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Where did we go wrong?

Discussion in 'Commercial Snow Removal' started by Brian Young, Nov 28, 2009.

  1. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    I was at a buddy's house Friday night as we were adjusting my salt spreader after a few mods. We got talking about "the old days" of plowing. We were talking about sub pay rates, customer's willing to pay for a clean lot vs. now where they only want bare minimums but want the same results. I wasn't there very long but before I left he pulled out an old pay sheet from a guy who he subbed from BACK IN THE LATE 1990's...his pay rate was $85.00 per hour!!!!!!!! I know some of you guys are getting that now but our area has suffered tremendously over the years to the point where a guy with a 1 ton dump, 9ft v blade is getting $35 to maybe $40.00 per hour. Meanwhile the price for everything has doubled or tripled since then.
    Fuel prices back then were around $1.00 to $1.20ish, a new plow back then was probably around $2500.00 installed, even the price for a heavy duty truck back then was around high teens. What intelligent person in their right mind would even get into a business where everything goes up in price and our prices decrease EVERY YEAR. Hopefully this isn't true for everyone but it seems to be a sure sign.
  2. Deco

    Deco Senior Member
    Messages: 453

    BY , everything goes up but the pay . i remembert well.i started in '80 so it seems worse.:laughing:
  3. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    That's the problem ,to many "we's" in the business now.
  4. Mackman

    Mackman PlowSite.com Addict
    from S.E. PA
    Messages: 1,356

    You think thats bad. Dont even get me started on the trucking business:realmad:
  5. Premier

    Premier Senior Member
    Messages: 274

    It is very disturbing isnt it. What can you do even more so now that the economy sucks. everybody that has a mower is now a landscaper, a plow is now a plower, a few tools a home repair guy. forget about us that have been doing it for years. :gunsfiring::gunsfiring:
  6. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    I know the next customer that says "my other guy" stopped doing it is going to get a does of reality. Then Im going to explain to them (even if it takes me an hour) why my prices are double, if not triple the "other guy's" price. Then I can go home, count the wasted breaths I took in doing so,lol.
  7. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    A schoolyard I plow went for 50% more five years ago than it does now.
  8. Premier

    Premier Senior Member
    Messages: 274

    I dont know if this is a sign of good things to come, but on all of my new contracts this year that i did manage to seal the deal on i was the highest bidder, I still feel i am low at what im charging, but I worked the service angle, hopefully it will pay out in the long run with more work, down side is im still down about 10 to 15 commercials and a ton of resi's got a direct mailer comming out starting on monday hopefully it will drum something up still not snowing here so i think things may work out some how im hopeing.. payup
  9. Deco

    Deco Senior Member
    Messages: 453

    remember when bulk was $22 ton ?
  10. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    GV is right, there are WAY too many we's now. There was a time where more people made their living providing their core services and didn't plow snow. But business owners see oppurtunity and expand. The trend to secure year round business by providing plowing while lawns are snow covered is I think in part due to increased competition. As to prices suffering and going backwards, it's the same thing, there are too many mouths to feed. As much as there is more commercial plowing now than there was 10 years ago there are many more mouths to feed doing it. Thus to keep getting work people work cheaper with the idea that it's better(or absolutely necessary) to work cheap than not at all(see the cash mill idea). Nevermind the all the people who are expieriencing false growth and not realizing it. Business ins't supposed to come down to being a cash mill and relying 100 percent on cash flow, I see all the time. I call them flash in the pan businesses, around for 3-5 years, have all the latest and greatest tools/trucks/whatever, don't know business or finance well enough, get way over extended on credit and then they're gone, but in the struggle to survive poor management they work for peanuts and drag down local prices to the point where those who are stable suffer for their mistakes. Recessions are supposed to be good in the long run for stable businesses, can't say I'm convinced but I do know that I hear about people who aren't plowing this year or who are selling off their equipment ALOT more now, just look at craigslist, than a couple years ago, seems like it gets what I'll call the midsized landscapers first, guy with 1-3 trucks. The mower in a PU and the bigger players seem to stick it out, the mower in PU guys have virtually no overhead and therefore can survive on less income and the bigger companies didn't get big by poor management or bad finances.
    Last edited: Nov 28, 2009
  11. Deco

    Deco Senior Member
    Messages: 453

    a nice crippling storm should straighten out the rates . :nod:
  12. breadoflife

    breadoflife Member
    Messages: 85

    PLEASE GOD SEND ONE thats like 18" lol. Yea, we are in the mower in pickup stage, but some day will expand. The biggest thing is knowing your limits. Right now we only have one confirmed lot, a seasonal contract, so we have to work within our limits, we are only getting $155 a push up to 6" so at that rate, figgure 2-3 pushes in that time and that only works out to 310-465 dollars which after fuel, which ive estimated at $2.90 a gallon and 3 GPH, and if we go there three times we are talkin $45+ in fuel alone, not to mention the fuel to get there and back. So, we arent buyin everything we want, such as plow stakes, rubber edge, plow shoes, plow wings(though we will soon), etc.
  13. Flake Chaser

    Flake Chaser Member
    from CT
    Messages: 66

    You forgot everyone with a pick-up and a chainsaw is a tree expert :dizzy:
  14. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276


    There's nothing wrong with that! The mower and Pu stage is where lots of guys start. Its where you go in the future that will determine your success or failure. Provide good work at a good price(for you) and don't overextend yourself. You'll be fine. Maybe not rich, but fine. Just know when to say NO.
  15. dchr

    dchr Senior Member
    Messages: 159

    Couldn't agree more-I called a bunch of tree guy's that I saw in the yellow pages to get an estimate on taking down a couple of trees on my property and couldn't believe the equipment or lack there of to go along with no verifiable insurance or references. After talking to a couple of these guy's I felt more comfortable doing it myself until I finally found a repuatable company. It's the same thing in my main warm weather business(remodeling)--any guy with a hammer and a "work truck" is now a home improvement expert.
  16. LoneCowboy

    LoneCowboy PlowSite.com Addict
    Messages: 1,760

    A big storm doesn't drive out the other guy, it brings more in.
    a dead dry awful winter drives all the other less well capitalized guys out of business.

    "man, there's no money in this....................., why bother?"

    then you'll see who is the pro or not.
  17. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Good thought. If your in for the long haul you'll see the ups and downs.

    In fact are there 2 new members on here that are all ready in trouble because it's not snowing and they owe money?
  18. big acres

    big acres Senior Member
    Messages: 653

    Lonecowboy - I agree. One thing a big storm also does is expose bigger companies that are poorly managed or undercapitalized from an equipment standpoint... creating opps for other vendors, but as you said, the call goes out for more guys to hang a plow anf become a sub.
  19. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    In our market I can honestly see a bit. a tiny bit of why we charge a lower rate. We average 100-120 inches a year, so the guys who only see maybe 50" or so have to charge a bit more. But its the larger and medium sized companies doing stuff for nothing around here. They all probably have the huge overheads so they need to pay bills so they lower their rates just to ensure they get or keep the property's. But some of these guys, I don't think they think before they buy! There is one company in particular who landed a big account last season, next thing you know, you see them in all brand new F350's and 450's then they lost that contract. I heard this company is now doing lawns for around 15 bucks...wtf! In a nut shell I think it all came down to greed!
  20. green frog

    green frog Senior Member
    Messages: 246

    Lone wolf is right no snow low ballers are gone. But that 18" storm sounds like fun.