# How Would you fix the Snow and Ice Industry



## Tony Bonventre (Feb 11, 2004)

If you could change one thing about the Snow and Ice Industry, what would it be. What bothers you the most? Is it the National Snow Clearing Houses taking all your profit, The rising insurance costs, Fuel costs, being underbid. What would you change.


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## JohnnyRoyale (Jun 18, 2006)

Great question Tony.

I think I'll start with liablilty issues.


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## Tony Bonventre (Feb 11, 2004)

It just gets more frustrating every year this one has to be the worst yet. I have been Bidding Snow and Ice for the past 15 years and have never been underbid as bad as this year, I don't understand am I the only one who's ins. rate increases every year, I did not change my bid numbers on sites I have been doing for a few years suddenly this year my numbers are double everyone else, HMMMMMMMMMMM what happened.


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## Tony Bonventre (Feb 11, 2004)

Johnny great start you mean you don't think that we should be responible for the 90 year old blind lady wearing heels and using her walker to go to the department store in the worst Ice storm in 100 years.


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## JohnnyRoyale (Jun 18, 2006)

My frustations sometimes include;

Liabilty Issues. 
Insurance Costs. 
Equipment Costs, 
Employees, 
Lowballers, 
Salt Supply,
Ministry of Transportation.

The joys of this industry.


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## FordFisherman (Dec 5, 2007)

There needs to be some sort of license or certification to separate experience, insurance amounts, some sort of accountability, like in other service fields.


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## Tony Bonventre (Feb 11, 2004)

The big Question is how do we fix it.


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## JohnnyRoyale (Jun 18, 2006)

Tony Bonventre;843285 said:


> Johnny great start you mean you don't think that we should be responible for the 90 year old blind lady wearing heels and using her walker to go to the department store in the worst Ice storm in 100 years.


Absolutley right- IMO, snow is an act of God, and should be treated as such. Who does someone sue when they are driving and get caught in a freak rain storm, and cant see and get into an accident?

What irks me the most is when you get dragged into a lawsuit because it is discovered someone slipped and fell on a patch of ice because someone else decided to clear the snow off their car in the parking lot and it refroze. Or when someone wipes out on some frozen mop water some kid decided to empty out on a walkway at the end or beginning of the day. This sh!t is all beyond our control-but cost our insurance companies money to investigate and defend, which explain the increased premiums.


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## Mark Oomkes (Dec 10, 2000)

I would like to see better educated consumers.

This wouldn't solve the lowballing or national company issues, but it would go a long way in helping them understand what we have to go through to prepare for servicing them, amounts we spend to service them, sleep lost\screwed up personal lives servicing them.

Could be an interesting question, if you could get them to answer it fully and honestly. Do you know what goes into plowing your lot and salting it?

Possibly, at least some would, finally get it and not be so apt to jump on the first idiot that walks in the door with a grossly lower bid.

Maybe if they understood or at least had a slight clue of the prep time, the stress before\during\after a storm, the worrying about what equipment is going to break, which employee might not show, which employee is sick, what is going to get hit and turned into insurance, which _90 year old blind lady wearing heels and using her walker to go to the department store in the worst Ice storm in 100 years_ is going to file a lawsuit, etc, etc, etc; just maybe they would understand why some of us charge what we do, which is a fair rate for a good service.


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## Mark Oomkes (Dec 10, 2000)

FordFisherman;843289 said:


> There needs to be some sort of license or certification to separate experience, insurance amounts, some sort of accountability, like in other service fields.


Great idea, how many unlicensed drivers are out on the road? How many of them kill other drivers on a regular basis?

You've never had an unlicensed plumber or electrician do some 'side work' for you?

Licensing does NOTHING but give more money to the gov't.

The only systems that work--sort of--are the ones that are self-policing, such as accountants and lawyers.

On edit, just look at SIMA, they used to have a code of ethics, and that fell by the wayside. Tony can even attest to how someone can screw up the entire industry and not lose his CSP certification. (*NOT* referring to Tony)


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## Tony Bonventre (Feb 11, 2004)

I would not blame it all on one person or company, I will agree though you should not be able to exploit an industry and remain a member in good standing in the industries (Currently) highest associations, I can think of a few companies that have hurt this industry and one of them has a new CSP.

I agree with some sort of regulation just to level the playing field. Don't know yet what it is but I agree there should be some regulation.


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## FordFisherman (Dec 5, 2007)

Point taken. It would be effective in leveling the playing field in the bidding process. No certification-no bid accepted. No certification, you can't buy salt here etc. Just a thought.


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## big acres (Nov 8, 2007)

Mark Oomkes;843311 said:


> On edit, just look at SIMA, they used to have a code of ethics, and that fell by the wayside. Tony can even attest to how someone can screw up the entire industry and not lose his CSP certification. (*NOT* referring to Tony)


Not to keep stumping for the BBB, but it was created by businessmen over 100 years ago as a response to the government threatening to come in and regulate everything. They wanted to self police themselves to weed out the scofflaws. They even have free mediation if someone brings a complaint against you.

I have considered joining SIMA, but since the code of ethics and self-policing is not a big part of it, I will pass unitl it is. Their members should be called out when an obvious pattern of not paying is brought to their attention. Their should be a panel of peers such as non-biased contractors from various regions that reviews a complaint and issues a judgement. If the non-compliant party does not make good -they get the boot... and it is made public to all members.

So, yes... I think the fact that a professional organization who allows its logo to be used simply as a sales tool for some big service broker who will shaft another member makes it a non-professional organization is a big problem with the industry.

What would it take to start another orgaization with principles like this? One that would have a directory of service providers to both use and avoid that potential clients could be sent to?


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## Mark Oomkes (Dec 10, 2000)

Tony Bonventre;843343 said:


> I would not blame it all on one person or company


Never blamed it on one person or company, just used him as an example.

The thing that really pisses me off about JAA and SMG is I asked him about SPAA, the forerunner to SIMA. He had the balls to tell me--to my face--that he was one of the people that took SPAA down because the founder was doing it for his personal gain, by lining up contractors around the country that he could sub work to.

Sound familiar?

If you're wondering, SPAA stood for Snow Plowers Association of America. I was a member of that organization as well, because I thought it would be for the betterment of the industry.

This is where it gets interesting, guess who the founder of SPAA was?



FordFisherman;843348 said:


> Point taken. It would be effective in leveling the playing field in the bidding process. No certification-no bid accepted. No certification, you can't buy salt here etc. Just a thought.


Yup, great plan as well. If you're in the pesticide business, you will know this, but anyone with a dba (at least in MI) can buy pesticides, whether they have a business license or applicator's license or not.

Sorry, licensing and certification are not the answer.

PS You know who enforces the licensing for pesticide applicators in MI? The Dept of Ag, the same department that lost a good chunk of their funding so now the enforcers will only respond to complaints, no 'patrolling' for companies who are violating the regulations. They closed down their offices except in the capital, so you now have to go to the Extension Office to take the test. Oh, wait a minute, the funding for the Extension Services has been eliminated as of right now, so that won't work either.

The gov't is out of money and can't enforce the current laws, why would they be able to enforce new laws\licensing\certifications?

Ain't gonna happen.


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## Mark Oomkes (Dec 10, 2000)

big acres;843357 said:


> Not to keep stumping for the BBB, but it was created by businessmen over 100 years ago as a response to the government threatening to come in and regulate everything. They wanted to self police themselves to weed out the scofflaws. They even have free mediation if someone brings a complaint against you.
> 
> IMO, the BBB is a scam, why do I have to pay to be a member?
> 
> ...


Ummm, didn't the last thread you started with this idea get locked? :laughing::laughing::laughing:


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## Tony Bonventre (Feb 11, 2004)

There has to be an answer, there has to be a better way.


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## Brian Young (Aug 13, 2005)

In Pa there is a new law coming out that states you have to have a govt issued number, put it on your truck (even gives you the right size thats needed) or you cant do any work on someone's property. Its geared for construction, hardscaping and things that alter the property. Something like this would work but if no ones knows about it (customer's) then what good is it? I still think the best way is to actually take the time to sit down with customer's, get to know them a bit (not saying spend all day there) and sell your company and services. This at least beats the guy who hangs flyers out gets the address and never sees them. As far as commercial work.....have at it! It will never get better until the customer's can get over the "price factor". How many times do we hear and know of companies getting an account for 10-20% LESS than a year ago, and so on, and so on and doing a crap job. There also needs to be some sort of self-control and responsibility as an owner. How many morons in here buy some big stupid multi - thousand dollar piece of equipment just because "they just landed this big account" *and only use it 3 hrs a** night* then loose the contract the next year due to another idiot bidding it lower and he say "oh sh!t" now I have to lower my bid just to keep it busy to some degree. *We are our own worst enemy!* Instead of getting together somewhat and kinda "banding together to an extent" we cut our own legs out from each other. In a nutshell KNOW YOUR FRIGGIN BUSINESS...KNOW YOUR PROPER HOURLY RATE AND BID IT! the rest should take care of itself.


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## procut1 (Jan 21, 2004)

Hiya Tony....Long time no talk

I just talked to Mike about this the other day.

There is no fix.

Plain and simple. It is what it is and its not going to change. The same thing happened and is happening in the lawn business.

Years ago when I wanted to get into condo complexes for lawn maintenance it was next to impossible.

A handful larger companies, (not brickman types) but large local operators had the market sewn up.
Property managers were very picky about who they would ALLOW to bid. They really checked references, they investigated your ability and equipment, and most companies were shut out.

You HAD TO BE QUALIFIED to submit a bid on a large property like that.

So when the property managers were submitting those bids to the boards, the boards we;re reviewing 3 or 4 bids from equally qualified companies who were all somewhat close in price. 

Nowadays that has changed. Property managers are taking bids from anyone regardless of history or qualifications.

Where a complex may have paid $50k a year for their maintenance for years, now they are taking bids from "tommys lawn mowing" and seeing that he is willing to do the job for $25k. He can produce an insurance certificate and the board says "What the hell, lets try it" 

Whats the worst that can happen? Tommy does a lousy job or the grass gets tall.

The hard part is, more than likely Tommy will come in and do a good job. He will keep that contract for quite a while. Tommy will go many years before the cash flow catches up and he realizes hes actually losing money on that account.

We all like to think when we lose a job to "Tommy" that he will screw up and the customer will come crawling back to us.

Unfortunately Ive never seen that happen.

Tommy will likely do a good job.

If he does screw up.......The customer is now looking for another Tommy and has in their head that the bids should be around $25k, not the 50k that they paid for years.

Another Tommy will come along. And he will get the job. The customer is now accustomed to the job at half price and youre not getting it back to where it was.

The same thing is happening with snow.

The national companies have it figured out.

Without them, usually, a small time couple truck operation would never have the chance to go after a Walmart or Big Box store.

Many dont have the skill and ability to deal on that level, and many others just wouldnt be taken seriously due to their size.

You see posts everyday on here about "How do I get commercial accounts" and read about someone wanting to go after the Mall of America with a 20 year old pickup, no money in the bank, and a shovel.

Well enter NATIONAL MAINTENANCE.

They figured it out.

Companies like Mikes or other real operators cannot and willnot do the job for a price that USM can make a big profit while saving their customer their promised 30% in snow services.

So USM gets on the internet and goes after the guys who normally would never have a chance at that account and offers it to them.

Most of these guys have no experience in pricing an account like that, and MANY are so excited about the prospect of having the "Big Commercial Account" that the money is secondary to them.

I speak from experience. I was there too back in the day.

So National Maintenacnce dangles the carrot of the big commercial job in front of the starry eyed contractor who will try his damdest to pull it off.

Many will pull it off, regardless if they make or lose money.

To protect themselves, their contract, something i wouldnt use for toilet paper, is so 100% one sided that they have NO risk.

They have every clause you can think of that they can pull to not pay you. And you are left with no recourse.

In a contractor, sub-contractor relationship......The whole point is supposed to be equal risk.

The sub contractor works for less money in exchange for being paid on a schedule and not having to worry about selling the job or collecting on it.

The contractor gets his cut because he sells the job and he ABSORBS THE PAYMENT RISK.
He pays the subs on time whether or not he gets paid.

Thats what he does to make his money.

The nationals on the other hand do it backwards.

They put ALL the risk on the sub....And literally make "their cut" for doing nothing.

Their only job is to figure out ways to squeeze the guys doing the work to please the customer with huge savings and keep as much of the profit as possible.

The problem is, there are more guys wetting their pants to plow a Walmart, then there are companies that will turn it down.

National Maintenance has the formula down.

Get guys who will do the job at any price.
Lock in the profit
Squeeze them with clauses and games to increase that profit
Look like a hero to the customer
Move on to the next contractor.

Thats it...Plain and simple.

You just have to decide what area of the market you want to serve and gear your business to that.

I cant plow a walmart for $23k that last year was 70k.

So I just dont waste my time entertaining that. Someone else will get the job, and let them lose money or figure out how to make money.

Personally in all of my business services I seek out privately managed properties and almost always deal direct with owners.

They are my bread and butter....I offer a service they need, at a price they can manage and its a true relationship.

I cant run a business knowing no matter how good a job I do, Ill lose the job next year over $500.


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## procut1 (Jan 21, 2004)

Ill repeat my point.

The work WILL get done and will get done at the lowball price.

Ive underbid work before and lost my ass on a job. But I always provided the customer with the service they were expecting....It was my mistake not theirs.

I think we have all done that.....Got into a job you wish you never took in the first place, lose your shirt on it, but in the end you pull it off and its a learning experience.

Thats whats going to happen this year. Guys that have never seen a check for $25,000 in their life and think thats huge money to plow walmart.........They will pull that job off no matter what it costs.
More will pull it off than fail.

Thats all National Maintenance cares about......Pull it off....Make us look good....Then next year we;ll find someone else to do the same.

Its no secret.


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## Brian Young (Aug 13, 2005)

I agree with TONS of things you said Procut! And like I said in my post *WE ARE OUR OWN WORST ENEMY!* Thats it in a nutshell. I know exactly what he was talking about when it comes to condo boards asking how long in business, equipment etc. we just lost one to a guy who said he's "been in business for over 30 years" yeah right, funny no one around this city has ever heard of him. Basically lied his way into this place. We'll see how it goes...my thought is not very well, you can only fit so much equipment on a little 6x12 trailer. I'll be honest I got a little starry eyed when I was called to bid a big shopping plaza, the wheels were turning, I was thinking how nice it would be, bla, bla, bla. Then I actually sat down did the math over and over because this was the biggest thing we ever bid. My bid, along with the advice of 2 other companies came in at 91k for the first year and 95k for year #2....Ya know what it came in at? 18k Have fun!


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## Tony Bonventre (Feb 11, 2004)

Yea another group that knows it all the HOAs
They have the soccer mom the doctor who 
Used to shovel his driveway when he was 6
Then the no it all lawyer who wants you to
Sign a 25 page contract to mow 12 lawns and
24 shared driveways another group that could
Use some education.and by the way how have 
You been joe


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## snow patrol (Nov 30, 2001)

Procut, you coudn't have laid it out any clearer! I agree with every statement you made. We can complain all we want about the Nationals, but the truth is that everything you said happens almost to the same degree with many companies that hire out their services in house. I deal with a large (national) storage type company and provide both snow and landscape services. I used to think that if I provide a quality and reliable service that it would open up the doors to more business. The reality of it however is that the DM's who I deal with and see the properties are always more than pleased with the service we provide and have on a number of occasions even stated so in email communications. However, the DM's have no say in who is awarded the contract. That lays with the regional managers who rarely visit the locations and have no contact with the vendors ( in this case me). All they look at is the spreadsheet with the bid numbers plugged in. And as always, the low bid win. Do they consider that the contractor does not service the account according to the very specs they (the storage company) provided? NO! Do they consider that the same contractor that came in with the low bid last winter did not show up to service a number of property until 1 days after the snow stopped falling on a few occations, and on one occasion that I am aware of 2 days later? NO! Do they consider that the rock salt that is supposed to be applied at every plowing is often not? NO! Same thing goes for the summer services. Sometimes even when you deal directly with the customer, you aren't dealing with the decision maker. And whats worse is the decision maker doesn't seem to value the input of the people he/she oversees. How frustrating!


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## theplowmeister (Nov 14, 2006)

Me... I would change the freezing point of water from 32 degrees to 42


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## Tony Bonventre (Feb 11, 2004)

Now your thinking


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## big acres (Nov 8, 2007)

Mark, I see your point about the BBB, but as a non-profit they have to cover operating expenses somehow. As a sales guy, I have seen ROI many times over for the dues we pay. I get emailed every time someone checks us out and have gotten them right after submitting a proposal.

Second point... Yes, that last thread did get locked, but this time I didn't even NOT type snowplowers union -oops... shouldn't have said that.

Third point, I am indeed a man. how's the weather in Miami today?


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## big acres (Nov 8, 2007)

Procut -man, you are the optimist, lol, but a realist for sure.

Our market here is tougher on the nationals than many. Some have come in big and pulled out of town a fews years later.

The "Tommys" are getting a shot now, but even if they do good work in the field, managers won't keep them unless they reduce complaint calls. If the residents see a better lawn over the fence, up goes the complaint calls. If Tommy is too busy working 14 hour days and cannot address each complaint immediately, people think the manager is a slacker. Managers don't like that much. They do have influence over a board and will pursuade them to go with a higher price if it makes their job many times easier... self interest is big.

I hold onto hope that the nationals will run enough guys through the mill that they will reach critical mass, and suddenly run into a shortage of suckers. Many say the commercial market is going to crash and make the residential foreclsures look like a bump in the road. The Lowe's by my house is a ghost town every time I am in there. maybe when some national retailers go bust, the national providers will go with them.


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## RLM (Jan 12, 2006)

For us this season biggest issuue is pricing & Procut hit it pretty well head on. We had two properties (HOA) that we have had for 10 seasons now, my price was consistant (about same as they had been paying for 10 years)with 3 other bidders (4 bids), 5th bid was 30% lower. Often you'll here toss the highest & lowest, what remains are you true bids, not the case here. They (HOA board) went with the 5th bidder, PM didn't even know how he's going to do it for that price. As much as I'd like to be pissed, I can't blame them for looking to save money, there hurting just like everybody else, & if other memers of the association found out they could of saved X # of dollars they might be pissed as well. 
As Procut said it has gone on in lawn work for years, the difference is with the snow work, if we fall short you have major liability issues, & people need to get to work (if a property gets snow bound they can't). I had a awesome cover letter to this board, pointing out in 10 years we never left the stuck, etc. Reminding them that the season before we took over they were snowbound for 3 days waiting for a loader to dig them out. I think the problem with the HOA market, is everyone comes in for a year or 2 (board members), then tires of it, you can't develop that relationship thats needed. Property managers while they have some say, they don't have the final say in this case, unfortunaly for them they have to deal with complaints associated with the boards poor decisions.
We have to educate our clients, find clients that are worth the time effort to educated. It is an investment, it takes time,& energy. If you spend the time to educated a HOA board, when it comes up for bid how many of those board members will still be there ?, as upposed to educating a business owner, or manager of a large corp. I'm thinking of joining a couple organizations (local chambers of commerce (2), & possibly BOMA) chaning things up a bit. Hoping to find those clients. I'm trying to figue it out in my business.


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## buckwheat_la (Oct 11, 2009)

i agree, with all you guys, and it would be great if something could be done, but unfortunately i highly doubt it well, the one thing that we really need is better control of our contracts, USM is going to fry over their contract with walmart, eventually noone is going to work for this company, even as a national company it IS possible to alienate (get a bad enough rep) that you can't find people to work for them, i have seen it in canada, where a company was so mismanaged that they lost all their contracts. Anyways the other issue i have is liability, (at least in canada) the act of God clause doesn't work here, and insurance companies just pay out, then increase rates here, i know a company that sued THEIR insurance company for paying out a slip and fall, WHY you ask, because the person who slipped and fell, fell on the roadway, which this company wasn't even contracted to plow, they were only doing the walkways!!!, there is lots wrong with your industry right now, but the best thing for our industry would be for the economy to recover, then some of these lowballers well go away, larger corporations would quit squeezing every penny out of us contractors, etc. It is so hard to be a honest buisnessman these days.


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## buckwheat_la (Oct 11, 2009)

we want to fix the industry, lets start by dealing with USM, every snow contractor that agrees with this post should be phoning WM (even if you don't plow a WM) and complaining about USM buisness practices and the lies they are spreading, lets show we can support the industry and our fellow contractors


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## terrapro (Oct 21, 2006)

Management companies, I would do away with them completely. When dealing with major liabilities such as we do you can not have an office in Florida overseeing what happens in Michigan.


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## Mark Oomkes (Dec 10, 2000)

Mark Oomkes;843364 said:


> Sound familiar?
> 
> If you're wondering, SPAA stood for Snow Plowers Association of America. I was a member of that organization as well, because I thought it would be for the betterment of the industry.
> 
> This is where it gets interesting, guess who the founder of SPAA was?


You guys are no fun at all. 

Fine, I know many of us have heard of the wonderful reputation of Dentco or whatever it's called now, but he's the guy that started this concept.

http://findarticles.com/p/articles/mi_qa5316/is_200205/ai_n21312881/


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## procut1 (Jan 21, 2004)

Many people hate my posts because I seem so negative on here and lawnsite.

Im not being negative. Im being real.

As businessmen the first thing we have to do is to be honest with ourselves.
We have to accept what we can change and what we cant.

How many times to we lose an account and the first thing we do is reassure ourselves "They will hate the other guy and be back"?

It makes us feel good....It still makes me feel better.

But whats the reality? They dont come back.....Of course there are exceptions you can list, but overall, no, they dont come back.

When we lose that $50,000 job to the lowballer at $25,000. We say, "He will screw up and we;ll get the job back"

Sure....Maybe we can get the job back.......But not for 50k.

Every one of us on this board can give the finger to USM and other nationals and we wont account for 1/10 of 1% of the guys who they can choose from.

Walmart is not as big as they are because theyre stupid. USM as much as we complain about them, HAD to PROVE to Walmart that they have the ability to pull this off.

USM and other nationals are growing. We see the trend going that way in the industry.

Look at guys like Lipinski, Arlington Lawncare, Campanelli and such.... Theyre contractors....But theyre also now "national management" companies.

Now there is a ton of competition in that market too. So now the big box stores have 10 different Nationals, competing for their contracts, all making the promise of saving the customer money.

Then they have to find guys to do the work. And still make money off it.

So as the "end contractors" we are never going to see prices go up......The prices are already set and we dont have control over it.

USM will have the contract cheaper than WM in house.....Another national will take it from USM offering to do it cheaper than USM.....And down the line it will go.

A company like Walmart is in the business of selling....Theyre not in the property management business.....They love outsourcing......Theyre not going to go back to individual contractors.

They may change nationals many times, but as contractors, we;re now permanently out of the game.

As a contractor we have a choice to make.......Either we figure a way to gear our business to provide the service at THEIR price and still profit.......

Or we move on to other work....

But we shouldnt spend any time thinking that the market is "going to come back"

Its not.

We have to figure out how to be smarter, work more efficient, and find the work we can profit from.


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## Bajak (Nov 12, 2008)

JohnnyRoyale;843269 said:


> Great question Tony.
> 
> I think I'll start with liablilty issues.


That is where I would start too. I have life/disability insurance and in the fine print I am not covered for injury or death while engaged in certain activities such as scuba diving, sky diving, stunt car driving, racing, war, extreme sports,etc. etc..... Basically says that if I know the activity I am engaged in is "high risk" then I/my family should know better and we essentially waive the right to make any claim.

Now, more people are injured or killed due to slip and fall in their shower, choking on food, allergic reactions and the like than the percentage of people killed bungee jumping.

Weather is, as insurance companies call it, an "Act of God". When ever there is a storm it is reported on by the media, they tell the public to not go out unless it is absolutely necessary, give the plow operators time to get caught up, we are all informed. I know the risks of leaving the safety of my home during snow or ice events. When I leave during a storm or shortly thereafter to go to work I know there is an increased risk of getting hurt in my action and so should my customer or employer. Why are people so inclined to pick up a bag of milk or bag of chips during a snow storm? It's not like It's heart medication or insulin.

Fortunately I am in an area where slip and fall law suits are few and far between during the winter but unfortunately I am here in a time where they are not uncommon.

In the mean time, I can't wait for the "Extreme snow shoveling season" to begin. Yes, one season closer to my lifetime of disability.:realmad:


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## Bajak (Nov 12, 2008)

As for the USM's and national companies. It's each and every business individuals choice. If you don't like them don't entertain them in anyway, shape or form. It's not like they can have a piece of every account. If they did we would call them "the government".


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## LoneCowboy (Jan 2, 2007)

procut1;844655 said:


> M
> 
> As a contractor we have a choice to make.......Either we figure a way to gear our business to provide the service at THEIR price and still profit.......
> 
> ...


well said
Finally somebody notices the elephant in the living room.


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## Danscapes (Jan 12, 2008)

Procut, your my hero!:salute:


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## Ramairfreak98ss (Aug 17, 2005)

JohnnyRoyale;843288 said:


> My frustations sometimes include;
> 
> Liabilty Issues.
> Insurance Costs.
> ...


yeah thats most of it.

A. liaiblity risks... since were open to anything and everyone elses faults :/
B. salt costs rises over a single season
C. lowballers...

We've gotten more commercial accounts based on the work done at other accounts and references than all advertising, promoting " in store solicitation" and phone calls combined.

STILL, we get outbid BAD sometimes by guys that just dont show up or hardly salt etc.

Then you get the better companies that claim theyre still picking us even though our bid is double what a couple other bids were because they felt that if ours was $1000 per push and others are $550... they beleive honestly that we will do more/better quality work for the 1k than them having to worry about ashats not doing a good job for $550.


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## kcress31 (Sep 20, 2009)

What we need to do is form an association or buying group of some sort where we pay a small membership fee which is reimbursed through such things as volume rebates for us supporting a certain fuel company or heavy equipment company, salt supplier, parts, etc. I worked in electronics retail for about 10 years while helping my father run his contracting company, which I help him run full time now. While running my independent electronics store for me to compete with the wallmarts and the future shops, canadian tire, I had to Join a buying group which gave me a host of benefits and discounts on everything from banking to financing, fuel and rebates on stock purchases. For example one company would give you a 4 % rebate for buying over 100 k in one year of their product and all the way up to 10% for 1 million. The buying group initiall had a small membership fee and than they started to waive it. I guess the group eventually had enough money coming in from the manufacturers they dealt with on behalf of us. As an independent business owner you have to differentiate yourself from the big box stores and or the lowballers. I think it is possible to form something but where to start.

Keith


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## Ramairfreak98ss (Aug 17, 2005)

well said procuts... ive had my fair share of *****ing on here about some of the companies.. *****ing about their practices, professionalism or lack thereof.., procedures and overall ability to do a good job....

I've always been pushing into the bigger jobs, always wanted a major site like a mall, industrial complex etc. But in reality, these are ALL prime sites for brickmans and lipinskis around here and they lowball the [email protected]#$ out of the prices. 

They make profit margins work mid way through the term by exploiting the little man, us. 

They find any way by contractual possibilities to not pay 100% and that adds to their margins. 
When you make millions per year, you can keep things close, the rest of us need some working room to ensure we wont go under with an account because we bid so low that its not profitable. 

I have to say though, tha we did aquire two sites from brickmans and one from lipinskis... well they had them last season, and now we have them because both companies @#$#@% us over last year several ways.. Ive turned the internet BSing and constant gripes into real positive outcome for us this year. Both accounts were not thrilled with the service or price from either company. The other ones didnt like the sub contracting tactics lipinskis used.... go figure right!

These will be awesome accounts for us and profitable. These large companies WILL lose many smaller accounts back to us "middle/little" guys eventually for bs practices, poor service and lowballing estimates. Sure everyone wants the cheap price, but they also want a half descent job. The accounts that are controlled corporately have no ties with local companies to us such as lipinskis.

I'd probably make a killing in contracts for NEXT year just to pay a couple guys to drive around in the winter following lipinski trucks and go after all of their accounts under 20k per season... over this amount, they have lowballed malls and such large accounts so bad that id want 60k for a place they do for 25k :/ just not worth it.


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## Ramairfreak98ss (Aug 17, 2005)

FordFisherman;843289 said:


> There needs to be some sort of license or certification to separate experience, insurance amounts, some sort of accountability, like in other service fields.


what like SIMA haha,  Lipinskis and brickmans have that


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## Mark Oomkes (Dec 10, 2000)

kcress31;844858 said:


> What we need to do is form an association or buying group of some sort where we pay a small membership fee which is reimbursed through such things as volume rebates for us supporting a certain fuel company or heavy equipment company, salt supplier, parts, etc. I worked in electronics retail for about 10 years while helping my father run his contracting company, which I help him run full time now. While running my independent electronics store for me to compete with the wallmarts and the future shops, canadian tire, I had to Join a buying group which gave me a host of benefits and discounts on everything from banking to financing, fuel and rebates on stock purchases. For example one company would give you a 4 % rebate for buying over 100 k in one year of their product and all the way up to 10% for 1 million. The buying group initiall had a small membership fee and than they started to waive it. I guess the group eventually had enough money coming in from the manufacturers they dealt with on behalf of us. As an independent business owner you have to differentiate yourself from the big box stores and or the lowballers. I think it is possible to form something but where to start.
> 
> Keith


Sorry, that's been tried before as well.

Do a search for Symbiot. Course, maybe if they had done their due diligence before getting suckered into bailing out SMG, maybe they'd be a force to reckon with.


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## Mark Oomkes (Dec 10, 2000)

procut1;844655 said:


> Many people hate my posts because I seem so negative on here and lawnsite.
> 
> Im not being negative. Im being real.
> 
> ...





LoneCowboy;844762 said:


> well said
> Finally somebody notices the elephant in the living room.


Hey, what am I? Chopped liver? 

I don't hate you or your posts procut.

Sometimes the truth hurts. I've been saying the same thing about this WM\USM thing since it started, and not many want to listen.

Now we're at the point that we have an average of 1 new WM\USM thread a day thinking they're telling us something that has been discussed for close to a month now.


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## big acres (Nov 8, 2007)

TonyB - This is one of the most insightful threads I've seen this year... no offense to chopped liver types.

Procut -Never said you were negative, just a realist... very well thought out analysis. I too think the ship has sailed for the guy performing the work also holding the contract with a larger national chain.

Mark -Did a quick search for SYMBIOT and did not find out the details on how they were similar to the buying club mentioned above?

I floated an idea on another thread about a year ago... not the infamous locked thread. It was for a "snow-plowers co-op". If you are familiar with the co-op principles, how would you implement? ... this could be interesting.


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## Mark Oomkes (Dec 10, 2000)

big acres;845643 said:


> TonyB - This is one of the most insightful threads I've seen this year... no offense to chopped liver types.
> 
> 
> 
> ...


I agree, excellent thread.


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## procut1 (Jan 21, 2004)

Symbiot was/ or I think still is a national maintenance company like USM.

They were a little different in where in order to work for them you had to pay a "membership fee" which I think was $750.

That allowed you to bid on their lowball work.

It also opened you up for discounts on seldom used products from "outskirt" companies.


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## procut1 (Jan 21, 2004)

Example...Look at this list Mark just posted.

Meyer plows......Who uses meyer plows? I didnt think they were still around. Havent seen one in years

Sunbelt rentals....Arent they just down south where is DOESNT SNOW?

Dont see anything on that list for stuff we as contractors buy in bulk and NEED buying power.

How about....Um.....SALT?
Maybe SIDEWALK DEICER?

Maybe BRAND NAME equipment?

Something?


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## big acres (Nov 8, 2007)

procut1;845680 said:


> They were a little different in where in order to work for them you had to pay a "membership fee" which I think was $750.
> QUOTE]
> 
> Sounds like Amway or any one of those pyramid deals when your told you'll make a bunch of money, but you have to pay the membership fee or buy some "inventory:
> ...


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## big acres (Nov 8, 2007)

I am amazed that a thread about $10 driveways can generate so many replies and only a few guys contribute to deeper discussions that don't necessarily revolve solely around walmart... go figure.


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## procut1 (Jan 21, 2004)

This is the commercial version of $10 driveways.


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## Mark Oomkes (Dec 10, 2000)

big acres;845759 said:


> I am amazed that a thread about $10 driveways can generate so many replies and *only a few guys contribute to deeper discussions *that don't necessarily revolve solely around walmart... go figure.


I think that right there tells you something BA. (I'll be Murdoch :laughing

I know you know what I am saying.


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## LoneCowboy (Jan 2, 2007)

big acres;845759 said:


> I am amazed that a thread about $10 driveways can generate so many replies and only a few guys contribute to deeper discussions that don't necessarily revolve solely around walmart... go figure.


People would rather ***** and complain than figure out what to do different


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## big acres (Nov 8, 2007)

Mark Oomkes;845770 said:


> I think that right there tells you something BA. (I'll be Murdoch :laughing
> 
> I know you know what I am saying.


I lived for the A Team is a kid... actually found it on netflix and watched an episode. Tried to recapture the moment... didn't happen though. It just seemed more real as a ten-year old.

So, any input on the co-op principle? I think I'm still on topic here?


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## Mark Oomkes (Dec 10, 2000)

big acres;845789 said:


> I lived for the A Team is a kid... actually found it on netflix and watched an episode. Tried to recapture the moment... didn't happen though. It just seemed more real as a ten-year old.
> 
> So, any input on the co-op principle? I think I'm still on topic here?


It's Friday, screw work. :laughing:

You think A-Team is bad acting now that you're an adult? Go back to The Lone Ranger. My wife got me a DVD and wow, what a disappointment. My kids love it, but I wish I remembered it from when I was a kid.

Co-op, schmo-op.


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## buckwheat_la (Oct 11, 2009)

lol, ok i well put my 2 cents in on this thread too, (the $10 residence driveway is getting a little childish) i only have a little to contribute because things are a lot different where i am. A good example is that one of the management companies tried the crappy contract and paying at the end of the season etc here, and you know what happened, all the contractors phoned eachother, and it didn't get bid on, they didn't get one bid.

i think that one of the biggest problems has to do with us contractors ourselves, and the economy, the fact is there aren't as many jobs out there (bankruptcy's etc) and everyone is trying to reduce costs. i think we all need to come to the conclussion that we are all scalling back this year, with people unemployeed they are going to go anywhere and do anything to make money to pay for their homes, put food on the table ,etc. so what we really need to do is find ways to support our economy, the more money we put back into your communities the more likely people well find jobs that don't include getting into the snow removal buisness. Of course some people are still going to go into plowing buisness anyways, but that is the start.


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## big acres (Nov 8, 2007)

buckwheat_la;845794 said:


> A good example is that one of the management companies tried the crappy contract and paying at the end of the season etc here, and you know what happened, all the contractors phoned eachother, and it didn't get bid on, they didn't get one bid.QUOTE]
> 
> I like this... just wouldn't work in a major metro area.
> 
> Let's hijack this thread and change it from "what would you change", "to how would you change it"?


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## buckwheat_la (Oct 11, 2009)

this is why i started my post with "i only have little to contribute..." the city i live in only has 90 000 in it. it is too bad each community couldn't band together, but then they call it price fixing, which is funny when to related to another thread about fuel, because the fuel industry has been doing this for years. I think the important thing to remember here is that any companies that are lowballing or starting up and not being responsible are going to go down in the next year or two anyways, another way to look at this is when companies like USM are going to hire crappy contractors, then those contractors are going to go out of buisness, then USM well have to come back to the reputable contractors, AND they well have to bring up their prices to get those contractors back, the truely sad part has to do with the fact that USM is going to do damage now, to all those good contractors, welcome to a capitalist society, and we in turn are going to stick it hard to USM when they come crawling back. I am not trying to make this a USM thread, it goes for almost every industry right now, hire cheap, cheaper products/services unhappy customers because of quality (or in USM's case the amount of lawsuits they are going to incure), industry raises standards incures more costs etc.


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## procut1 (Jan 21, 2004)

SOME PEOPLE DONT SEEM TO UNDERSTAND THIS!!!!!!

There IS NO FIXING THIS.

Its NOT BROKEN.

Whats occurring is simple, basic, supply and demand 101.

There are more people who want to plow walmart than there are walmarts. SIMPLE

That puts walmart in control....You want to plow walmart....You do it for their price....

Some will tell walmart to cram it......But enough wont.....Walmart will get done.....

If walmart had a problem finding contractors then they would have to raise the price they are willing to pay.....

LOOK AT THE ECONOMY..........ITS A BUYERS MARKET!!!!!!!!!!!!

Unemployment is through the roof, the economy is being held up on a mirage.....

Guys who cant find jobs are giving a go at their own business. Tons of new businesses are starting right now.....More than I have ever seen......Right at the time where customers are not buying...

So now you have customers who are trying to save as much as they can, established contractors making concessions to hold onto jobs, and a FLOOD of new guys with zero work looking for anything.

A guy thats unemployed, anything that covers the gas and some bills is more money than nothing.

We chose a profession, like the lawn business, that ALMOST ANYONE can do.

Yes, we say we plow better, and are more dependable, and so on........But the reality is.......It doesnt take a rocket scientist to plow snow and show up.....

Like I say over at lawnsite and get flamed.....

REALITY PEOPLE!!!!!!

WHY DO WE PLOW SNOW???

Do we LOVE 30 hour days in a truck, bad weather, freezing nuts off, complaining customers, breakdowns, fighting traffic, chasing money, and always being the bad guy???

I love plowing snow.......I hate the PLOWING BUSINESS.

WHY DO WE DO IT????? HONESTLY?????

Because historically its one of the easiest things we can do to make the most amount of money with our time.......

And you dont have to argue the "easy" part......Yes its "hard work" but Im talking a different kind of easy.

Please dont bother with the exceptions.....I am generalizing here......

Most people who went on to higher education, and got trained in a specific area, that required a lot of time and work.....are not plowing snow or cutting grass...

For years....These services business were what we like to think of as the American dream

If you worked hard and did good work, you would succeed....Some more than others but the principle worked....Smarter, more educated guys did better, but even "regular joes" could make a very nice living and support a family with some hard work.

THATS WHY WE'RE IN THIS BUSINESS!!!!!!

Deny it all you want......But if you had the education and qualifications to do something that was less backbreaking and stressful and more money than this you would be doing it.
ME TOO!!

We have SIMA, and plowsite and other groups to try and raise the respect level of our chosen profession.....

Thats all fine and dandy and a great idea..........IF THE CUSTOMER THOUGHT LIKE WE DO.

We can be as professional as anyone.........BUT THE CUSTOMER SEES US AS DOING SOMETHING THEY CAN DO THEMSELVES BUT DONT WANT TO.

Whether you have 1 truck or 10 you will be compared to the kid down the street.

ITS SUCKS BUT ITS A FACT.

No matter what we do for a presentation........the fact is the customer does NOT LOOK AT US AS HIGHLY TRAINED PROFESSIONALS.........Regardless of our qualifications.

We;re not put on the level of plumbers, electricians, skilled trades, and so on.
To the customers we;re on the level of janitors and floor cleaners.

THATS THE FACTS.....I DONT AGREE WITH IT......BUT THATS WHAT IT IS....

A licensed electrical contractor is not going to lose the walmart contract to a guy with a pair of wire cutters and a roll of tape calling himself an electrician. In that area, you bet your ass walmart wants a professional, established, qualified company and they care more about that then lowball prices.

EVEN USM has pretty strict requirements for electricians to work for them. And they dont lowball that business.

SO WHY IS IT that a well established, professional operation can lose a walmart contract or any contract to a lowballer with a pickup and a shovel?????

BECAUSE THE CUSTOMER SEES NO DIFFERENCE IN THE TWO.......No matter what presentation you do......

They sure see the difference on the surface........And if you were talking a few hundred dollar difference, sure.........But they dont see enough of a difference to pay 30%+ more...

We can sit here and talk about "fixing the industry" all we want......all participate in a group hug....

There is no fixing it because its not broken.

Its operating exactly how basic rules of business operate....Supply and demand..

Want to make more money? Find something to do that not everyone can do.

Pist that electricians can charge $70 an hour but you cant get $40 an hour cutting grass???

Well, go be an electrician.....You can charge that for something that the customer wont do themselves....They dont want to burn their house down.......

But they can shovel their own driveway or mow their own lawn....

And if their time isnt worth $50 an hour......They dont feel yours is


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## buckwheat_la (Oct 11, 2009)

Honest words Procut, i think your words and mine are on the same page, however, i would put this in, just because it is happening, doesn't make it right, and the fact USM and others are taking advantage of it, doesn't make it right either, so when people slip and fall on purpose in front of Walmart, or pad their hours on their jobs, well the way i see it, USM is doing the same thing, and WM is allowing it.


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## procut1 (Jan 21, 2004)

I agree....Its not right....And it sucks...

If pisses me off that the basic fundamentals of business do not always apply.

Well......Actually they do.....In the long run.....

But this is why most small businesses fail.

You would THINK if you do a better job than your competition you should get paid more.
You would THINK if you bend over backwards and take care of your customer they will be loyal.
You would THINK that all those sleepless nights you are worrying about their parking lot, all the preparing you do, all the assbreaking work, so they can be open for business, would show.
You would THINK the customer would recognize that and appreciate it.
You would THINK after many years servicing a property, knowing it inside and out, knowing every little detail, and doing it great.....that the customer would want to stick with you instead of training a new guy
You would THINK when someone offers to do the job at half your price, the customer would laugh at them.
You would THINK if someone was just a little less than you, the customer would say "No thanks Im not going to take a chance for a few bucks"

You would think, if you do everything right, give the customer 100%, that you would be entitled to fair honest pay which even at "pre-national" rates was not getting rich.

But then you find out that none of that matters.

You do lose a job for a few bucks
You do lose a job to an obvious incapable hack
You dont get the job back when that hack screws up
No matter what the customer has a complaint
No matter how good a job you do, they will always think theyre paying you too much
Contractors will work for whatever USM will pay them
Customers WILL accept far less of a job, if they are saving a lot of money
Customers ARE NOT AS PICKY with the guy doing the sh!tty job as they were with you
The guy you think is going to lose the contract keeps it for years
The customer calls you back after he screws up and asks you to take the job back.....at HIS price

And so on.

This is all reality.

Reality goes against every principle that makes sense to us.

We do the same as contractors.

Im loyal to my salt supplier.
He charges a reasonable price, is always on-time and great to deal with. 

If someone comes in $20 a ton cheaper.......Sorry....Im switching.
$5 a ton? no $20....yep

Im loyal to my local auto parts store.......For the most part.
$10 difference in a part....Ill buy the local guy
$50 difference for the same part....Im at autozone.....sorry

When I was buying mowers....I always was loyal to my local dealer even though the service sucked, parts were never in stock and so on....I still always went there....Spent prolly 20g a year there...

Went to buy 2 new mowers....Finally checked around other places.

Found out on 2 mowers I could save almost $2000 a piece going 5 hours away.
ROAD TRIP!!!!!

Same dam mowers and my local dealer who "couldnt budge on the price" wanted $4000 extra.

So I see it from both sides.

The local dealer wasnt happy I bought the machines out of state. If there was a few hundred dollar difference, I would have stayed local......But 4 grand?? Come on....

Snow is no different. Unfortunately many times, when someone takes a job from us for a big discount, they do an acceptable job.....So the customer gets the same thing for a lower price, just like my mowers.

Salt supply......For the most part, salt is salt. Yes I like some companies salt better, and have had bad loads before, but usually theyre pretty similar.

If my regular guy is dependable and supplies me salt. 

And I switch for a much lower price......And the new guy is dependable.....

How do I justify paying more for the same dam thing?

Now if the new guy left me stranded with no salt or I had problems.....I would go hunting for another salt supplier.....Before I went back to the more expensive guy, I would look for someone around the new price I was paying first...

If I found someone new that would deliver for my new price, I might go back to the old guy and offer him the business if he matched the price, since I knew his dependability.

But it would take a lot of salt guys leaving me stranded before I would make that price jump to the old guy again..


Thats why when you lose that lawn account to a guy half price, you drive by and say "theyre gonna fire his ass for the job hes doing" the place looks like crap.

You bid it again next year figuring they would LOVE to have you back to straighten the place up.
All they do is bash the guy that did it last year.
Then the bids come in.......When youre at $30,000 and he's at $19,000......All of a sudden his work isnt soooo bad.


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## big acres (Nov 8, 2007)

Procut -I think you took an excerpt from the serenetity prayer early on here when you said "Accept the things you cannot change".

I do agree with most of what your saying, but I do see this as more cyclical than an end of the world as we know it.

It is true that big business types have spotted the opportunity to take a largely fragmented industry of pizzants like all of us and have capitalized on the fact that they can peddle us in bulk like trinkets at a flea market from an office somewhere.

Supply and demand can be a funny thing. Low demand cannot support a chain of 100,000 SF hardware stores forever, no matter how cheap they've sourced their wares.

Of the many entreprenuers you mentioned, some will make it and become a future customer to some local vendor like us and show that modest degree of loyalty you do.

They may even compete against some of those big box stores and hold onto that loyalty for some time before they become jaded by accountants and shareholders.

The OP posted "What would you change?"... and I thought "How would you change it?"

The co-op idea was more of a mental excercise for discussion's sake -not a call to arms, though someone could run with it the way the Nationals have with their idea that was once in it's infancy.

Personally, myself and the guys I work with will do what you will probably do...

Look for ways to become more efficient to compete.

Look for add-on services that complement your offering.

Re-evaluate this new market and hone your sales to it

Protect your core customers from pressure from above and below.

Continue to send the professional message... perservere. Once burned, twice shy as they say. You may lose a good customer, but that doesn't mean you lost them forever.

It is true that when your 50k price is dumped for 25k, it won't return immediately to 50k, but there will always be people who will pay more for true professionalism... no matter how meanial the task. I will find them.


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## LoneCowboy (Jan 2, 2007)

The problem with the industry is just like carpentry or lawn care and it's classic economics.

Low or almost no barriers to entry.
In lawn care, it's two guys in a truck.
In snow removal it's worse, it's one guy in a truck with a plow.

Less than $10,000 in "entry fees" and you're in business.

It's a Wal Mart Nation (and I posted this last year and except for chopped liver, everyone said oh no, they'll all pay for service. And guess what? 1 year later who was right on that one?). In America today (and Canada too), price matters more than service or quality for the majority of people. Snow removal isn't immune to that.

Plowing is overhead for a property owner. If you really believe anything else than you don't really understand your customer. 
And anything they can do to reduce overhead falls straight to their bottom line.

So, how do you compete?

You have to either be a niche player or get bigger or get more efficient.

There are some places that will pay for service (although fewer than there were before) and those are possible to go after. But there are a limited amount of those, not everyone can market to those. 
There are places that simply need 24/7 access and will pay for it (hospitals are a perfect example), but while the money amount is large, is it really profitable? Perhaps, but you have high costs there too and there are people competing for the contract so cost will come down.
You have to get more efficient. Perfect example is straight blade vs adding wings. Wings are easily 30% quicker than a same sized straight blade (and a V blade even more so). The lot is worth what the lot is worth. If I can do it 30% quicker for the same money or even 10% less. Guess what? I made more money than you in the same time frame with less costs (time on truck and labor). The straight blade person can't match that price because they aren't efficient enough. It's called capitalism for a reason, spending capital gains you productivity while prices come down. The company with capital wins. Home Depot vs the little hardware store, the little guy doesn't have the capital to compete on that scale (and get the same pricing power). They can get more efficient to a point (cut labor hours) but basically they either reinvent themselves as a niche player (great service, Ace H/W) or go out of business. 
You get bigger. This too requires capital, but your cost per hour goes down. 1 guy in a truck can do (for example) 1 acre per hour. 1 guy in a loader with a 14' pusher can probably do 3 to 5 acres an hour (I'm guessing, correct me on the loader numbers). Yes, the loader costs twice as much, but it's 3 to 4 times as efficient. A big V-box salt/sander is a heck of a lot quicker than a small spreader on the back of the truck with bags. A company with bigger more efficient equipment can do a lot at a price that the little guy can't make money at, but the big company will make fine money. Yes, you have more trucks, people, insurance, but your overhead stays approximately the same. Advertising costs about the same, the building costs the same, phone costs approximately the same. You get better pricing on bulk materials. You can cut your maintenance costs by bringing repair work in house when there's enough work to keep a mechanic busy. It's $80+/hour for a shop to repair trucks, a mechanic with tools/shop/etc is probably $30 to $40/hour total costs. 
Having the ready capital to have a large group of subcontractors can allow you to grow and make both of you happy. But again, it takes capital to pay them that day while you wait 30+ days for your money. It's not called laborism (not yet anyway), it's called capitalism, you make money off your capital. 
 You differentiate yourself with being able to do things nobody else can do. Maybe you can do snow removal with dump trucks while the other guys can't. Again with the big loader example, you can keep a place clear for less money. You can handle the big storms when people really need snow removal. Every Joe Blow can remove 2 to 6" of snow. It takes a professional with the right equipment to remove 2 feet of snow in a timely manner. The guy with the F150 and a 7' blade isn't going to be able to move 2' of heavy spring snow. 

You have to decide how you are going to create a moat around your business, but prices are still coming down while taxes and expenses are going up. So you need to figure out how to do it better and more importantly cheaper.

Now, the Wal Mart can't be done by a guy in a truck (Ok,some wal marts can, but the super wal marts can't), so on a big scale most of those guys are priced out. The little guy ISN'T cheaper in this case. Bigger equipment can work faster and more efficiently for less per square foot than a regular guy in a truck can do it. You might think they are a lowballer, they figure they are making money. You need to separate those out from the real lowballers. They simply can't be your competition, but you better make sure that they are really a true lowballer. I see a lot of times on bidding/estimating that are simply outrageous. I KNOW I could do it in 1/2 or 1/3 of the time and still make money. Someone else is going to figure that out too.

Are you fully legal? Then advertise that fact, educate your customers, and more importantly continue building moats. The perfect example is someone hiring somebody to work on their house who doesn't have insurance. Homeowners insurance specifically excludes coverage of contractors. That contractor gets hurt on your property, guess who's responsible? You, personally, your insurance will deny the claim. Do many homeowners know this? Not hardly, so educate them. Create a barrier to entry. I know some states collect taxes on services (NY I think?) Do you really think Joe's snowplowing is paying taxes?

The laws are DESIGNED to protect big business's and keep competition out (who do you think has the money to lobby the legislature? it ain't the little guy). Use it to your advantage. Either knock them out, or get their costs on a level playing field.

No matter what, in the end, you simply don't win every bid. Your costs are what they are and there's simply a point where it's not worth doing it and the biggest lessons you learn in business is first that cash is king (capital again) and second that not every customer is worth having.


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## ford550 (Nov 9, 2008)

Pro-Cut/LoneCowboy

You have said what I have been thinking and saying for the 20+ years I have been doing this. There is nothing broken. It is purley business physics. It's not right, but lets call a horse a horse and not a Unicorn. These other guys think that these companies will come crawling back and pay higher contracts to us "reputable" contractors are living in the clouds. They will NOT be coming back because they don't have too. Every year there are plenty of knuckle heads trying to get into the business and will work for nothing. If the "low baller" is charging $40/hour and only making $10-$15 for his wage, that is good money for him. More than likely his other job was paying the same, so he is as happy as a pig in sh*t. Just look at the type of person that makes up the Unemployment Rate, it's basic economics. Like it was said before, the average person (most of them) has no value on what we do and NEVER will. Nice job guys. Reality sucks for most on this site. :salute:


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## LoneCowboy (Jan 2, 2007)

One more point I wanted to make is that you have to sell yourself and explain how you are cheaper than the other guy.

I put a bid in on a place the other day, I may or may not get it. (but you gotta bid them to get them), but they have been doing it in house with little tractors (a 4' skid steer and a kubota compact tractor). So, I put a bid in

But I explained it (in writing)
yes, this look expensive, but look at your costs:
And showed them thru numbers that because it takes them so long with so many in house people plus all the machinery time that it's really costing them the same amount of money and they still have to do all the work, take all the risk and tie up their maintenance guys for 2 days (seriously, 2 days, it took me 2 hours to 1/3 of the place to come save them, they still weren't done after 8 hours with the other 2/3 of the place). 

The other example going around is the guys who are putting low prices on plowing and high prices on salt and beating you. So EXPLAIN IT. Property managers don't understand snow, they just want their little area to run and their boss not to yell at them just like everyone else at work. They aren't experts in snow removal or lawn maintenance or plumbing or anything. Explain it. Look, here's our cost, it's one cost there's no extra fees involved, in the end we're quite a bit cheaper BECAUSE............. use real world examples. Remember, they aren't making the decision, they have to justify their decision to the board/their boss/ a committee, do their job for them and make it easy to justify using you even though it might look at first glance it's more expensive. Just like the corporate world. 

examples you might be able to use (this is not me but just ideas)
We only have a 1/2 hour minimum charge vs. the other people's 1 hour. (that's huge BTW)
We bill you one price, there's no guessing what the charges might be.
We bill by the hour, but there's no transport fees, only our time on site. (people HATE to pay for you to drive there, even if your more expensive per hour, they can see you working)
No hidden fees, no ala carte like the airlines, one price gets it all.
Your salt cost will be this every time we apply. It will contain X # of lbs and it is precisely metered so you get exactly what you paid for. NO guessing involved, no salt costs of 3x the plowing. (I dunno, we don't really salt here like you do in the Midwest,/NE but clearly it's a significant cost, so EXPLAIN it.)

Esp for property managers, you may not win this one, but if you do easily explainable work and help do the property managers job, then they'll remember for another property. 

All you can really get is the chance to bid a property, after that it's up to your costs to bid it right.


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## toby4492 (Dec 28, 2005)

A couple of observations from a non-plower:

Great thread with lots of excellent posts. 

Lowballer--- A term that is used here way more than necessary. As LoneCowboy so brilliantly posted, it's capatalism and nothing more. Not to say that lowballers don't exist, but not everybody that bids lower than you can be considered one. Too that I would ask the questions: If you buy a plow from a dealer and then buy all aftermarket parts for it are you lowballing the dealer? If you do all your own in house service work are you lowballing the dealer? Some would say no, but I figure that most dealers would say yes, unless of course they are selling the aftermarket non OEM parts as well. Companies that learn how to do things more efficiently can bid for less and still turn the profits that they need. Most smart business people that I know and have met over my lifetime are always looking for ways to do things at less overall cost. It's simply smart business to do so. It doesn't matter the industry whether it's service as most here supply, or manufacturing which is where my career has been spent. The bottom line is just that, and if it isn't a focus most businesses would fail.

Granted every year there will always be newbies entering any industry. Time will determine whether those that do, make it or not. This year in particular there appears to be alot more getting into snow removal. Not a big surprise since many that had jobs and are now unemployed owned trucks as their daily drivers whether they really needed them or not. These people still have mortgages, families to feed, etc... Should they all stop living the dream of having what they need?? Why not consider getting into the snow removal business, hell I gave it serious consideration myself. IMO classifying this group as "knuckleheads" isn't fair as all of you at one time or another were new to this industry. Just as IMO to read something that states "look at the type of people that make up the unemployment sector" isn't a fair statement either.

Plenty of hard working, professional Americans as well as Canadians have lost jobs due to the state of the economy. While I was out searching for a job over the previous 8 months I was classified as a "displaced worker". WTF is that???? I wasn't displaced, I knew where I was, just needed to figure out a way to keep my family above water with a leaky raft after I got shafted by my previous employer.

Times are tough out there and again, only time will tell how long it will last. I feel bad for all of you out there that are losing work due to being underbid, but with that said, there are plenty of people out there that see alot of green grass in this industry. Property Management companies are here to stay and now that they have there grips into companies like WM I know that it will make things tougher out there for this industry. It is sad, but at the same time it's reality. Rather than letting it get you down and dwelling on it, (which takes energy to do) maybe now is the time to re-focus that negative energy and re-evaluate your own business plans and figure out a way to get more efficient so you can still live the lifestyles that you are accustomed to. You can't compete with the big PM companies plain and simple. There is no fix for that. JMO


And BTW, I am glad to see that the lowballers are no longer Tommys and are now Joes. Makes me feel a little better.


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## Neige (Jan 29, 2008)

This has been a really great thread. I agree there is not much that can be done. The idea that our industry gets regulated, may not make it any better. Yes there would be fewer players, but your costs would definately increase. There would be rules and regs regarding who you can employ, how many hours they can work, overtime, vacation pay and a whole lot more. Careful what you wish for you may get it and realize we were better off before.
I am constantly reinventing myself with my clients. I now offer anti icing, I am the only one in my region. I go after clients that not everyone can get. I do very well with the clients that need snow hauled as soon as it stops snowing. We are constantly looking for ways to become more efficient. When I do find a way to be more efficient I dont lower my prices, I just make more money.
It was mentioned that slip fall is a huge problem for our industry. Yet there are guys that are making a fortune on anti icing and salting because of it. They may bid the snow below cost just to get the salting. I am sure they would be the first to cry foul if the laws were changed making it harder to go to court. So is that the answer?
If I want change it has to start with me. I in the end run I decide which contracts I sign and at what price. I think that an association like SIMA can work, if there are things I dont like about it I will voice them. I will become involved and volunteer so I can be the change. I heard that the code of ethics were removed, I want to know why, and then I will try and get them back in. You want the industry to change then suit up and get involved. Dont just be a member and complain get involved. SIMA has over 1400 members right now and think its in a great position to make a change. There are many great members involved right now, and we could use many more. I would love to have Procut, Lonecowboy, Mark, Tony, Mike and many others on the committees so that things can change.
I hope to be on the board of directors one day, not because I think I know it all, but because I want to give back to this industry. If our industry does well than I do well.
So if you really want this to change stop *****ing and become involved and be the change.

PS I know Mark you have done lots already, maybe the time is right with new people.

Paul


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## big acres (Nov 8, 2007)

Neige;846699 said:


> I think that an association like SIMA can work, if there are things I dont like about it I will voice them. I will become involved and volunteer so I can be the change. I heard that the code of ethics were removed, I want to know why, and then I will try and get them back in. You want the industry to change then suit up and get involved. Dont just be a member and complain get involved. SIMA has over 1400 members right now and think its in a great position to make a change. There are many great members involved right now, and we could use many more. I would love to have Procut, Lonecowboy, Mark, Tony, Mike and many others on the committees so that things can change.
> I hope to be on the board of directors one day, not because I think I know it all, but because I want to give back to this industry. If our industry does well than I do well.
> So if you really want this to change stop *****ing and become involved and be the change.
> 
> ...


This I can totally agree with. We can't change economics 101, or "fix" everything wrong with an industry.

What is left to do? I have been considering joining SIMA for some time now. I just took a look at the SIMA threads, and picked the one mostly likely to have criticism.

One poster referenced the thread having gotten shorter overnight. I went to the SIMA site and looked at the list of commitees. It was painfully obvious that an "Ethics & Enforcement" committee is missing.

What powers within have prevented this from being one of the MAJOR components of the organization?

For you guys that are members, let me hear it! Is there some force on PS that will edit any inconvenient truths? Isn't there some way you could petition the membership?

Sure, the fancy sticker and a logo on your sales literature are nice, but what does the organization do to promote its image as THE "accredited" association of the industry. It seems to me that without ethics and enforcement that it is a good educational tool, but not something like the BAR association, where you are booted if you violate ethics.


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## procut1 (Jan 21, 2004)

SIMA, which I am a member of...(or was, gotta see if i paid up my dues) is on the right track but still has a long way to go.

The CSP program is good. The problem is nobody knows what a CSP is.

SIMA is not at the point where its an industry name. Property managers dont give it a second thought.

Its a good "club" to meet people, swap stories, and Ive had a good time at the events.

I would definitely say it has its benefits. But its not viewed as nor will be the "industry regulator" or "industry standard"

Not bashing SIMA in the slightest, and please dont take it that way. 

What they would need to do is make a big push to get their name out to our customers as to what they are. They would also need to change their membership to incorporate qualifications to be a member.

That would be a tough thing to do. Getting "the word out" would require a lot of money. Limiting who can join would mean dues would be very high and the only companies that would be able to afford it are the big boys who have their own brand and wouldnt receive much benefit by the SIMA connection.

SIMA is a place to meet people, learn, gather information, and better yourself. With that they do a pretty good job. But its unrealistic to expect much more than that.


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## procut1 (Jan 21, 2004)

The problem with an "enforcement" committee is:

1. Who is going to do it? As friendly as everyone is, many are competitors.
2. Who determines whats right and wrong? 
3. What we chat about online and most of what we hear is one side of the story. It would require serious digging to get the whole truth.

What would get you tossed from the association?

If a company gets into financial trouble is that unethical?

Ive had times where I had to be late paying subs and employees because customers didnt pay on time or I had to chase big checks.

Is that unethical? Having all intentions to pay, but sh!t happens.

Symbiot who couldnt satisfy SMGs agreements once they realized what they bought. 

There is too much open for interpretation and what one person views as unethical another views as business.


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## tjlands (Sep 29, 2005)

Tony Bonventre;843264 said:


> If you could change one thing about the Snow and Ice Industry, what would it be. What bothers you the most? Is it the National Snow Clearing Houses taking all your profit, The rising insurance costs, Fuel costs, being underbid. What would you change.


I would change nothing, its just like any other business.
The strong get stronger, the middle guys stay out of the way, the weak disapear.

I am surprised this hasnt turned into another Walmart thread although it is leaning heavy towards SIMA now. Some of you guys with the 1500 word posts.......write a book.

PS. I deal with 11 management companies, several Banks, some national Retail, fast food
chains(most of them) 
How many aware of SIMA = 0 Which makes there dues Priceless
No I am not a member


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## big acres (Nov 8, 2007)

procut1;846934 said:


> The problem with an "enforcement" committee is:
> 
> 1. Who is going to do it? As friendly as everyone is, many are competitors.
> 
> ...


TJLANDS -I don't think anyone mentioned Walmart here, and I tire of the one-liners on trivial threads, so I appreciate the thought behind the 1500 word posts. I see your point about just pushing on as is. The SIMA thing is just a discussion... if nobody participates, it won't grow. Maybe if an end customer who was trying to shaft a member received a letter from the association trying to "mediate" an amicable compromise, then the association would gain awareness? Food for thought... that's why we're here, right?


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## Neige (Jan 29, 2008)

procut1;846929 said:


> SIMA, which I am a member of...(or was, gotta see if i paid up my dues) is on the right track but still has a long way to go.
> 
> The CSP program is good. The problem is nobody knows what a CSP is.
> 
> ...


Call me an optimist, but I think its possable. At least i am going to do my part in trying to make it happen. There is talk about putting money into a fund for the purpose of getting the word out. There are lots of great ideas floating around the different committees. I think SIMA is changing, its not a big boys club so much anymore. Sure there are still the long time members, but there lots of new blood also. I would never have though I would be on a committee so quickly. I never though I could win the Excellance in Business award in my second year as a member. I dont pretend that I will change SIMA to my way of thinking, nor should it, but I do believe its up to me to add my voice and views. Time will tell if it will make a difference.



procut1;846934 said:


> The problem with an "enforcement" committee is:
> 
> 1. Who is going to do it? As friendly as everyone is, many are competitors.
> 2. Who determines whats right and wrong?
> ...


I think you hit the nail on the head. But if SIMA does not get an enforcement committe in place it will never be taken seriously.

1. Who is going to do it? As friendly as everyone is, many are competitors.
Agree so it would have to be a committe of say 20 members from all areas of the states and Canada. 

2. Who determines whats right and wrong? 
Take 5 members that are not competitors and they have to use some type of code of ethics and guidelines.

3. What we chat about online and most of what we hear is one side of the story. It would require serious digging to get the whole truth.
Yes it would, those 5 people would get to hear both sides of the story.

What would get you tossed from the association?
That would be for the whole membership to decide. It would be a big job , but will need to be done. Then every member would be aware of what can get you tossed from the association.

If a company gets into financial trouble is that unethical?
That would depend, when they got into trouble, and did they mislead anyone knowing they were in financial trouble. 

Ive had times where I had to be late paying subs and employees because customers didnt pay on time or I had to chase big checks.
When you hired them, did you mention that this could happen? did you finally pay them?Did you pay them as soon as possible, or drag it out as long as you could? Did you continue to get paid while they were waiting?

Is that unethical? Having all intentions to pay, but sh!t happens.
If you pay yourself and not others yes its unethical, if **** happens and you walk away clean yet others go bust I have a problem with that. If **** happens and you go bust, and others lose out well thats a chance they took going into business with you.

Symbiot who couldnt satisfy SMGs agreements once they realized what they bought.

There is too much open for interpretation and what one person views as unethical another views as business.[/QUOTE]

I disagree with that statement, its either ethical or not. Write down the rules and laws, have your peers judge and live with the consequences. I am not saying it would be easy, but if everyone understands what can get you tossed then live by those rules or get out.
Lets face it most cases would be easy enough, the difficult ones, we will take on one at a time. If we cannot do this then SIMA will be only that, a great place for members to get together a share stories. I believe it can be so much more.


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## tjlands (Sep 29, 2005)

big acres;846959 said:


> TJLANDS -I don't think anyone mentioned Walmart here, and I tire of the one-liners on trivial threads, so I appreciate the thought behind the 1500 word posts. I see your point about just pushing on as is. The SIMA thing is just a discussion... if nobody participates, it won't grow. Maybe if an end customer who was trying to shaft a member received a letter from the association trying to "mediate" an amicable compromise, then the association would gain awareness? Food for thought... that's why we're here, right?


Discussion, OK
SIMA = non -profit
OK where does $265 go

Why dont they lower dues to $25 and see what happens.
Plowsite is free, but I have hired over a dozen subs from here.
And several drivers. Which makes this far more valuable.
How many one truck operations or drivers do you know that would fork over $200
a year...not many.

And yes I have tried calling/contacting SIMA with questions, gave up several yrs ago.
One of my ideas was a small membership fee $25 for putting together a list of drivers etc. Not even an email back.


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## Turf Commando (Dec 16, 2007)

What an uplifting topic on how we have no education therefore no future ....
Can't do anything about it, we must adapt, let's face it were not brain surgeons. If we would of done something with our lives, say Doctor? we wouldn't be on this site. Instead be banished to the Bahama's catching some rays, drinking wine, eating cheese, listening to Hotel California...


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## big acres (Nov 8, 2007)

tjlands;847043 said:


> Discussion, OK
> SIMA = non -profit
> OK where does $265 go
> 
> ...


Since I'm not a member, I can't sa if SIMA is a true non profit or not.

I believe most nps have transparent financials. So I'd SIMA collects 265 x 1400 members.. that's 371k budget.

It would be of value to me if the stated all the budget items and possibly let membership vote on direction and allocation of expenses.

Do we want an awareness campaign this year targeting management companies, or a recruitment blitz, etc...?

I think it makes sense to try and take th closest thing to a credible association, and take it to the next level.

I have no idea of the management structure... maybe some here do?

I saw Neige post almost identical respons to mine about how you would enforce ethics... I think those answers are what most would expect, so I hope I'm not out in left field.


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## procut1 (Jan 21, 2004)

Darn those 1500 word posts...lol

I apologize. 

I shall return to the normal posting.

Please follow my new threads.

Should I buy a Ford or a Chevy?
How do I get commercial customers?
Plastic or metal spreaders


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## Turf Commando (Dec 16, 2007)

procut1;847261 said:


> Should I buy a Ford or a Chevy?
> How do I get commercial customers?
> Plastic or metal spreaders


Now your talking....:laughing:


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## ford550 (Nov 9, 2008)

> Just as IMO to read something that states "look at the type of people that make up the unemployment sector" isn't a fair statement either.


Unfortunately my statement is a realistic fact. I didn't say everyone, just the majority. Look at the construction unemployment numbers alone, 1.2 million lost in one year. MOST of the unemployment has been in the minimum wage to middle wage type jobs ($7 to $15 per hour range), it is just reality.

Your right it is not, "lowballing" (which there are some that actually do this). But, It's not "knowing how to run a business". It's thinking, "because I already have a truck I am a snow plow operator". These are the things that make it easy to get into the industry. I am a capitalist. I believe in the American dream. Everyone has the freedom to start whatever business, whenever they want. But, there is a difference between a "fly by night" and an actual "professional" that do this for more than just putting food on the table (and again, I don't have a problem with anyone doing what it takes to get through). I would rather see them working and trying, than living off me on unemployment. I see it everyday.


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## Brian Young (Aug 13, 2005)

procut1;847261 said:


> Darn those 1500 word posts...lol
> 
> I apologize.
> 
> ...


Procut, you forgot "which plow"?


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## Brian Young (Aug 13, 2005)

I love this post. Its has to be one of the better ones IMO and I appreciate the "1500 word" responses. I still think you can talk about SIMA, SMG, USM etc. but when it comes to a non-regulated industry with no real start up costs and no real guidelines it obviously lets all kinds of people into the industry both good and bad. Guys who know how to run a business and guys who think making 10-15 bucks and hour is awesome. I can only police myself and that's all the time I have for. I'm not going to go out and check to see if the long haired,dirty ripped jeans, beer reeking guy who's driving a 80's piece of crap truck is getting fair market value for a driveway. To me if a customer wants or is willing to take a chance on "that type of guy" then I move on to people who can appreciate a legit, reliable company.....there are still people out there who do, believe me. In this economy everyone is looking out for number 1 and who can blame them. I understand this post kinda went to wal-mart and SIMA but sticking to the original question....like many have said, there is no fix or at least without tons of money and years of time. On the flip side of so called "lowballing" We are looking at an account where the previous guy (probably no ins, no taxes etc.the usual) was getting $75.00 to plow a lot that takes no more than 15- maybe 20 minutes. I couldn't believe this business was paying that much for a tiny, wide open easy push. Hopefully we land it next week.


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## Silentroo (Jun 19, 2006)

Want to know what is wrong with the snow industry. 

Greed and arrogance. 

You know what. National companies find guys every year that are excited to work for them.

Often the guy at 25 k on your 50k contract does as well if not better then you did. 

I have heard for years my company is destroying our market. Funny, I continue to make a lot of money, give great services and have subs that return excited to work for me. Why I pay ok (yes they would make more working for them self but it is more work) I pay fast, and I have great properties. 

How did I take them.

The company I targeted was fat and lazy. They felt that their property managers loved them and their service. I came in and gave better service for a better prices.

Snow removal is not rocket science. Service is. 

Funny thing is I still find Property management company's Paying twice what Walmart and Target do for worse service. 

Menards and home depot in our area are a great example. 

Menard pays 50 to 75 cents on the dollar what home depot does. Guess what the lots look exactly the same. What is the difference. Home Depot pays more. Is the service better? Is it worth and extra 25- 50 cents a dollar? 

Funny thing I was talking with one of the dinosaurs at sima. He was lamenting the fact that this company had taken a property from him (it was me and he did not know it) and that they had taken it for less than it had cost him to do it the last year. He was laughing that the new company would be out of business and the property manager would be begging him to take it back by Feb 1. 

The next winter was snowier meaning more snow and more storms. Funny thing I made a lot of money on the seasonal contract. And took the rest of the properties from the manager because my service was better, as was my price. 

Arrogance and Greed will get you everytime.


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## procut1 (Jan 21, 2004)

Silentroo

You basically said just what I did.

Every business has its own rules and needs.

Guys around here sealcoat driveways and make a great living from it. Make great profit, and do a nice job.

If, the way my business is set up, did driveways at their price, it would cost me more money than I would make.

They make great profit at it.

I would lose my ass.

Does that make them scrubs?

If they are making a profit for their business and doing fine.....Who is to argue.

Thats what business is all about. How to provide your customers more for less and gain your share of the market.

Its not their job to "preserve the industry"

Heck....I complain about it too.

But personally. I only care about MY company.

I dont care if my competitors cant put food on their table. Every chance I get, I take a plate off their table and put it on mine.

Either I know what Im doing and Im doing it right for MY business.

Or Ill go out of business.

But its not my job to keep my competitors in business.


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## Tony Bonventre (Feb 11, 2004)

Replying on Procut and Silent roo,

I agree that greed is a bad thing in this industry, however leaving 1000's of dollars on the table is ignorant. Recently I have heard a lot of stories about 50K dollar properties being done at 25K, that is ridiculous. There is nothing more aggravating to me than when the following happens over and over, and i am tired of it, and doing something about it.

2003 - 2004 Company B Plowing $60,000.00
2004 - 2005 Company B Plowing $61,000.00
2005 - 2006 Company A Plowing $55,000.00
2006 - 2007 Company B Plowing $58,000.00
2007 - 2008 My company Plowing $60,000.00

Bids 2008 - 2009 My Bid $58,000.00
Company A $54,000.00
 Company B $52,000.00
Company C $51,700.00
Company D $31,900.00

Unfortunately the end result was company D, you know losing this contract to someone like contractor C would not have been as bad, competitive bid and I lost no big deal.

Bids this year My Bid $58,000.00
Company A $57,000.00
Company B $52,000.00
Company C $62,000.00
Company D Out of Business
Company E $58,000.00 Note this company is 250 Miles away

At the conclusion to the 2008 2009 year the property managers manager was fired, when the new manager received this years bid he wanted to know why they were so high, I spoke with him and explained what happened last year, he still did not understand, lucky for me the tenants on this property told the new manager about the previous year being a nightmare.

The good news is we are plowing this property again, the bad news is prior to Company D's service there was only a 2 Page contract, after the miserable year that the property owner had with Company D the contract is now 8 pages long and they added a hold harmless agreement, 

I got a little off track with this, the point of what i am saying is i am not greedy I just want to make a decent profit If you are going to bid so low that you do not make a profit at the end of the day, then why do it. 

I know that this is not rocket science but neither is playing football, yet there making millions, it is all in how professional you are and what you think you are worth.

In conclusion i leave you with this, Snow removal on large scale especially retail is a vital part of the economy, there are figures that i have but do not wish to share here but the loss in revenue from snow on retail is in the Billions our job is to control the loss through professional service and keep the Shopping centers, malls, distribution centers open, One example in 2007 - 2008 a target distribution center shut down for 4 hours due to poor snow removal operations it cost target millions and caused guaranteed products (Nintendo Wii) not to be delivered to the stores by 6:00 AM there ad stated there would be 10 Wii's in every store every morning, 32 Stores did not get there delivery's until Noon that day. 

Ok I have gone on enough for now.


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## big acres (Nov 8, 2007)

Tony Bonventre;848552 said:


> I agree that greed is a bad thing in this industry, however leaving 1000's of dollars on the table is ignorant.QUOTE]
> 
> I can't agree with this more!


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## LoneCowboy (Jan 2, 2007)

From a letter to the editor in today's WSJ (11-2-09)

"...Customers do discriminate between alternatives that are made available to them, and they lean toward solutions that stand apart in providing the best outcome to their personal needs and preferences. But, here's the folly: they always have, it's just that we are coming out of a dark age of corporate strategy that has been surreally and myopically focused on low-cost, low-price, scale driven, competition. Unfortunately, this has also meant a dearth of undifferentiated offerings. *When all else looks essentially the same, more and more consumers--even highly discriminating ones--make their decision on price. ... *"

Richard Wilson. 
Professor of Marketing
Kellogg School of Management, Northwestern University. "


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## big acres (Nov 8, 2007)

LoneCowboy;848659 said:


> From a letter to the editor in today's WSJ (11-2-09)
> 
> "...Customers do discriminate between alternatives that are made available to them, and they lean toward solutions that stand apart in providing the best outcome to their personal needs and preferences. But, here's the folly: they always have, it's just that we are coming out of a dark age of corporate strategy that has been surreally and myopically focused on low-cost, low-price, scale driven, competition. Unfortunately, this has also meant a dearth of undifferentiated offerings. *When all else looks essentially the same, more and more consumers--even highly discriminating ones--make their decision on price. ... *"
> 
> ...


As profound as that is... I think we are all professors since we are all experiencing this firsthand.

Supply and demand at work... the same reason subs will work for less this year. It used to be that not everyone had a pick-up for a daily driver -a low supply of plow vehicles. Now many do, and they don't have to cover the expense soley with plow revenue... unless they are professionals -high supply.

Years ago, courier companies used to have fleets of company owned vehicles. Then someone figured out that Americans love to drive, and drive their own vehicles. They realized that so many people liked to be in their own "comfort zone", that they would drive their own vehicle -even at a loss. I have never met anyone who made a decent living as a courier with their own car, or truck for that matter, yet the companies are successful and have no shortage of driver-owned delivery vehicles... same thing happening with snow.


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## procut1 (Jan 21, 2004)

Lone cowboy posted a perfect quote.

And thats the problem with this industry.

First off.....Customers hate snow....Its not something like landscaping that they perceive as a lasting benefit.

Its something they literally view as pissing money away.

The problem lies in the HUGE PRICE SPREAD.

With so many new people coming in, the price range has been lowered.

So whereas years ago the price range would be 50-60k. And you would get the oddball at 30k

Now.

Somewhere along the line the 30k guy got the job.

Now thats where the bar is.

MANY MANY MANY contractors base their pricing on "what the property goes for" 

Yes, its the wrong way to bid....But thats how it is. If you hear a 50k property is going for 30k, youre probably not going to waste your time putting in a bid. But guys who think 30k is a lot of money will.

So now the bids are in the 30s and the couple of guys who bid in the 50s where it should be and used to be are now the oddballs.

I am related to the owner of a management company that manages condo complexes and retail locations. Well beyond my service area.

We talk daily about this topic and what Im posting is exactly what she gets.


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## procut1 (Jan 21, 2004)

Not to mention with the economy the way it is, for a lot of people any work is better than no work.

Even working at practically break even, if it pays a couple bills....Is a better option than not.

If you have to solve an immediate crisis, you do what you have to do.

Ive had it before where I was jammed up waiting on big checks to come in that were late and taking forever and got in a serious cash crunch.

Im in the parking lot maintenance business.

There have been times Ive needed to make a $5,000 payroll on Friday and its Wednesday and I dont have the money.

Ive called up lots that I bid much higher and offered a deal.

Ive called a lot where I bid $9,000 and told him I could be there tomorrow and knock it out for $5,000.

No question I lost money on that job. But it was do that, or have no employees come Monday.

When youre faced with 2 bad choices.....You have to take the one "less bad"

Many guys right now are just worried about cash flow. They realize its not the right thing to do for a healthy business, but in the short term, you can make a little money stretch a long way if youre creative.

If a guy is faced with truck payments, rents, taxes, bills, and no work.......

He has 2 choices.......Either do nothing and meet the repo guy.......Or do something and try to make it stretch.


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## LoneCowboy (Jan 2, 2007)

procut1;848689 said:


> Many guys right now are just worried about cash flow. They realize its not the right thing to do for a healthy business, but in the short term, you can make a little money stretch a long way if youre creative.
> 
> If a guy is faced with truck payments, rents, taxes, bills, and no work.......
> 
> He has 2 choices.......Either do nothing and meet the repo guy.......Or do something and try to make it stretch.


I agree
and in the short term, this works, keeps them afloat for a few more months/weeks/days. (esp if they get a big profitable storm)

In the long term, this won't work. Maybe they know it, maybe they don't, but in the long term everyone is dead so they try to get thru to next month. No matter how good your long term plans are, if you don't have either the business or the capital to survive right now, it does no good.
For example, they are putting tons of hours on your equipment, which is bringing tons of maintenance costs closer. But they aren't here yet and for the short term, it looks profitable.
Either they will go bust or they'll raise prices in the long term.
But to survive the short term YOU have to be come more efficient raise capital, change your operations to match those prices. When the other guy raises prices to make his work profitable (which it isn't now), YOU make money at his price and the price bar has been reset and he's out of business and the moat has gotten tougher to breach. 
He can't make money at the low prices he forced on the industry and now he has to raise prices.

Capital, invest it, use it, have it.
cash is king, esp in a WalMart nation.


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## Mark Oomkes (Dec 10, 2000)

Tony Bonventre;848552 said:


> Replying on Procut and Silent roo,
> 
> I agree that greed is a bad thing in this industry, however leaving 1000's of dollars on the table is ignorant. Recently I have heard a lot of stories about 50K dollar properties being done at 25K, that is ridiculous. There is nothing more aggravating to me than when the following happens over and over, and i am tired of it, and doing something about it.
> 
> ...


This is SOP for the last few years by me. From established companies. A couple of them have gone this route.

Heck, they are even beating what I consider lowballers prices by 30-40%. :realmad:


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## Tony Bonventre (Feb 11, 2004)

Mark it needs to be everyones SOP. Perform the work in a professional reliable way, don't drop your price to get the work, and # 1 don't ever let someone else bid your 50K job for 50K and have you do it for 25K


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## procut1 (Jan 21, 2004)

Tony

It all sounds nice. But for every one person reading this thread there are 10,000 who have never heard of plowsite.

Prices are not going to go back up.

These properties will get used to paying 25k and they will always find someone to do it for that.


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## big acres (Nov 8, 2007)

procut1;848788 said:


> Tony
> 
> It all sounds nice. But for every one person reading this thread there are 10,000 who have never heard of plowsite.
> 
> ...


Procut -I respectfully disagree. Everything is cyclical in life.

TonyB's manager experienced "company D" and got what most of us would tell our customers to expect from such price -a nighmare.

I had a retail manager tell me that normally they throw out the lowest and highest bids, then choose from the middle based on merit.

This year the lowest were reputable names and the owners demanded they go low.

Most will do fine, likely cut a few corners, but get by enough to hang on to it for the season. They are decent companies obviously playing the cash flow strategy to get by.

They know it is not profitable, and I doubt they started out with the goal of breaking even. They will be pushing prices upward at the slightest hint of a better economy, or soon they will be out of business like company D.

Others will become company D right away, and managers will react. Many will realize that if something looks to good to be true.... well, you get what you pay for.

They may get by with company Ds for awhile. Sooner or later, company Ds will realize that they aren't making much of a living. They will realize that their price that once looked so great don't make enough to cover the breakdowns, bad debts, and all the hidden costs. They will raise prices or get out of the biz.

During this slump, "would be company ds" will think about getting into the biz, and opt not too... realizing how cutthroat it is at this time.

This biz is too hard in many ways. I can't see anyone doing it long term if there isn't much reward.

I'm not usually the optimist, but I've heard very few success stories about Nationals who've created a win-win-win for themselves, their subs, and the customer. Without that, I have to believe that anything else is short-term thinking.

Just my take on it.


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## Tony Bonventre (Feb 11, 2004)

Home run Big Acres, You are right on the money, "This year the lowest were reputable names and the owners demanded they go low." This is acceptable I understand a temporary price break stratargy i am using it myself, but i have kept a sense of urgency and i actually have some agreements with the property managers/owners that we can keep our prices sligthly lower but as soon as they fill some of there empty space we would expect that we could return to normal pricing structure. When the situation is low economy empty stores and spaces, in most cases the Property owner has to pay the empty spaces portion of CAM charges(Common area Maintenance costs) so we have eased that burden a bit, under the agreement of when the spaces are full again that the price will rebound. We gotta do what we gotta do if our customers go out of business it does not help us. Our services are professional and responsive and our pricing reflects that, when we give a break to a customer, we ask for something in return, we usually get it. for example one property we do laid off some workers and they are having a hard time, we have barricaded off half of 2 employees lots reducing the size of the plow able area and eliminating 1 Loader and pusher, the price obviously reflected that, however my margins stayed the same.


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## big acres (Nov 8, 2007)

Tony Bonventre;849587 said:


> Home run Big Acres, You are right on the money, "This year the lowest were reputable names and the owners demanded they go low." This is acceptable I understand a temporary price break stratargy i am using it myself, but i have kept a sense of urgency and i actually have some agreements with the property managers/owners that we can keep our prices sligthly lower but as soon as they fill some of there empty space we would expect that we could return to normal pricing structure. When the situation is low economy empty stores and spaces, in most cases the Property owner has to pay the empty spaces portion of CAM charges(Common area Maintenance costs) so we have eased that burden a bit, under the agreement of when the spaces are full again that the price will rebound. We gotta do what we gotta do if our customers go out of business it does not help us. Our services are professional and responsive and our pricing reflects that, when we give a break to a customer, we ask for something in return, we usually get it. for example one property we do laid off some workers and they are having a hard time, we have barricaded off half of 2 employees lots reducing the size of the plow able area and eliminating 1 Loader and pusher, the price obviously reflected that, however my margins stayed the same.


Bravo on these creative strategies. You provided a solution to your customers and held onto the biz while maintaing margins to some degree and assuring that the bar isn't permanently lowered.


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## Neige (Jan 29, 2008)

Right on, you have to work even harder in these times. Keep talking with your clients, help them find solutions to cut down on costs, and yet protect your margins. It can be done, just dont give up.
One example i do two shopping centers one next to the other. Different owners, #1 has a huge parking in the back that never gets used, we only did a fire lane in the back. #2 I have to push all the snow in the back to the front, in big storms it becomes to difficult to push to the front so I piled it in the back and would have to haul as soon as we were done. My 3 year contract was up, and neither wanted a price increase for the next 3 years. So I suggested to #1 no price increase if I could push #2s snow from the back only into his back parking I would clear his whole back parking and keep it salted. He agreed, then I went to #2 and said I got an agreement with #1 that I could push all his back snow there. He would no longer have any hauling charges for that snow. I would charge him $1000 more a year for the salt I would have to put down on #2s back parking.
He agreed, with a savings of around 3 grand for the hauling.
In the end run I signed both for 3 years, and saved around 50 hours a year not having to push the snow to the front. Down side no more extra money for hauling, I can live with that. If I had not done the footwork, both may have gone to bid, and who knows what would happen then.


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## Bajak (Nov 12, 2008)

Tony Bonventre;849587 said:


> .... We gotta do what we gotta do if our customers go out of business it does not help us....... for example one property we do laid off some workers and they are having a hard time, we have barricaded off half of 2 employees lots reducing the size of the plow able area and eliminating 1 Loader and pusher, the price obviously reflected that, however my margins stayed the same.


Great solution for the customer. I think too often we do not always take into consideration the customers changing needs.

Now I see this thread taking on an effective and pro active solution based discussion.

I LIKE! :bluebounc


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## JohnnyRoyale (Jun 18, 2006)

Great read so far! -kudos to Tony for bringing it up.


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## forestfireguy (Oct 7, 2006)

Lots of really good insight on the current trends in this and the landscape maintenance market. In "snow" areas landscape maintenance and Snow are so closely tied together it's ridiculous. I wonder if any of the big retail chains WM for example have ever considered bringing in consultants or hiring out sourcing people to dictate prices for services they recieve from vendors.........

Basically thats what USM, Brickmann and the other clearing house kind of operations are doing. Imagine if they cut the middle man(USM or other), did this cost saving measure inhouse and saved themselves some money but still let their providers make a decent profit on services. Follow my logic here, 

WM Pays 100,000,000 in snow anually(its just a number)

USM plans to save WM, 20,000,000 If WM created an inhouse outsourcing department they could save just as much, possibly more, as it stands(the way I understand it) is Wm is saving their 20, USM is taking another 20 or son and the guys who were doing the work are ending up with 60 % of thier original numbers or walking away from the work all together. It's just a thought, I'm sure it's full of holes, but I was wondering why these big retailers don't do this stuff in house..........

Couldn't cost many millions to have these things happen in house. And, they'd have better control and their vendors would be happier. 

Unfortunately this is a growing trend in the business, management companies are getting sucked into the "outdoor service management comapny" fold every day. For the same reasons WM and Target, and Kohls and so many others are. 

It is simple economics......................it just isn't good for us as an industry.


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## procut1 (Jan 21, 2004)

Forest fire.

I agree with what youre saying but Walmarts position is just this "They do one thing and do it better than anyone else"

They want to focus their attention on that one thing. All this facility stuff is a distraction. Another division, another level of management, another level of responsibility.

They want is off their head.

Think about it this way.

I can work on my own trucks and save the repair shop rate. (which I do)

But at the same time......How much is it costing me in business by spending the time playing mechanic that I could be spending on my business?

Sometimes saving a few bucks here, costs much more somewhere else.


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## ford550 (Nov 9, 2008)

> sometimes saving a few bucks here, costs much more somewhere else


bingo!!!!!!!


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## big acres (Nov 8, 2007)

Just a thought, but what if SIMA?:

A. Re-established a code of ethics AND enforcement.
B. Had a sales staff that solicited national chains on behalf of it's membership.

popcorn, anyone?


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## ajman21 (Oct 30, 2009)

ok here is a thought from a noob to the site... 
I have watched all this from the point of view of the consumer and the provider of these services. I have come to the conclusion that in everything (ei, money, weather, job market economy ext) comes and goes in long sweeping cycles. for example my dad gets no bigger kick then when he hears some blowhard going on bout global warming. he laughs because he remembers in the 70's when the big scare was get this, "the NEW ICE AGE" apparent the fear was that the earth was getting colder and would keep doing so till everything froze and we all died HA! and now we are woried that it will all melt! For any service market its the same thing in the 20 plenty, 30's-40's famin, 50-60's plenty 70's famin, mid 80's-90's plenty, 00's famin!!! its all a cycle if you ride the lows u will rake it in during the high's. i figure why get worked up bout it always save what you can and live like your poor when youve got plenty and you'll always have plenty!


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## Neige (Jan 29, 2008)

Talked to SIMA staff today and was told that a committee was working on a code of ethics and a way to enforce them. Should be presented to the members at the next Snow & Ice Symposium. There is also talk about getting info out about SIMA, its in the planning stages, more to follow.
I ask you this, you members of SIMA, do you take the time to explain what SIMA is to your clients? When I talk to my clients about production rates, anti iceing, snow melting, I tell them I go to the USA and take courses through SIMA. I tell them I am learning to become a Certified Snow Professional CSP so that I can offer them the best that is available in our industry. Most of them are impressed, they thought all there was to snow was plowing and salting. If all I have when I leave their office is, this guy takes his business seriously, then I have done my job. Our industry needs us to be proactive, thats when change happens. I know im a optimist, and hope I will always be willing to help move our industry forward. 
Paul


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## Bajak (Nov 12, 2008)

Brian Young;847391 said:


> long haired,dirty ripped jeans, beer reeking guy who's driving a 80's piece of crap truck


:laughing::laughing:Have you seen me before?
I don't have an 80s piece of crap truck. It's a 2001.:laughing::laughing:


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## shott8283 (Feb 17, 2008)

i would make it snow more


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## Tony Bonventre (Feb 11, 2004)

Wow this is great I thank all of you for the feedback while i sit in my office trying to come up with ways to improve this industry for all. We can do it.


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## Tony Bonventre (Feb 11, 2004)

terrapro;844638 said:


> Management companies, I would do away with them completely. When dealing with major liabilities such as we do you can not have an office in Florida overseeing what happens in Michigan.


Terra pro I agree with you however, I don't have a problem with "management" company's I think we need more "Management" companies and less national clearing house of snow removal companies.


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## Tony Bonventre (Feb 11, 2004)

As you stated, shows abuse and desperation. Pick a price and stand firm is the best approach imo.[/QUOTE]

Agreed 100%


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## procut1 (Jan 21, 2004)

Dropping a price while not dropping a service says to your customer "I was trying to rip you off"

I explain my pricing to my customers this way:

I dont go into useless details about overhead and fuel and yada yada.

I tell them right off the bat:

My pricing is not a guess.
I have calculated formulas based on costs and profit to price work at a number where I guarentee staying in business and my customer receives a direct value for the work performed. As I intend to be in business a long time, my quoted price is automatically my "best price" as I build my business on steady repeat profit from my customers and could not survive on one-time windfalls.

May not be the exact words, but you get the idea. Right from the start I take negotiation off the table.
The customer understands that I know what Im doing.

I explain to them that we can ALTER THE SPECS any way they want to ALTER THE PRICE.

That approach almost always works with REAL decision makers.

A national clearing house doesnt care about any of that. They know they only have the contract for a short time and want to maximize the profit they can squeeze out of it before its gone.

So you being reputable, long standing, qualified, financially secure, stable.......None of that means anything to the nationals. Its pointless to think it does.

They care about.....Who can pull this off THIS YEAR and stick the most amount of money in OUR pockets cause we may not have the chance next year.


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## big acres (Nov 8, 2007)

procut1;864925 said:


> Dropping a price while not dropping a service says to your customer "I was trying to rip you off"
> 
> I explain my pricing to my customers this way:
> 
> ...


I like this approach, HOWEVER, I will state that if they really like our service plan and would like to work with us, I MAY consider being a LITTLE felxible on if... IF they are willing to talk with me about their actual budget numbers and nearest bid AND allow me to review to assure that it is apples to apples.

When I am able to get this dialogue going, I can often find the hidden stuff in the other bids which makes ours look like a better and more honest bid.


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## jd10477 (Nov 11, 2008)

We should start a cooperative like the national buyout cooperative. Instead of putting money in to buy up mega dairy's, The money should be used to hire professional salesmen to sell to the national chains like Wal-Mart. Then the members of the cooperative could bid on sites in their region. This could also give members more buying power when buying salt, trucks, or anything else they need. At the end of the year the profit's would go back to the members.
The sales team could bring a briefcase full of cash and the best looking hookers money can buy to the sales call to help seal the deal.
All joking aside would anyone want to start something like this?


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## big acres (Nov 8, 2007)

jd10477;866940 said:


> We should start a cooperative like the national buyout cooperative. Instead of putting money in to buy up mega dairy's, The money should be used to hire professional salesmen to sell to the national chains like Wal-Mart. Then the members of the cooperative could bid on sites in their region. This could also give members more buying power when buying salt, trucks, or anything else they need. At the end of the year the profit's would go back to the members.
> The sales team could bring a briefcase full of cash and the best looking hookers money can buy to the sales call to help seal the deal.
> All joking aside would anyone want to start something like this?


Do I hear an echo????

I floated the co-op idea a couple of times and besides a few flames, nobody either A) had a clue about the concept. or B) cared to discuss it.


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## Mark Oomkes (Dec 10, 2000)

big acres;867270 said:


> Do I hear an echo????
> 
> I floated the co-op idea a couple of times and besides a few flames, nobody either A) had a clue about the concept. or B) cared to discuss it.


I have no recollection of that. :laughing::laughing:


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## jd10477 (Nov 11, 2008)

Sorry Big Acres, didn't see your thread earlier. Co-ops have worked in many other industry's. We should start asking around in our areas, at trade shows, and seminars if anyone would be interested. Maybe then we could get more people interested. It's been a while since I last read the Rochdale principles but I do know some. I don't think very many people know what a co-op is unless they're from a rural area. The area I grew up the electric co-op is very well managed and still keeps their rates very low. We should explain how Co-ops work to those who don't know.


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## big acres (Nov 8, 2007)

jd10477;867832 said:


> Sorry Big Acres, didn't see your thread earlier. Co-ops have worked in many other industry's. We should start asking around in our areas, at trade shows, and seminars if anyone would be interested. Maybe then we could get more people interested. It's been a while since I last read the Rochdale principles but I do know some. I don't think very many people know what a co-op is unless they're from a rural area. The area I grew up the electric co-op is very well managed and still keeps their rates very low. We should explain how Co-ops work to those who don't know.


I used to work with co-ops quite a bit...

Basically, if you took an organization that provides a service to itys members -like SIMA, where members pay dues to cover operations costs.

Established criteria for membership that eliminates national clearinghouses and unethical types... the cause here would be fairly tying in the little guy into a strong national organization where he could offer services with the economy of scale behind him.

As you said, hire a couple of salespeople to sell national accounts against big maintenance.

Establish a fair way to split up business.

and yes, profit sharing, BUT only a percentage. (now I'm in for it)


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## Tony Bonventre (Feb 11, 2004)

*RE Kinddle*

So Have we changed or fixed anything yet.


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## jb3nh (Jul 15, 2008)

I've been floating the small guy co op idea around my neck of the woods for a little while now.. i think pooling resources, is a good idea, especially when it comes to advertising.. I just applied to the BBB for this year and... I'll get back with you all, and letcha know how that turned out. But, what impressed me was that they had an on-staff person to deal with mediation. I think it would be cool to have chapters (leather jackets optional) and start pooling resources. What we do isn't for everyone. In numbers we we could gain some leverage and earn some perks.


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## Mike Nelson (May 18, 2001)

I believe the answer would be YES for some, as mother nature provided the snow!


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## elite1msmith (Sep 10, 2007)

I would like to see this industry turn into more along the lines of the commercial consturction industry, with respect to work and bidding process

in snow, your bidding agaist who knows, with littel guys and big guys alike, soem with no insruance, some with no taxes, some with a truck built in the 80's. some are bidding it seasonal , others per push, some per ton, others per appication, then after its all worked out and you push the snow the manager comes out and yells thats where he wants it.

I have tried to gear my contracts to handel situations like this before they happen, but its hard to catch them all

in the construction industry, they send out a bid packet to qualified contractors. IT has the entire scope of work, insurance requirments, how they want to pay for the service, staging areas, where material (snow) should go.... then it is sent out. If an erroe is cought on the specs, they have an addentum, and ALL the bidders get a copy of it, so they all are recieving the same information and can bid fairly.


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