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Trying ot convince apartment complex to sign a multi year contract, help me out here.

Discussion in 'Commercial Snow Removal' started by trqjnky, Dec 6, 2011.

  1. trqjnky

    trqjnky Senior Member
    Messages: 620

    Alright, Im tired of wondering every year if im going to get my work back from last year. so im trying to get people to sign up for a 3-5 year contract, that way i know the new equipment i buy will have a property to be used on.

    what are some points i should mention to prove to them that it would benefit them to sign a contract.

    some i have now

    -it will lock you into the current pricing with no increases for the first 3 years, after 3 years if sand/salt/fuel for instance has gone up in price to need a price change, that would be discussed then and agreed upon a price increase that would make both parties happy.

    -You know who's going to be there and we already know how to get the job done, no new learning curve with a new contractor, we know where all the landscaping is, retaining walls, etc so your risk of property damage is much lower than with a new contractor.
  2. hoskm01

    hoskm01 Senior Member
    from AZ
    Messages: 475

    Assuming your (or their) contract has you fixing landscaping, walls etc upon any damage, that adds no value, which is what they are looking for.

    If you are going to agree to a price-lock, there are no negotiations if fuel and salt go up for next year. If you have room to negotiate, then what is keeping you from walking next year if they wont give you an increase? What is their recourse if you don't perform well? Doubtful that they would enter in to anything that didn't leave them a thirty day cancellation clause.

    Don't ask for a commitment, give them no reason to change and go elsewhere next year.
  3. trqjnky

    trqjnky Senior Member
    Messages: 620

    for the property manager, yea that works. but for the dolt heads in regional office, they dont see what goes on nor do they care. they like the bottom line.

    Messages: 43

    Never heard of a five year deal. If you are doing quality work why are you worried about them getting rid of you. I feel like you telling them to sign a 5 year deal with you, you don't sound to confident in yourself. Just my two cents. All I do is commercial and I would never put myself out thee like that.
  5. nepatsfan

    nepatsfan Senior Member
    Messages: 727

    I would say that the only way to get them to do it if they are fighting you about doing it is by offering a discount. Tell them if they sign for 3 years you will give them 3-5% off the contract. The other thing you could do is backload the discount to the final year. It may be worth this kind of discount to have the piece of mind in knowing you will keep the account. Obviously that is last resort to offer it.
  6. nepatsfan

    nepatsfan Senior Member
    Messages: 727

    Most of our accounts I feel like they would keep us and not look for lower prices just because of a rapport we build with the clients but there are a few that I feel would drop us for nothing more than a lower price. Its just the way it is, the smaller commercial operations will hang on to you, the larger corporations half the time the people we deal with are not even in the state.....I dont think they give a sh8t about us.
  7. Matson Snow

    Matson Snow PlowSite.com Addict
    Messages: 1,985

    I think The OP is Just tired of the Unknown....This Market nowadays is Drvin By price...Service is a Distant second....So..Billbob Toothless Landscape comes in Next year and cuts his price by a third....Who is the account gonna go with...Billybob...

    I give the OP credit for trying to think outside the Box

    Property Managers Love to Know what they will pay 3-5 years out...Its a Good idea, But be careful...Fuel or salt prices spike again you will be left holding the bag....
  8. trqjnky

    trqjnky Senior Member
    Messages: 620

    yea, but even if fuel goes to 5 dollars a gallon and salt is 10 dollars per bag i would still profit. think of it, one 2 dollars per gallon of diesel, thats an extra say, 25 dollars per storm. not that big of a deal. i use about a half tank of diesel plowing the apartments including drive time. maybe not even that much, so fuel isnt too big of a deal. salt, sand mixture i spread has room for more expensive salt to still make a decent profit. So im not worried about something pricing me out, fuel and salt are the only variables. and they cant change price that much. if something happened to where fuel was 10 dollars a gallon and salt 50 dollars a bag, there would be something bigger in our world to worry about.

    i think a 3 year contract is ideal. 5 years is too far out the more i think about it. maybe ill be rich and wanting to retire by then... ha!!!!
  9. hoskm01

    hoskm01 Senior Member
    from AZ
    Messages: 475

    You've got it all figured out. Go sign that three year contract.
  10. trqjnky

    trqjnky Senior Member
    Messages: 620

    Are you being sarcastic and why?
  11. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    Ignore them.

    Three year deals are the only way to fly. I was very successful negotiating three year deals with a school district for three lots, and a couple of apartment buildings. Explain to them your rationale. It benefits you, because you can make a commitment for better equipment, another truck, etc. It benefits them because they can truly budget ahead for actual costs, which will be more consistent year to year. Around here, if it's a heavy season this year, prices go up next year. Light season, they hold flat or some hotshot thinks he can underbid you. But you need to make it worth their while. If you know you have the job for three years, you can take some money off. Let's say this years' bid is $5k. Make that your third year price. Year one and year two will be slightly less. Say a 3%-5% increase, till year three is where you need to be.

    Spell it out right on your bid sheet.

    One year deal:
    Year One $5,000

    Three year deal:
    Year One $4,600
    Year Two $4,800
    Year Three $5,000
  12. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,275

    Agreed with the 3 year contract. I have projects that range from a hand shake, 1 year 12 page contracts and then the standard 3 year. The reality of it, I've lost very few accounts over the years.
    If you provide excellent service (as someone else mentioned, if you have no extra/added value over the next company, you are not all that much better. Then they shop around,) so find something that makes them not ever what to leave you! (sounds like relationship advice)
    For use, that would be snowblowers for condo's and wheel loaders on smaller commercial lots. Because No One else in my area runs blowers, I have something better. On commercial lots, instead of having blizzard clauses and whining about the heavy wet snow, we pull up with bigger loaders and just do the job. These are examples of offering something different.... With that: one three or five, it won't make a difference if you don't want what each other offers.
  13. hoskm01

    hoskm01 Senior Member
    from AZ
    Messages: 475

    A 1% change to my bottom line is a big deal, much less 3 or 5%. As long as you know your true costs and potential for gain or loss, then you should be good.

    And a multi-year contract is absolutely a good thing and you should pursue it at all costs.
  14. trqjnky

    trqjnky Senior Member
    Messages: 620

    around here we get a whopping 32 inches of snow on average, not enough to invest in blowers and loaders, they are only used on walmarts and other huge lots in this part of the world. but, i have an 11 foot wide blade on my truck when the wings are included and a 10 ft blade on the other truck, so we move a lot of snow really fast. we do a good job, and were always on time. they really dont have a reason to shop around, except the guys at the corporate level that dont see anything being done, just invoices always try to find a cheaper route to go.
  15. trqjnky

    trqjnky Senior Member
    Messages: 620

    a 1 percent change is a big deal? lets say you make 20 grand in a winter. 1 percent is 2 thousand dollars. now, all alone, 2 grand is a chunk of money. but in business, 2 grand is nothing, bids vary that much and more, the grand scheme of things, if i take a 2 thousand dollar decrease in pay over 2 years to know that without a doubt, i will have the work coming in, that is worth the stress of wondering if i will have enough work to make it through winter in itself.

    if you are running that fine of a line where 1 percent income decrease will hurt you, time to look over your costs of doing business. maybe step down equipment or something. All of my equipment is paid for, and i dont buy new equipment untill i can afford it. But thats just me playing armchair quarterback, what works for some doesnt work for others. I realize that. I own an auto repair shop, so i can have 80's chevy trucks that run like new, I can repair them for next to nothing, and I repaint them so they look good and all match, others dont have that convenience.
    Last edited: Dec 7, 2011
  16. northernsweeper

    northernsweeper Senior Member
    Messages: 397

    1% of 20,000 is only 200.00.....10% would be 2,000:drinkup:
  17. trqjnky

    trqjnky Senior Member
    Messages: 620


    WELL, that reiterates my point i guess.
  18. hoskm01

    hoskm01 Senior Member
    from AZ
    Messages: 475

    I'm not saying 1% is the end of the world, but any change is on my radar, positive or negative. It doesn't make it time for me to look at costs, it means that I already do and I know my numbers down to the penny at every line of my GL.

    1% pain is considerable on your 20k or my 2 million; only the scale changes. If you ignore 1% five times, then haven't you ignored a 5% change? Would 5% change your view of what important numbers are?