# Last minute and just lost two of my biggest contracts to a low baller



## rampking (Oct 10, 2011)

Well pissed is not the word right now, I am actually more disappointed then I have been in a long time. I've been plowing snow now a couple of years and last year I went out on my own, I had a pretty good year. This year I had my sights set high and want to really go nuts....bought a new truck with a new blade and everything was looking great. I had two big contracts to me that I was told were mine, I actually see these two owners quite often, I even did landscaping for one and he loved the outcome. I get told yesterday and today that there hands were tied, they had to go with the other guy as he was so much cheaper.
I couldn't believe it, my city is going for **** with the cheap guys running around. I have no idea how these guys are paying people and covering the cost of their equipment when they are doing the lots for cost. 

I still have quite a few contracts that are paying me well, but I took I big hit these past two days......I'd rather see my equipment as lawn ornaments vs wearing it out for nothing. 

Sorry for the rants guys, but boy am I gutted.


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## WIPensFan (Jan 31, 2009)

Sorry to hear, maybe something else will come through, we've all had these days.


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## SNOWLORD (Aug 10, 2007)

That sucks. Its happening here to and quite regularly.


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## goel (Nov 23, 2010)

Sucks. Saying you got it is not enough. Signed paperwork in your hot little hands is all that matters.


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## leolkfrm (Mar 11, 2010)

...pray for major snow and it will happen....when the lowballers fall flat...charge premium rate to fix it


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## snoboss (Oct 19, 2012)

been their done that!! It is happening here in Wisconsin also. 30 years plowing a few of mine an their asking for quotes this year! Hey what is under that rock why its a low baller!!


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## salopez (Apr 11, 2004)

just lost my largest account to someone that was about 85% cheaper...have no idea how they are going to do it....figure i will be back next year.


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## snoboss (Oct 19, 2012)

I have been undercut 50% already and still retained the job do to confidence in the lowballer was not there but for the most part the low buck is all they see. These are different times and before I would drop my price i will just sit back and watch the fire burn!


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## iceman1 (Aug 10, 2011)

Remember it is a race to zero. The 1st company to charge zero and still stay in business wins.


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## Mike S (Feb 11, 2007)

iceman1;1503076 said:


> Remember it is a race to zero. The 1st company to charge zero and still stay in business wins.


I like that! Thats funny and true!


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## BOSS LAWN (Nov 6, 2011)

This happens alot, I lost a big contract this year to a guy who was "a little cheaper". Company always paid on time and never complained. 

I guess it's loose 1 gain 3.


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## SnowMatt13 (Jan 8, 2003)

My guess, especially if it is one or two truck operations that you are loosing to, is that they are doing it just to make a few bucks. Literally a few bucks. And they are doing that hoping that they don't break down because then they'll loose money. Or even worse, I bet they don't have the proper insurance, so when there's an issue, everyone is screwed.
Has happened to me when I was on the private side, even before the economy was a player in pricing like it is in today's market. I held my ground and reminded my customers I sold them piece of mind. Not just pushing some white stuff off their lot. 80% came back, with a price increase too.


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## JD Dave (Mar 20, 2007)

You say you've been plowing for a couple years so I'm assuming you took these jobs from someone else so the contractor you took these from might also be calling you a low baller. This might not be the case but years ago when we really started to expand we were considered low ballers but that was far from the case. Still really sucks to loose good work, I know how it feels. Hopefully things work out for the better for you.


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## NicholasMWhite (Oct 5, 2008)

JD Dave;1503325 said:


> You say you've been plowing for a couple years so I'm assuming you took these jobs from someone else so the contractor you took these from might also be calling you a low baller. This might not be the case but years ago when we really started to expand we were considered low ballers but that was far from the case. Still really sucks to loose good work, I know how it feels. Hopefully things work out for the better for you.


I totally agree with you. Walmart is considered a low baller, but the Walton family doesn't seem to be hurting much. This is what free market's are about, the customer finding a balance between quality and price. This industry makes things interesting because you have to contract for the work before you know what quality work you're getting, but it's still just simple supply and demand. Sometimes, like in your case JD, the "low baller" can charge a lower price because they found better/cheaper/easier alternatives to doing things. Example: more efficient equipment (tractor/inverted blower) on better way's to salt (pretreating the lot before snows), the ebling plow. All of this keeps the industry going and keeps new ideas rolling out which builds up the economy. If everyone charged the exact same, no one would be interested in finding "the next mouse trap."

To the OP, I'm sorry that you had to lose work. Time to get out there and find some more. It's not personal, it's just business.


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## ImpressPlowing (Oct 9, 2012)

Just had the same happen to me, this property signed with a low baller, only they forgot that these guys didn't include the equipment I do I.e. bobcat, payloader. Now they want me back


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## hunt 444e (Oct 1, 2011)

Hear it all the time just remember volume,volume,volume.. happened twice to me last year guess who called back this year though and of course sweet as pie....lol. a real kick in the [email protected] is actually performing work at site come to find out paperwork signed to two completely different contractors. Needless to say if you can't make your target dollar don't lowball yourself to get a bid. Happy trails .


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## KTLawnCo (Dec 18, 2010)

I hear ya, just lost a chain of 9 stores to some lowballer. No sense in working for peanuts...


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## EliteJ (Nov 23, 2007)

I just lost a few of my larger contracts to a new smaller company and they under cut me by 55%. That made me wonder how they could do it so I took my wifes car to there office ( Some guys back shed ) and just asked him how he can keep his prices so low. We live in Guelph Ontario where snowbear plows were made and he is a old employee that bought a bunch of old stock plows before they closed there doors. He has 3 trucks 1. Nissan Hard body 2. ford ranger 3. chev s10 2wd. Then I asked who he is insured with and he laughed and said no need for insurance if you do a good job. I wished him luck and gave him one of my business cards just incase he needs help. I remember when plowing snow was not only fun but you could make some good money too!


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## ImpressPlowing (Oct 9, 2012)

Feeling the pain, was out bidded just this morning by a small amount. We have been doing the 2 sister accounts for 7 years. Than the person who signs the account said that they will keep us in mind because they aren't sure if the new guy can handle the work. When I asked if he has a dedicated loader for the site she said no, she forgot that part. Now they saved themselves $1,000 bucks but don't have a loader there. I just laughed


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## iceman1 (Aug 10, 2011)

just remember it is a race to zero!!


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## Italiano67 (Feb 16, 2005)

Part of the problem is the people responsible for signing a contractor think they know how to do the job and how we are ripping them off with our prices.And very few if any have ever bought a machine or plowed a lot.


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## ImpressPlowing (Oct 9, 2012)

Exactly, they can't understand the pricing


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## hammerstein (Feb 2, 2007)

Are you guys not that good in sales that you can not spell it out to customers what you are giving them is better than someone else no matter what? You let them just take your bid and compare to someone else's bid and you're not there to add value to your services and show them how you are better? 

Impress you were a $1000 more and have a loader on sight only for them. There is no wiggle room to knock 500 - 1000 off and still be profitable? No way to make the customer realize that 
your apples are better than plow company b's oranges?


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## ImpressPlowing (Oct 9, 2012)

Hammerstein I'm not sure where you are from but where I'm from a saying goes money talks bull$h1? Walks. People see a discount and forget about other things, also let's not forget who know if there is a kickback involved


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## iceman1 (Aug 10, 2011)

sounds like hammerstein may be winning the race!!


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## ImpressPlowing (Oct 9, 2012)

Lmao, Hammerstein wanna work for me


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## hammerstein (Feb 2, 2007)

I would assume if you have a loader on sight the plowing portion is around $40,000 give or take. $1000 is 2.5% companies give that kind of discount for paying on time. I am in no way in a race to the bottom. Just maybe sometimes people need their hand held if there not sure on what they are getting. I had a guy tear up a some one elses contract today and sign mine. Also sat in his office while he called the other company to cancell it. Mine was a higher bid but better service. He needed to be shown why. Don't be afraid to ask to see other bids and go over them with the customer. Be good with numbers and think fast. I have been told no many times in life but I have also turned many of those nos around.


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## iceman1 (Aug 10, 2011)

agree! I was just joking.


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## ImpressPlowing (Oct 9, 2012)

Hammer I've bidded on my fair share of contacts, I also have a fair share of my area I'm not worried about a couple of accounts that want to use a low bidder, they'll call mid storm crying


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## potskie (Feb 9, 2011)

EliteJ;1504857 said:


> I just lost a few of my larger contracts to a new smaller company and they under cut me by 55%. That made me wonder how they could do it so I took my wifes car to there office ( Some guys back shed ) and just asked him how he can keep his prices so low. We live in Guelph Ontario where snowbear plows were made and he is a old employee that bought a bunch of old stock plows before they closed there doors. He has 3 trucks 1. Nissan Hard body 2. ford ranger 3. chev s10 2wd. Then I asked who he is insured with and he laughed and said no need for insurance if you do a good job. I wished him luck and gave him one of my business cards just incase he needs help. I remember when plowing snow was not only fun but you could make some good money too!


LMFAO, I will so be on the look out for those trucks this winter.

You need more customer like we have, They REQUIRE a certificate of insurance with the bid.

Better yet show yours to those customers and explain why it's so important. A guy I used to work for included Ownerships and Insurance copies for all his trucks and equipment to show customers that the people who will be servicing their properties works for him in his equipment. Worked well for him. Guy had alot of higher end commercials.


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## jasonv (Nov 2, 2012)

I sympathize with those losing contracts to these so-called "low ballers", but there is a reason for this; the market for this service is not at equilibrium.

Just a little quote from old school economics;
"Profit breeds competition. Excess profit breeds ruinous competition."

You see, it has gotten to a point where the size of vehicles has generally increased to the absurd. People go out and buy full sized 4x4 trucks and SUV's for stupid things, like carting around groceries and kids. It didn't used to be that way, it used to be that a regular 2wd car would satisfy most people, but now it is STYLISH, and has been for a while.

Now back a couple of decades ago, and even into the mid-late 90's, if you wanted to go into the plow business, you had to first acquire a truck. There was a significant barrier to entry. Yes, they could be had for relatively inexpensive, but there was a limited supply, and chances are that you didn't already have one.

NOW, everybody and his brother has a 4wd truck, so the only barrier to entry is the plow itself. You have these guys who HAVE a truck, add in a poor grasp of economics and figuring that their expenses are the purchase price of the plow itself (not considering maintenance and cost of fulfilling other obligations, like their DAY JOB), and you have, at least a PERCEPTION that there is a huge profit to be had with very minimal cost of entry.

So the market correction works like this;

You're going to have all the Jimmy's and Billy-Bob's going in with their old beater pickups, or the SUV that their wife drives during the week to haul the kiddies to school, figuring that they can make a fortune plowing. When they start looking for customers for the same prices that YOU GUYS are charging, they're going to find that nobody is interested in their services, so they're going to drop their prices to bare minimum.

THOSE GUYS will always be around, as long as the "market value" for a 1st class snow removal service is up where it is. They might only last one year, but next year, the guy who is the new owner of the last guy's plow will take his place.

So the 1st class services are going to have to reduce their rates somewhat in order to compete. When the general price level reaches equilibrium, Jimmy and Billy-Bob will lose their EXPECTATION of making a fortune, so their numbers are going to drop off. Those that don't will eventually realize that they need to raise their rates in order to provide a competitive service - i.e. equipment maintenance, more equipment, etc.

Now I'm not saying that the rates are going to have to fall so dramatically that you can no longer survive, obviously, bare survival is the baseline minimum for a sustainable industry. It does seem, however, that there will need to be a correction and/or some change to create barriers to entry. Perhaps a reduction in the popularity of oversized grocery haulers as large vehicle prices increase as emissions constraints tighten....? Of course this is a LONG TERM correction.


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## ALC-GregH (Nov 26, 2008)

salopez;1502986 said:


> just lost my largest account to someone that was about 85% cheaper...have no idea how they are going to do it....figure *i will be back next year*.


Ain't no way. I got it covered.  I don't need to make money to plow snow.


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## MSsnowplowing (Nov 1, 2012)

just lost my largest account to someone that was about 85% cheaper...have no idea how they are going to do it....figure i will be back next year. 

I hear you, I lost an account last year to a low bidder. 
The place took about 1 1/2 with plowing, sanding and sidewalks.
Asked what his price was and they told me.
Doing the math the guy was plowing, sanding and sidewalks for $30 an hour All I could think was Wow, I pay my subs twice that.
He could have come work for me and made more money.

But I always leave my door open and tell them keep my card and if you have any problems give me a call.

And in the long term, people like that well burn out when we are still going and expanding.


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## Brando55 (Jan 6, 2008)

rampking, I know exactly what your talking about. Its getting pretty bad around here for the commercial properties. I dont know how some people are doing it with salt alone being $95 a ton now.


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## Spool it up (Oct 30, 2012)

rampking;1502714 said:


> Well pissed is not the word right now, I am actually more disappointed then I have been in a long time. I've been plowing snow now a couple of years and last year I went out on my own, I had a pretty good year. This year I had my sights set high and want to really go nuts....bought a new truck with a new blade and everything was looking great. I had two big contracts to me that I was told were mine, I actually see these two owners quite often, I even did landscaping for one and he loved the outcome. I get told yesterday and today that there hands were tied, they had to go with the other guy as he was so much cheaper.
> I couldn't believe it, my city is going for **** with the cheap guys running around. I have no idea how these guys are paying people and covering the cost of their equipment when they are doing the lots for cost.
> 
> I still have quite a few contracts that are paying me well, but I took I big hit these past two days......I'd rather see my equipment as lawn ornaments vs wearing it out for nothing.
> ...


Win some , lose some ....thats snow business and this economy . Sounds like your contracts weren't bullet proof enough .


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## chachi1984 (Feb 10, 2012)

Brando55;1512439 said:


> rampking, I know exactly what your talking about. Its getting pretty bad around here for the commercial properties. I dont know how some people are doing it with salt alone being $95 a ton now.


i agree , lets say it takes you 1.5 hrs to plow, salt and do the sidewalks, depending on how deep the snow is. salt $125 yr, gas 40-50 bucks. whats the point to even getting out of bed for 30 bucks.

then lets say something happens to your plow or truck well then your really in the hole


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## lawnsrusinc. (Nov 30, 2003)

I had a $44,000 plow account one location had it for 4 years and lost it now I don't let any one job equate to more than 10% of my seasonal snow income. Cause clients wait till the last minute to let you know they are going with a different company and now your left with the equipment.


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## YardMedic (Nov 29, 2006)

Feeling people's pain here. Lost a relatively small commercial account... Regional manager said that another contractor doing a lot of work in Mass "has a guy who lives in NH and takes a truck home." Said the deal was too good for the owner to pass up. Like many have said here, watch the wingnut trying to handle a lot of snow being spread so far, with the idea things will be covered by someone who "should be able to handle it" because he takes the truck home at night. We'll see! 

Best of luck out there guys


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## xtreem3d (Nov 26, 2005)

lawnsrusinc.;1513369 said:


> I had a $44,000 plow account one location had it for 4 years and lost it now I don't let any one job equate to more than 10% of my seasonal snow income. Cause clients wait till the last minute to let you know they are going with a different company and now your left with the equipment.


Very smart IMO....it can be tempting to take on a huge place that you will need to invest into. I am certainly guilty of that.I took on a complex years ago that I had to make very substaintial investment into as far as snow equip and also backup equiptment (was required !!). I did this without any multi year deal. In my case it has worked out good but after having done it once I would never do such a stupid thing again.
Steve


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## jkiser96 (Sep 19, 2006)

I plow for the local highway dept. & went in a couple of weeks ago & signed my contract for this year. I get a call from them last week that they decided to rebid the plowing & need me to rebid it. I ask why since I already signed a contract & they tell me that a buddy of the county commisioners wants in on plowing this year so they decided to rebid.
I do a lot of work for the county so I am not saying much but if I lose any hours from this then I will definitely get my point across at a commisioners meeting.


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## PhilFromErie (Jun 29, 2009)

Anytime anyone ever looses a contract its a lowballer that took it, anytime anyone gets one they took it from a guy that was overpriced.


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## xtreem3d (Nov 26, 2005)

jkiser96;1513525 said:


> I plow for the local highway dept. & went in a couple of weeks ago & signed my contract for this year. I get a call from them last week that they decided to rebid the plowing & need me to rebid it. I ask why since I already signed a contract & they tell me that a buddy of the county commisioners wants in on plowing this year so they decided to rebid.
> I do a lot of work for the county so I am not saying much but if I lose any hours from this then I will definitely get my point across at a commisioners meeting.


That sounds completely unethical. What good is any contract?


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## ringahding1 (Jan 16, 2010)

Man sorry to hear that! ! ! I'm sure you know when it comes to commercial, you are just a NUMBER.

We lost one this year due to manager change-over...third str8 year a new manager has come into position at this hotel we have been plowing for 2 years. So I didn't know whose butt to kiss! haha

The good new is we added 6 new commercial accounts. Next year may be a different story, but for now we will take it.

I am not trying to add insult to injury, just hang in there man...seriously if you need help ONLINE to get your name out there...I will share my successes with you.


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## birddseedd (Jul 12, 2010)

I agree with what most are saying. But what i think most people forget, is you dont start off with the big name. I am not devisser, People wont trust me like they trust them. and frankly. i cannot give as good of service as they do. if my equipment goes down, i have to take the time to fix it. if theirs goes down, they drive to the shop, pick up one of the backups and worry about fixing it during down time. doing this costs more money.

In my opinion. there are two kinds of lowballers.

the first is the ones we dont like. they dont have insurance, they are only making their own wages and as was stated above, if something goes wrong, their screwed.

the second is the misunderstood lowballer new guy in town. no name. no reputation. and alot of the time not the best newest equipment. frankly, noone is going to pay him top dollar anyway. in this industry you have to start off small and build up your client base. you charge less to build that client base. as you grow, so do your methods, and so does your quality of service and thus your price. but when you are starting off. the bottom line is you need the customers, you need some cash flow. without it you wont survive.

and frankly, all of this comes down to supply and demand. ultimatly that is what effects price. Last year, devisser, one of the largest lco's in the country, were handing out flyers doing drives for 10 dollars. its all supply and demand. there was no work along with increased numbers of people doing the work. unless you have a reputation that will get you work you HAVE to charge less or else you wont get work.


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## MSsnowplowing (Nov 1, 2012)

*got one for you*



PhilFromErie;1513706 said:


> Anytime anyone ever looses a contract its a lowballer that took it, anytime anyone gets one they took it from a guy that was overpriced.


Ha, I got one for you.

Bid on a property, had the best numbers, went thru the loops, insurance, references etc...
The Manager was happy and would have signed me on that day.

But, oh yes the Big but, had to submit 3 bids to Corp. headquarters.

One week goes by and I happen to be driving by and see it staked.

So I pull in to find out what happened and what do I hear.

"they gave it to a friend who plows, and he had the higher bid"

All I could do was shrug and say it happens, told him to keep my card handy and if he had any problems give me a call.

As I was leaving, I was looking at this guys stake job. 
he had stakes put where he had to plow the snow. 
He overstaked the whole thing, you could stake it proper with say 20 stakes and he had 40 as an example. 
just plain overkill and lack of planning where the snow is going to be put.

I have a weird feeling mid winter I'm going to be getting a call.


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## PhilFromErie (Jun 29, 2009)

MSsnowplowing;1517764 said:


> Ha, I got one for you.
> 
> Bid on a property, had the best numbers, went thru the loops, insurance, references etc...
> The Manager was happy and would have signed me on that day.
> ...


Yea, that happens too. I would never be on the good end of that scenario though, all my friends want me to plow for nothing.


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## birddseedd (Jul 12, 2010)

Funny. i put out some bids that were low as crap. not so much as got a call.


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## GARRETTWOOD (Feb 3, 2005)

iceman1;1503076 said:


> Remember it is a race to zero. The 1st company to charge zero and still stay in business wins.


Same thing here school district went for $37.00 per HR and county work $45.00 .


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## birddseedd (Jul 12, 2010)

went to a meeting with a buddy. the chuch owns a skidsteer they want to pay us 25 an hour to use. decent pay for an employee, not sure if its worth it for a company owner tho. and they want a garonteed time to be there. not sure if this is even worth doing.


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## lawnsrusinc. (Nov 30, 2003)

25 an hr you couldn't cover your payroll and payroll taxes on that. I would say no! I can't believe work is going that cheap by you. By me there is not a lot of work we bid 3.4 million cold call new work and received only 30k iin contracts. This is commercial work. Keep hammering the pavement.


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## birddseedd (Jul 12, 2010)

lawnsrusinc.;1518694 said:


> 25 an hr you couldn't cover your payroll and payroll taxes on that. I would say no! I can't believe work is going that cheap by you. By me there is not a lot of work we bid 3.4 million cold call new work and received only 30k iin contracts. This is commercial work. Keep hammering the pavement.


that is with their equipment. they are basicialy looking for empployees to do it. my buddy who the contract is actualy with will do most of it i think. he doesnt have a truck. but doesnt need one as they have the skidsteer. frankly he'll make more taking extra time himself while i do hsi 20 plowing contracts since i caint seem to get customers, but have a truck.

shrugs.


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## jkiser96 (Sep 19, 2006)

I found out this week that the company that wanted in SOOOO bad forgot to get their proposal notarized so their bid got thrown out. This was one of the largest snow removal companies in Indy so you would think they would know how to prepare a bid & follow directions. Karma is a real bit#@.

:salute:


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## MB3 (Oct 11, 2007)

Same thing happened to me way back in the beginning, was told I had the job and BAM - sorry, had to sign with other guy. I never count on anything unitl I have ink on paper now. They will tell you anything, I have even went to court with someone who tried to change their mind after signing, it was the easiest court case every. Is this your signature, you signed the contract, now honor it, or pay it off.


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## BucklesIX (Sep 19, 2012)

I just started last year, when I got a bunch of customers from a friend who was doing it under the table. I do mowing and landscaping in the summer, professionally, so I am dead fast against undercutting, so when I moderately raised my prices the 1rst year, for fuel and costs, most went to the unemployed yahoo down the road that will do a 30 dollar driveway for 12 bucks. This year he doesn't have many of those customers because another unemployed yahoo down the road will do them for 10 LOL. I don't know how they plan on having money to fix or replace their cold war rust buckets, but best of luck to them. I'll just do enough this year to pay off all my costs and investments, then use my plow to do my two drives, and my moms for the next 20 years! I'll let them go into the red replacing parts with money they don't have lol


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## birddseedd (Jul 12, 2010)

BucklesIX;1522007 said:


> I just started last year, when I got a bunch of customers from a friend who was doing it under the table. I do mowing and landscaping in the summer, professionally, so I am dead fast against undercutting, so when I moderately raised my prices the 1rst year, for fuel and costs, most went to the unemployed yahoo down the road that will do a 30 dollar driveway for 12 bucks. This year he doesn't have many of those customers because another unemployed yahoo down the road will do them for 10 LOL. I don't know how they plan on having money to fix or replace their cold war rust buckets, but best of luck to them. I'll just do enough this year to pay off all my costs and investments, then use my plow to do my two drives, and my moms for the next 20 years! I'll let them go into the red replacing parts with money they don't have lol


thats the thing about it. they do make money and stay in the black. only enough to pay their own wages, but they still make money.

last year was horible. and i know some of hte largest lco's were doing drives for 10 dollars...

frankly im starting to think all the complain about undercutting here is a bunch of bull. its supply and demand. thats why walmart makes so much money.

me personally. i only go to walmart if its something meijer just doesnt have.


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## BucklesIX (Sep 19, 2012)

PhilFromErie;1513706 said:


> Anytime anyone ever looses a contract its a lowballer that took it, anytime anyone gets one they took it from a guy that was overpriced.


True the difference is now the amount of unemployed people looking for anything, and not doing math.


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## BucklesIX (Sep 19, 2012)

birddseedd;1522013 said:


> thats the thing about it. they do make money and stay in the black. only enough to pay their own wages, but they still make money.
> 
> last year was horible. and i know some of hte largest lco's were doing drives for 10 dollars...
> 
> ...


My standards are higher than living paycheck to paycheck. It is why I can now afford to mow lawns for a hobby. Still have the pride to charge a professional rate thought. LOL


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## birddseedd (Jul 12, 2010)

BucklesIX;1522036 said:


> My standards are higher than living paycheck to paycheck. It is why I can now afford to mow lawns for a hobby. Still have the pride to charge a professional rate thought. LOL


musta been nice starting out on the top and not having to build your company from teh ground up.


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## BucklesIX (Sep 19, 2012)

birddseedd;1522037 said:


> musta been nice starting out on the top and not having to build your company from teh ground up.


It's called Horizontal Integration lol And in this case it did not work lol


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