# How To Charge



## jpeero (Dec 29, 2020)

Hi

How should I decide what price a customer should pay? Should I go by square feet or is there some other metric to use?

I am usually low balling myself and want to find ways to get people to pay proper


----------



## Hydromaster (Jun 11, 2018)

Figure out what it cost you to do business and then add on for profit


----------



## m_ice (Aug 12, 2012)

Are you talking plowing or salting or both?
Like hydro said...know your cost of doing business and add profit in.


----------



## jpeero (Dec 29, 2020)

m_ice said:


> Are you talking plowing or salting or both?
> Like hydro said...know your cost of doing business and add profit in.


how much profit should I add in?


----------



## m_ice (Aug 12, 2012)

What di you want to make?


----------



## BUFF (Dec 24, 2009)

jpeero said:


> how much profit should I add in?


It depends if you want to eat Ramen Noodles from a Dollar store or Dry Aged Prime Ribeye from a Butcher for supper.......
For sporadic work and challenging weather like snow work 50% is a good target.


----------



## Mr.Markus (Jan 7, 2010)

Start with the ramen noodles, too much rich eating will have you wishing you hadn't partaken of the good stuff so early. Add in some humble pie and win customers everytime.


----------



## Ditta&Sons (Oct 21, 2015)

jpeero said:


> Hi
> 
> How should I decide what price a customer should pay? Should I go by square feet or is there some other metric to use?
> 
> I am usually low balling myself and want to find ways to get people to pay proper


Find out what the going rates are for your area and put yourself either below or above the average, simple as. 
Do you offer a seasonal contract price or per visit price? Residential or commercial? Do you want lots of new business or are you able to be picky?


----------



## Hydromaster (Jun 11, 2018)

Ditta&Sons said:


> Find out what the going rates are for your area and put yourself either below or above the average, simple as.
> Do you offer a seasonal contract price or per visit price? Residential or commercial? Do you want lots of new business or are you able to be picky?


How would you know what rates the other contractors are charging?
Do you look at the pin up Board at the grocery store or laundromat Four pieces of paper with Johnny come lately plowing service, “we will not be underbid, no driveway over $20 “.

I doubt that if you cal a contractor that they will share their numbers or how they got there it’s something every businessman has to figure out for themselves. I don’t understand why this is so difficult?
business takes pencil pushing


----------



## cwren2472 (Aug 15, 2014)

Hydromaster said:


> How would you know what rates the other contractors are charging?
> Do you look at the pin up Board at the grocery store or laundromat Four pieces of paper with Johnny come lately plowing service, “we will not be underbid no driveway over $20 “.


I stuck an old Chic-fil-a napkin below this paper on which I wrote "I'll do it for 5% less than whatever Johnny is charging. Call today!"


----------



## Hydromaster (Jun 11, 2018)

But can you do it faster?


----------



## cwren2472 (Aug 15, 2014)

Hydromaster said:


> But can you do it *cheaper?*


Absolutely!


----------



## Ditta&Sons (Oct 21, 2015)

Hydromaster said:


> How would you know what rates the other contractors are charging?
> Do you look at the pin up Board at the grocery store or laundromat Four pieces of paper with Johnny come lately plowing service, “we will not be underbid, no driveway over $20 “.
> 
> I doubt that if you cal a contractor that they will share their numbers or how they got there it’s something every businessman has to figure out for themselves. I don’t understand why this is so difficult?
> business takes pencil pushing


How would you know?

I assume you know other contractors that you've spoken with about pricing, I know several that i speak to about lawn and snow pricing, you could call random companies up and give them an address and ask for a quote, (many companies do estimates online, its really easy to get a street view on google these days), you could look in the local ads, many contractors put their starting prices in their ads, you could ask people that you know how much they've paid in other years, many new customers are happy to share the price they paid in other years.

I dont understand why this is so difficult? its just research


----------



## Hydromaster (Jun 11, 2018)

Ditta&Sons said:


> How would you know?
> 
> I assume you know other contractors that you've spoken with about pricing, I know several that i speak to about lawn and snow pricing, you could call random companies up and give them an address and ask for a quote, (many companies do estimates online, its really easy to get a street view on google these days), you could look in the local ads, many contractors put their starting prices in their ads, you could ask people that you know how much they've paid in other years, many new customers are happy to share the price they paid in other years.
> 
> I dont understand why this is so difficult? its just research


A newbie isn’t going to have any contacts
Like you…
somebody’s starting price , driveways start at $20 isn’t giving you a proper price structure that’s an advertising ploy.

prices people paid in the last few years have no bearing on the prices that will be charged this season or next season.

Why is it so difficult for somebody who wants to be in business to sit down and figure out what it costs them to run their business,so they know if they’re making money at this.

ps
And who gives their prices out over the phone? somebody is going to call a contractor and say oh I got a 50 x 20 driveway I need plowed how much are you going to charge? I bet you get a ballpark price until he comes and looks at it.

this is an old ploy by competitors to try and get your prices so they can lowball you.


----------



## cwren2472 (Aug 15, 2014)

Hydromaster said:


> Why is it so difficult for somebody who wants to be in business to sit down and figure out what it costs them to run their business,so they know if they’re making money at this.


----------



## Ditta&Sons (Oct 21, 2015)

Hydromaster said:


> A newbie isn’t going to have any contacts
> Like you…
> somebody’s starting price , driveways start at $20 isn’t giving you a proper price structure that’s an advertising ploy.
> 
> ...


I give my prices out over the phone all the time, they call me, i look at the property on google streetview and call them right back with the price, its 2022. do you drive all over the city setting up meetings with potential residential customers? thats a huge waste of time and gas for some of us.
im not sure who does $20 driveways anymore, we only do seasonal contracts, and they start at a certain price point, I can look in the local buy and sell ads online and find out what other companies are charging for a minimum for the season, but by talking to other contractors, youd also be able to find out what other people are charging, most people like to share information, even if its just to brag. 
"50x20 driveway to plow? are there sidewalks or steps to be shoveled? whats the address? ill look it up right now and call you back, our prices start at $xxx.xx for the season and it includes......"
Last years prices have a bearing on what people are charging this year, this year costs more.


----------



## Hydromaster (Jun 11, 2018)

Good for you.
Try this out. if I used your numbers I could go broke or I could be so over priced. 
it would be more advantageous if I knew what I needed and what my numbers were
And why.

if you do your children’s homework for them what did they learn?
And cheating off somebody else’s papers that’s cheating yourself.


----------



## Ditta&Sons (Oct 21, 2015)

alright, so you bought a snow shovel for $20 and youre driving your mothers honda around for $10 in fuel each snowfall, these are your business costs, what now?


----------



## Hydromaster (Jun 11, 2018)

really, that might work for a first grade math problem Or from the guys from South Park
but that certainly won’t work for a business model. Are those really the only costs associated with business? If they are my spread sheets are really full of unnecessary expenditures and income, like profit, cost of labor, insurance . But those things don’t go into it …

I’m selling snow shovels, I have boxes of them, I have no idea what they cost me.
but I called every store in town that sells shovels and They told me what they were charging, so I’m just gonna go with the middle of the road price and cross my fingers, I make a profit.

too bad driveways and parking lots aren’t like shovels.


----------



## cwren2472 (Aug 15, 2014)

Ditta&Sons said:


> alright, so you bought a snow shovel for $20 and youre driving your mothers honda around for $10 in fuel each snowfall, these are your business costs, what now?


Depends. What time did the train leave Phoenix and how fast was it traveling?

Edit: Dang!


----------



## Ditta&Sons (Oct 21, 2015)

Hydromaster said:


> really, that might work for a first grade math problem Or from the guys from South Park
> but that certainly won’t work for a business model. Are those really the only costs associated with business? If they are my spread sheets are really full of unnecessary expenditures and income, like profit, cost of labor, insurance . But those things don’t go into it …
> 
> I’m selling snow shovels, I have boxes of them, I have no idea what they cost me.
> ...


Im not sure why you guys are making it so complicated, regardless of your expenses, a customer isn’t going to be paying much more or much less than the average rate. As I stated before, OP will want to know what the going rates are, for his area and decide for himself, where he wants to be, above or below. I also said it’s very easy to view a property from your phone through google street view. This view would give the driveway and walkway areas and he can easily give a quote over the phone. This is where I close many of my quotes, while the customer is waiting for a day or so for another contractor to view The property and meet the owner (mind you, many owners don’t even live in the houses they want cleared) I have already seen the driveway and got my quote back. If it’s close to what he thinks it should be, I won the job because he doesn’t want to waste his own time and it’s one thing that he can remove from his list of things to do. 
You two are acting like you have never heard of findmylotsize or google earth. I do the same for lawn care, I view the property from my phone or computer and go from there. 
a guy who’s new to the business doesn’t even have many overhead costs so him knowing what his costs are, are basically a moot point, it’s more important to a new guy to know what other companies are getting paid and what type money he can charge.


----------



## Hydromaster (Jun 11, 2018)

K


----------



## SilverPine (Dec 7, 2018)

Call me old fashioned, but I personally go to every site and do a walk through before giving an estimate for maintenance. Google maps are only good for sqft. That being said, we rarely touch residential houses.


----------



## Ditta&Sons (Oct 21, 2015)

This what I see on google maps, if you can’t give a quote based on this type of information…..


----------



## cwren2472 (Aug 15, 2014)

I bid $20


----------



## BUFF (Dec 24, 2009)

cwren2472 said:


> I bid $20


Low Baller


----------



## cwren2472 (Aug 15, 2014)

BUFF said:


> Low Baller


Really? Dang. 'Cuz I'd planned on subbing it out to you for $15.


----------



## cwren2472 (Aug 15, 2014)

Maybe that guy that accused the homeowner of "ripping him off" should have used that Google Earth thing prior to accepting his contract...


----------



## Ditta&Sons (Oct 21, 2015)

cwren2472 said:


> Maybe that guy that accused the homeowner of "ripping him off" should have used that Google Earth thing prior to accepting his contract...


I wanted to tell him that but I thought he got an earful from everyone else. That isn’t google earth, this is just google maps, it comes on your phone


----------



## Hydromaster (Jun 11, 2018)

cwren2472 said:


> I bid $20


go fish.

you could use that pic you could use that to write up an estimate I don’t do per push work so I use that to write up an estimate then meet with the client.

let’s say he can do that for $20
To a guy with a tractor and blower who has 50 other accounts in the area that’s a $10 drive.

Why another guy with the truck and a pick up with all of his time involved to go to your drive and service it might need $35 minimum & no shoveling.
He’s not going to compete with a guy doing them for $10 .why would you do it for $10 because that’s what the contractor with the tractor and blower told him he does drives for, $10 each.

If you’re looking for places to save no money and you don’t know your costs, how could you ever cut costs?
You have to know if your making enough profit to pay yourself that salary.

because if your business is going pay your salary of $40,000 a year and your company doesn’t produce the income to pay your salary let alone all of your other expenses.
You just went bankrupt and if you carried your business into the next year and gave it money for a start up again you have a hobby.


----------



## jonniesmooth (Dec 5, 2008)

cwren2472 said:


> I stuck an old Chic-fil-a napkin below this paper on which I wrote "I'll do it for 5% less than whatever Johnny is charging. Call today!"


And every account is the first on the route.


----------



## Kvston (Nov 30, 2019)

Ditta&Sons said:


> This what I see on google maps, if you can’t give a quote based on this type of information…..
> View attachment 260223


Just for devils advocate: that feature isn’t available in some of the areas we service. Valid point when available.


----------



## Kvston (Nov 30, 2019)

BUFF said:


> Low Baller


⛹️‍♂️


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

Ditta&Sons said:


> a guy who’s new to the business doesn’t even have many overhead costs so him knowing what his costs are, are basically a moot point, it’s more important to a new guy to know what other companies are getting paid and what type money he can charge.


What if what other companies are charging / getting paid doesn't cover his overhead cost?

Companies undercut / operate at a loss all the time to gain market share and then slowly raise prices once they've captured the market share that they want....aka Uber. In retail, there are products called "loss leaders" that are purposely priced lower than cost in order to get customers in the door to spend money on the higher margin products.


----------



## Ditta&Sons (Oct 21, 2015)

Kvston said:


> Just for devils advocate: that feature isn’t available in some of the areas we service. Valid point when available.





Kvston said:


> Just for devils advocate: that feature isn’t available in some of the areas we service. Valid point when available.


fair enough, but that wasn’t argued by anyone who was against the idea.


----------



## Ditta&Sons (Oct 21, 2015)

Fourteen Contracting Inc. said:


> What if what other companies are charging / getting paid doesn't cover his overhead cost?
> 
> Companies undercut / operate at a loss all the time to gain market share and then slowly raise prices once they've captured the market share that they want....aka Uber. In retail, there are products called "loss leaders" that are purposely priced lower than cost in order to get customers in the door to spend money on the higher margin products.


He has an average or baseline to go off of, if he’s new, he wouldn’t have much overhead to cover tho. I found two guys in my area who are way higher than my starting point, I didn’t say you have to copy any contractor in particular, but researching what others are charging is a good way to get an idea of what you can also charge


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

Ditta&Sons said:


> researching what others are charging is a good way to get an idea of what you can also charge


Ok, and once you have that number how do you know if you'll be profitable or not? Seeing as your expenses are a moot point.


----------



## Ditta&Sons (Oct 21, 2015)

Fourteen Contracting Inc. said:


> Ok, and once you have that number how do you know if you'll be profitable or not? Seeing as your expenses are a moot point.


hes guaranteed to make a profit unless his business model is 'lowballer'. if he uses his 'numbers' to make a profit, and his expenses are minimal because hes just starting, hes leaving money on the table, and he will have much lower prices than what he could be charging. you guys seem to omit this important part from your arguments. 
here is the perfect example:
I buy a snow shovel for $20 and go up and down the street knocking on doors, I want to make $60/hour, its takes me 15 minutes to shovel a driveway, so i should charge $15 for each house. but if I had done some research online and found out that other people are shoveling driveways for $40 each, I could make $160 per hour. 


tell him again how he shouldnt care what others are charging in his area


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

Ditta&Sons said:


> hes guaranteed to make a profit unless his business model is 'lowballer'. if he uses his 'numbers' to make a profit, and his expenses are minimal because hes just starting, hes leaving money on the table, and he will have much lower prices than what he could be charging. you guys seem to omit this important part from your arguments.
> here is the perfect example:
> I buy a snow shovel for $20 and go up and down the street knocking on doors, I want to make $60/hour, its takes me 15 minutes to shovel a driveway, so i should charge $15 for each house. but if I had done some research online and found out that other people are shoveling driveways for $40 each, I could make $160 per hour.
> 
> ...


When did I say he shouldn't care what other companies are charging in his area?

So you're making $160/h based on what the market can support.... are you profitable? I'd imagine rent would be pretty high in this affluent area


----------



## m_ice (Aug 12, 2012)

It's good to know what the market will bear however what others charge is irrelevant in my business model.


----------



## Ditta&Sons (Oct 21, 2015)

Fourteen Contracting Inc. said:


> When did I say he shouldn't care what other companies are charging in his area?
> 
> So you're making $160/h based on what the market can support.... are you profitable? I'd imagine rent would be pretty high in this affluent area


others have indicated that competitors pricing isnt anything to research in order to find out what the OP should charge, and i said it was important, its basic market research that every company should do. we see this in every lawn care or snow removal forum on a regular basis, where a new guy asks what to charge, and a bunch of people reply with 'know your numbers'....new guys dont know anything about numbers, some of them dont even have numbers to go by, they need to know what other are charging to be competitive without being the lowballer or being way too high they get laughed out of town. a guy with a low overhead can charge lower rates, but why would anyone in this business tell them to go and do that? it leads to lowballing and the industry has to raise rates, not lower them.
im not going to say what im making per hour but id gladly give a quote over the phone after viewing a residential property in google streetview, i believe thats where this all started. 
rent is pretty high here, a house rents for 2500/month


----------



## Ditta&Sons (Oct 21, 2015)

m_ice said:


> It's good to know what the market will bear however what others charge is irrelevant in my business model.


but youre not new and trying to find out how to price things, you already have your pricing structure and know your numbers.


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

Ditta&Sons said:


> others have indicated that competitors pricing isnt anything to research in order to find out what the OP should charge, and i said it was important, its basic market research that every company should do. we see this in every lawn care or snow removal forum on a regular basis, where a new guy asks what to charge, and a bunch of people reply with 'know your numbers'....new guys dont know anything about numbers, some of them dont even have numbers to go by, they need to know what other are charging to be competitive without being the lowballer or being way too high they get laughed out of town. a guy with a low overhead can charge lower rates, but why would anyone in this business tell them to go and do that? it leads to lowballing and the industry has to raise rates, not lower them.
> im not going to say what im making per hour but id gladly give a quote over the phone after viewing a residential property in google streetview, i believe thats where this all started.
> rent is pretty high here, a house rents for 2500/month


What I can't understand about your arguement is you place so much importance on knowing what your competitor is charging / what the market can support and near zero on knowing your expenses.


----------



## Plowing to the 80's (1 mo ago)

I ALWAYS do a site visit for commercial. After the site visit, I use google maps sat view and measure the square footage of the lot. I dont use a price per square foot necessarily, but I do have many comparables. Most residential we can do using google maps, not practical to do a site visit for 1000 houses. I do go look at one off's

I have learned what other companies in town are charging and I also know their service levels. This doesnt happen overnight and it certainly helped my pricing and sales process.


----------



## Rob80x (6 mo ago)

Seems like guys think you need to buy $100k trucks and put $15k plows on them to do some driveways and then expect people to pay $100 per push for their 2 car drive, just so they can drive their platinum edition trucks 🙄


----------



## Hydromaster (Jun 11, 2018)

No that’s not it at all.

even the guy with a rust bucket and a plow made out of a oil tank should know if he’s 
Business is making money or if he has a hobby.


----------



## Ditta&Sons (Oct 21, 2015)

Fourteen Contracting Inc. said:


> What I can't understand about your arguement is you place so much importance on knowing what your competitor is charging / what the market can support and near zero on knowing your expenses.


did you read the original post? he said he is usually lowballing himself and wants to get people to pay proper. he wants to know how to get to the proper price. the simplest way to do that is find out what other companies are charging. like i said before, i dont know why people are making this so complicated.
i said all he has to do to find that out is to ask a few companies for quotes. he could do that for one of his current properties.


----------



## SilverPine (Dec 7, 2018)

I think what Mr fourteen is trying to say is competitor pricing is irrelevant if you don't know your own expenses.


----------



## Rob80x (6 mo ago)

Double post


----------



## Rob80x (6 mo ago)

jpeero said:


> I am usually low balling myself and want to find ways to get people to pay proper


So why do you think that you are low balling yourself? What is proper pay?


I’m a residential guy only, so I can only speak for residential accounts. People will only spend so much, and it’s only fair to charge so much for clearing snow. At the end of the day it’s a basic service that anyone with a shovel can accomplish. So controlling your expenses is important. You can’t ask people to make up for your overspending. 

I am sure that I would be considered a low baller. But I have reasonable equipment that costs a reasonable amount for the jobs I take on, and I keep my route tight so there isn’t much drive time involved. This in turn allows me to charge a fair price for my service. Most of my accounts are $300-$500 for the year. I do not shovel walks or salt. We get 120” of snow on average here.

Of course large commercial jobs that require more than one basic truck are at another level from what I am talking about.


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

Ditta&Sons said:


> did you read the original post? he said he is usually lowballing himself and wants to get people to pay proper. he wants to know how to get to the proper price. the simplest way to do that is find out what other companies are charging. like i said before, i dont know why people are making this so complicated.
> i said all he has to do to find that out is to ask a few companies for quotes. he could do that for one of his current properties.


Yes, I read the original post. And again, I'm not against the advice you gave in finding out what other companies are charging in his area. What I do take exception to is you placing no importance on expenses. If anyone needs to figure out his/her expenses, it's this OP. However, you think it's sound advice to tell him/her not to worry about expenses as they are a moot point. That's pretty dangerous advice.


----------



## dieselss (Jan 3, 2008)

Op not coming back


----------



## jpeero (Dec 29, 2020)

Ditta&Sons said:


> Find out what the going rates are for your area and put yourself either below or above the average, simple as.
> Do you offer a seasonal contract price or per visit price? Residential or commercial? Do you want lots of new business or are you able to be picky?


Ill do either or, a season contract or per visit but I prefer per visit


----------



## jpeero (Dec 29, 2020)

Ditta&Sons said:


> How would you know?
> 
> I assume you know other contractors that you've spoken with about pricing, I know several that i speak to about lawn and snow pricing, you could call random companies up and give them an address and ask for a quote, (many companies do estimates online, its really easy to get a street view on google these days), you could look in the local ads, many contractors put their starting prices in their ads, you could ask people that you know how much they've paid in other years, many new customers are happy to share the price they paid in other years.
> 
> I dont understand why this is so difficult? its just research


i just didnt know whether to charge by square foot, per visit, or by snow fall etc... or how much of a profit margin I should make.

i endedup calling a local company to get an idea


----------



## jpeero (Dec 29, 2020)

Hydromaster said:


> A newbie isn’t going to have any contacts
> Like you…
> somebody’s starting price , driveways start at $20 isn’t giving you a proper price structure that’s an advertising ploy.
> 
> ...


honestly i know how much it costs me to do a driveway and it really isnt much per visit. but if something goes wrong with equipment that goes up quite a bit. with the time and effort i put in, i just want to make sure I am being fair with the way I charge


----------



## jpeero (Dec 29, 2020)

Ditta&Sons said:


> alright, so you bought a snow shovel for $20 and youre driving your mothers honda around for $10 in fuel each snowfall, these are your business costs, what now?


smh 😒


----------



## jpeero (Dec 29, 2020)

cwren2472 said:


> Maybe that guy that accused the homeowner of "ripping him off" should have used that Google Earth thing prior to accepting his contract...


yes, because there is no such thing as a honest homeowner or real estate agent

to be clear looking at a driveway on google maps does give me an idea how long it will take and/or how difficult it will be but it doesn't give me a price.

i called the local snow company and for a regular size driveway they start at 650$ + HST. I called about the homeowner who I felt was ripping me off and the local snow company said they "wouldn't touch" two of the properties the guy had given me. That should tell you something. He was definitely low-balling me, as I made less per driveway than my other customers and it took much longer. He had worked it out so that it was a flat rate and after just one run I was making less.

I actually re-negotiated with the customer and went from 112$ per week to $150 per run, and instead of 4 properties it is only 3 properties, avoiding the nasty apartment on a busy street.


----------



## jpeero (Dec 29, 2020)

Ditta&Sons said:


> I wanted to tell him that but I thought he got an earful from everyone else. That isn’t google earth, this is just google maps, it comes on your phone


to be clear looking at a driveway on google maps does give me an idea how long and/or difficult it will be but it doesn't give me a price.

i called the local snow company and for a regular size driveway they start at 650$ + HST.


----------



## jpeero (Dec 29, 2020)

SilverPine said:


> Call me old fashioned, but I personally go to every site and do a walk through before giving an estimate for maintenance. Google maps are only good for sqft. That being said, we rarely touch residential houses.


you never know what kind of unexpected things could be there.


----------



## jpeero (Dec 29, 2020)

Fourteen Contracting Inc. said:


> Ok, and once you have that number how do you know if you'll be profitable or not? Seeing as your expenses are a moot point.


for me, if i can make an average of $50 an hour I think I am doing ok.


Ditta&Sons said:


> did you read the original post? he said he is usually lowballing himself and wants to get people to pay proper. he wants to know how to get to the proper price. the simplest way to do that is find out what other companies are charging. like i said before, i dont know why people are making this so complicated.
> i said all he has to do to find that out is to ask a few companies for quotes. he could do that for one of his current properties.


this is what I did, i called and got quotes from local company. Most start at $650 per season and go up from there. I had them quote me for four properties and they actually refused two of them due to location.


----------



## jpeero (Dec 29, 2020)

SilverPine said:


> I think what Mr fourteen is trying to say is competitor pricing is irrelevant if you don't know your own expenses.


my expenses at the moment are pretty much the cost of gas and insurance. However, I had to pay a lot to get a good blower and if something goes wrong I need to have money to fix it. I think Ditta&sons was right to say just call around because that is what I did and they gave me a good idea what to charge.

I appreciate everyone's input on this thread, your wisdom is valuable


----------



## dieselss (Jan 3, 2008)

jpeero said:


> my expenses at the moment are the cost of gas


Your sure about that Clark?


----------



## jpeero (Dec 29, 2020)

Rob80x said:


> So why do you think that you are low balling yourself? What is proper pay?
> 
> 
> I’m a residential guy only, so I can only speak for residential accounts. People will only spend so much, and it’s only fair to charge so much for clearing snow. At the end of the day it’s a basic service that anyone with a shovel can accomplish. So controlling your expenses is important. You can’t ask people to make up for your overspending.
> ...


Well i just find dealing with some customers difficult because they are looking to get the lowest rate, and I am just looking to get a customer. I think for me proper pay is around making $50 an hour or more. This covers all my gas fees, lets me make a bit more than minimum wage, and allows me to put some money into savings in case something happens. My local company starts at $650 + HST for the season which I would average about $40 per run, which is just a bit over what I charge.

for now, i am avoiding large commercial jobs. I need proper insurance and equipment to do that and I am just not prepared for that yet


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

jpeero said:


> my expenses at the moment are the cost of gas. However, I had to pay a lot to get a good blower and if something goes wrong I need to have money to fix it. I think Ditta&sons was right to say just call around because that is what I did and they gave me a good idea what to charge.
> 
> I appreciate everyone's input on this thread, your wisdom is valuable


Ok, you have your price now, well, you have your competitor's price, but you have a starting point on price or at least what your market will support. 

How can your only expense be fuel? 
What about insurance? Maintenance on your vehicle? Maintenance on your equipment.... also, do you want to get a truck with a plow in the future? New? Used? You should be factoring these all into your price.


----------



## jpeero (Dec 29, 2020)

dieselss said:


> Your sure about that Clark?


yeah I am pretty sure about that. I think a lot of people are grouping 'expenses' and 'unexpected expenses' into the same category. If I did that, I would never get an accurate idea of what my expenses are because it depends on random factors.

An unexpected expense is *an expense that comes as a total surprise*. You didn't see it coming and couldn't predict that it was going to happen

so yes, my expenses at the moment, the ones i can predict, are pretty much just gas/insurance as all my equipment is doing well.


----------



## Philbilly2 (Aug 25, 2007)

jpeero said:


> yeah I am pretty sure about that. I think a lot of people are grouping 'expenses' and 'enexpected expenses' into the same category. If you do that, you will never get an accurate idea of what your expenses are because it depends on random factors.
> 
> so yes, my expenses at the moment are pretty much just gas as all my equipment is doing well.


wow...


----------



## EWSplow (Dec 4, 2012)

jpeero said:


> yeah I am pretty sure about that. I think a lot of people are grouping 'expenses' and 'enexpected expenses' into the same category. If you do that, you will never get an accurate idea of what your expenses are because it depends on random factors.
> 
> so yes, my expenses at the moment are pretty much just gas as all my equipment is doing well.


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

jpeero said:


> yeah I am pretty sure about that. I think a lot of people are grouping 'expenses' and 'unexpected expenses' into the same category. If I did that, I would never get an accurate idea of what my expenses are because it depends on random factors.
> 
> An unexpected expense is *an expense that comes as a total surprise*. You didn't see it coming and couldn't predict that it was going to happen
> 
> so yes, my expenses at the moment, the ones i can predict, are pretty much just gas/insurance as all my equipment is doing well.


Your equipment breaking down isn't an unexpected event.


----------



## dieselss (Jan 3, 2008)

Philbilly2 said:


> wow...


Triple like....


----------



## Ditta&Sons (Oct 21, 2015)

jpeero said:


> for me, if i can make an average of $50 an hour I think I am doing ok.
> 
> this is what I did, i called and got quotes from local company. Most start at $650 per season and go up from there. I had them quote me for four properties and they actually refused two of them due to location.


thats great, now you know what others are charging in your area and you can raise prices and feel confident that you wont be lowballing.
50/hour is way too low for snow removal, you can easily do a double car driveway for 50 per visit


----------



## jpeero (Dec 29, 2020)

Philbilly2 said:


> wow...


wow what?


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

jpeero said:


> wow what?


His mind is blown by your lack of knowledge of your expenses... however, since knowing your expenses isn't a big deal, he's probably overreacting


----------



## Philbilly2 (Aug 25, 2007)

jpeero said:


> wow what?


If you think that gas is going to be your only planned expense you will have A LOT of "unplanned" expenses that are "planned" expenses to every other business. 

Depreciating assets are a real thing...


----------



## SilverPine (Dec 7, 2018)

I think the message isn't getting through. If your in this game long enough, most unexpected expenses are actually expected. Breakdowns WILL happen. Anything that's truly unexpected would usualy fall under insurance one way or another. Or if you are me and your insurance went up 70k last year, THATS unexpected.

I would highly recommend hiring an experienced book keeper or an accountant to help out. I have some phone numbers for you if needed.


----------



## jpeero (Dec 29, 2020)

Fourteen Contracting Inc. said:


> His mind is blown by your lack of knowledge of your expenses... however, since knowing your expenses isn't a big deal, he's probably overreacting


more like a lack of expereince with this kind of thing. Until it happens to you, you don't really know. So far I haven't had anything unexpected happen


----------



## Fourteen Contracting Inc. (Jul 5, 2019)

jpeero said:


> more like a lack of expereince with this kind of thing. Until it happens to you, you don't really know. So far I haven't had anything unexpected happen


Fair, my comment was more directed at Ditta who thinks it's more important that you have a number (your competitor's) to charge your clients than knowing your expenses. 
Your replies are showing how dangerous it is to just have a number to charge vs knowing your expenses (seen and unforseen). Don't get me wrong, no one is going to say your need to budget $ for fuel or you need to budget $ for insurance and give you exact amounts. However, they will tell you that insurance, fuel, maintenence, labor etc are expenses that you need to factor in, even if they don't exist yet for you. 

Anyway, I'm out. Good luck with the storm everyone.


----------



## Hydromaster (Jun 11, 2018)

What is the cost of labor?
What did your equipment cost?
He doesn’t know what he doesn’t know 









Cost of Doing Business Definition | UpCounsel 2022


The cost of doing business definition is any expense a business incurs while in the process of conducting business. A cost of doing business could be a direct cost, like raw materials, or an indirect cost, like building security.




www.upcounsel.com







https://simplicable.com/new/business-costs#:~:text=Business%20costs%20are%20expenditures%20or%20losses%20related%20to,or%20types%20of%20costs%20commonly%20incurred%20by%20businesses


.


----------



## EWSplow (Dec 4, 2012)

jpeero said:


> more like a lack of expereince with this kind of thing. Until it happens to you, you don't really know. So far I haven't had anything unexpected happen


I suggest looking at other threads where advice has been given by seasoned professionals.
You have insurance to cover, time spent on estimates and invoices, taxes, etc. As mentioned, you may need an accountant.
Nothing lasts forever, your truck, blowers, shovels, etc will all need to be replaced. You need to change oil at the very least. There'll be paddle replacements on blowers.
You need need to account for this.


----------



## Ditta&Sons (Oct 21, 2015)

Fourteen Contracting Inc. said:


> His mind is blown by your lack of knowledge of your expenses... however, since knowing your expenses isn't a big deal, he's probably overreacting





Fourteen Contracting Inc. said:


> Fair, my comment was more directed at Ditta who thinks it's more important that you have a number (your competitor's) to charge your clients than knowing your expenses.
> Your replies are showing how dangerous it is to just have a number to charge vs knowing your expenses (seen and unforseen). Don't get me wrong, no one is going to say your need to budget $ for fuel or you need to budget $ for insurance and give you exact amounts. However, they will tell you that insurance, fuel, maintenence, labor etc are expenses that you need to factor in, even if they don't exist yet for you.
> 
> Anyway, I'm out. Good luck with the storm everyone.


well, without knowing he can charge more, he was leaving money on the table, now hes more in line with what other companies are charging and can start to increase his income to pay for all the expenses that he will learn about. thats what his original question was, how can i charge more


----------



## Hydromaster (Jun 11, 2018)

14 Business Startup Costs Business Owners Need to Know - NerdWallet


We’ve put together a list of 14 types of business startup costs you’ll need to consider when launching your company.




www.nerdwallet.com


----------



## Rob80x (6 mo ago)

Man you guys way overthink things, no wonder you feel the need to charge so much.

Residential is easy. Charge what is fair for the service provided. A homeowner doesn’t care what your costs are. They just want their driveway cleared for a fair price. If you can’t afford to do it for a fair price then the problem is with you and your choice to have your costs be so high.

I’m 43, and have ran a plow truck since I first got my license helping my dad with all of his accounts. The best customers are the ones who feel they get a good service at a good price. They stay loyal and don’t price shop on you. They are more understanding when you have an issue and can’t get to them right away. The list keeps going.


----------



## Hydromaster (Jun 11, 2018)

Rob80x said:


> Man you guys way overthink things, no wonder you feel the need to charge so much.
> 
> Residential is easy. Charge what is fair for the service provided. A homeowner doesn’t care what your costs are. They just want their driveway cleared for a fair price. If you can’t afford to do it for a fair price then the problem is with you and your choice to have your costs be so high.
> 
> I’m 43, and have ran a plow truck since I first got my license helping my dad with all of his accounts. The best customers are the ones who feel they get a good service at a good price. They stay loyal and don’t price shop on you. They are more understanding when you have an issue and can’t get to them right away. The list keeps going.


thanks but none of that has anything to do with knowing our costs or knowing what to change?
A fair price fair to who?
Who cares if they think it’s fair ,move onto the next customer.

How do you think a store fixes a price for a product they sell?
Do they go around town and see what everybody else is selling it for? what if everybody else is selling it for less and they would take a loss selling it at that price.
should they still sell it at the price everybody else is?

you just may have a hobby on your hands


----------



## cwren2472 (Aug 15, 2014)

jpeero said:


> yes, because there is no such thing as a honest homeowner or real estate agent


I sell plows - if a customer came in and told me "I paid $3000 for my last plow installed", then I go off that price and discover I've lost money afterward, is it right to blame the customer?




jpeero said:


> to be clear looking at a driveway on google maps does give me an idea how long it will take and/or how difficult it will be but it doesn't give me a price.


Well, yeah. That's kind of the whole "running your business" thing.


----------



## Hydromaster (Jun 11, 2018)

*Here are nine things taxpayers must consider when determining if an activity is a hobby or a business:*

Whether the activity is carried out in a businesslike manner and the taxpayer maintains complete and accurate books and records.

Whether the time and effort the taxpayer puts into the activity show they intend to make it profitable.

Whether they depend on income from the activity for their livelihood.

Whether any losses are due to circumstances beyond the taxpayer's control or are normal for the startup phase of their type of business.

Whether they change methods of operation to improve profitability.

Whether the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business.

Whether the taxpayer was successful in making a profit in similar activities in the past.

Whether the activity makes a profit in some years and how much profit it makes.

Whether the taxpayers can expect to make a future profit from the appreciation of the assets used in the activity.
The IRS has many resources to help taxpayers report their income correctly. See the more information section below for additional guidance.





Earning side income: Is it a hobby or a business? | Internal Revenue Service


Tax Tip 2020-108, August 25, 2020 — Whether it's something they've been doing for years or something they just started to make extra money, taxpayers must report income earned from hobbies in 2020 on next year's tax return.




www.irs.gov


----------



## Rob80x (6 mo ago)

Hydromaster said:


> thanks but none of that has anything to do with knowing our costs or knowing what to change?
> A fair price fair to who?
> Who cares if they think it’s fair ,move onto the next customer.
> 
> ...


The market sets the price for everything. And yes, if everyone else is selling it for less they need to be as well. It’s a commodity. Why do you think stores are struggling, because online prices are cheaper and they don’t know or want to know how to compete. A store owner can choose to complain about prices while they go out of business or they can find ways to compete, such as reducing costs. Same is true for snow removal

Fair price to the customer for the service provided. If you go to a run of the mill restaurant for a burger, and the price tripled in price from when you were there last week because the owner had to replace the grill, you would be upset. The burger is the same, but now you’re paying 3x for it. I’m sure you would find somewhere else for your next burger. So will residential customers who feel they are being ripped off.

I know business, and how to run them lean while being profitable. Maybe it’s something you should study up on.


----------



## Hydromaster (Jun 11, 2018)

Bud,
I retired at 58,
So Tell me again what I should charge.
or just hold on as I call around…

I know the difference between running a profitable snow business and having a hobby.

I now have a hobby plowing…snow.


----------



## EWSplow (Dec 4, 2012)

Rob80x said:


> Fair price to the customer for the service provided. If you go to a run of the mill restaurant for a burger, and the price tripled in price from when you were there last week because the owner had to replace the grill, you would be upset. The burger is the same, but now you’re paying 3x for it. I’m sure you would find somewhere else for your next burger. So will residential customers who feel they are being ripped off.
> 
> I know business, and how to run them lean while being profitable. Maybe it’s something you should study up on.


Is it possible that the restaurant owner accounted for such things when he set the price of his burger?


----------



## Rob80x (6 mo ago)

Hydromaster said:


> Bud,
> I retired at 58,
> So Tell me again what I should charge.
> or just hold on as I call around…
> ...


Good for you for being retired. I am not telling you what you should charge. Never have. And I have never said anyone should call around and see what others charge, that's moronic in my opinion.

But commercial guys can't plow residential for the same price to profit margins. They have a lot more overhead. Which is fine, they are set up to do commercial accounts. That's just the facts.

It's no different than a 5 star restaurant cannot sell hamburgers for the same price as McDonalds. And McDonald's cannot offer the same level of service or quality of food that the 5 star restaurant does, as they are not equipped for it. Same thing goes for snow work. If you are set up to do commercial, with the equipment, employees, high insurance rates, etc, then how can you offer the same price as someone who doesn't have near the overhead can on residential work. Same is true for the guy (like me, a one man show with one plow truck that has long paid for itself, and has lower insurance rates) cannot offer the same for commercial work as the commercial guys can. You have to be one or the other (Commercial or residential). It doesn't work to mix them from a business standpoint. The closest you can get is having commercial crews and also residential crews to help control the cost. But you're still not going to beat the independent owner/operator profit margins based on the same number of accounts without having to charge a lot more for the same service. That is all I am saying.

As for calling small operations a hobby, remember just because McDonalds can sell hamburgers for $2 doesn't make them a hobby restaurant. And I would much rather own a McDonald's than a 5 star restaurant. But that's just me.


----------



## Rob80x (6 mo ago)

EWSplow said:


> Is it possible that the restaurant owner accounted for such things when he set the price of his burger?


If that was the case then the price of the burger would have been the same the whole time. 

End of the day, people will only pay so much. The higher the price, the smaller the pool of people willing to pay. Sure, there's always those who will get the meal ticket accounts, but you can't slam those who have to get the lower end of the spectrum. And everyone can't expect to get those meal tickets. It all comes down to knowing your market and where you want to be in it above all else.


----------



## Hydromaster (Jun 11, 2018)

I haven’t run into any legitimate snowplow operations that lower their prices so they can plow in the ghetto


----------



## Philbilly2 (Aug 25, 2007)

Rob80x said:


> I’m 43, and have ran a plow truck since I first got my license helping my dad with all of his accounts. The best customers are the ones who feel they get a good service at a good price. They stay loyal and don’t price shop on you. They are more understanding when you have an issue and can’t get to them right away. The list keeps going.


Question... do you know you are making money? 

If so, at a good enough margin that you could scale it? or does it have to stay a one man band to operate.


----------



## Rob80x (6 mo ago)

Philbilly2 said:


> Question... do you know you are making money?
> 
> If so, at a good enough margin that you could scale it? or does it have to stay a one man band to operate.


Of course I know that I am making money. Simple bookkeeping tells me that.

Why does it have to scale? No reason it has to. I did that in the past with running a larger operation. For me, not dealing with employees, more equipment to purchase and maintain along with other things that goes along with a larger operation just aren’t worth it. Again, that’s for me. May be different for you.


----------



## Philbilly2 (Aug 25, 2007)

Rob80x said:


> Why does it have to scale? No reason it has to.


I am not saying you have to scale, I am asking if the way that you operating right now, could you scale?

Because if you can't scale it with out changing things, then in the end... the long and short is that it is a hobby.


----------



## Rob80x (6 mo ago)

Philbilly2 said:


> I am not saying you have to scale, I am asking if the way that you operating right now, could you scale?
> 
> Because if you can't scale it with out changing things, then in the end... the long and short is that it is a hobby.


Yeah, that’s not true at all. You have to change things to scale as it is a whole different business model.


----------



## EWSplow (Dec 4, 2012)

Rob80x said:


> If that was the case then the price of the burger would have been the same the whole time.


That's exactly my point.
The OP has to budget for repairs and replacement before quoting his price, because he can't go back to the clients later and ask for more money because of his poor planning.


----------



## Philbilly2 (Aug 25, 2007)

Rob80x said:


> Yeah, that’s not true at all. You have to change things to scale as it is a whole different business model.


----------

