16. Turf Commando

    Turf Commando Senior Member
    Messages: 567

    Myself, obtained a commercial lot for mowing, then asked if I could plow later that year, never plowed a day in my life up until then... three years later obtained more work adding more every season..!
    I won't share to much about my business practices pricing etc..there's some things that need to be left to the imagination...
    To this day everything is paid for and loving it, I refuse to get involved in payments on trucks, plows etc..
    Nobody cares if you plow their drive with a new or used truck, only thing that matters to most is being reliable...
  17. No slongfellow, I was called arrogant and unwilling to help because I told a guy he needed to figure out his own overhead and profit sought etc to make his OWN estimate and put in his own work, and tried to explain that we couldnt give him an accurate price anyway due to many factors we could not know. If you read my OP I was trying to explain why some of us may come off as being arrogant etc, without trying to be. And yes I will say that telling someone exactly what to bid on a specific job isnt a question worth answering, but if someone would ask for help on how to calculate their overhead etc, so they could make their OWN estimate i would be more than willing to help.