# NO SNOW--Do you Charge



## coastaldc (Jun 27, 2006)

I am wondering if other contractors build a clause into their per push contracts that protect them when there is no snow for a period of time.


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## grandview (Oct 9, 2005)

Yes,it's called seasonal contracts.


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## snowguys (Jul 26, 2006)

no you dont get paid its per push not season


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## swtiih (Nov 30, 2008)

yes seasonal does help when snow is light


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## 2COR517 (Oct 23, 2008)

I really hope you're kidding...


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## grandview (Oct 9, 2005)

He's figuring in reverse, Guys with seasonal contracts with a cap. So he's doing per push and if it don't snow they still owe him 5 pushes per month!


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## NickT (Feb 1, 2011)

I ll take that!!!


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## 2COR517 (Oct 23, 2008)

Here's a bill for not plowing your driveway.....But I did a great job.


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## NickT (Feb 1, 2011)

I know it hasn't snowed for 6 weeks , but I was ready


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## ManorD24 (Mar 9, 2007)

I know of guys who do something similar for commercial accounts. They consider it a management or retainer fee. They charge a fee of one or two pushes and then deduct from the first time it snows. I think only once in the last 10 years have they not had a season to credit the fee towards an event.


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## Herm Witte (Jan 27, 2009)

coastaldc;1323131 said:


> I am wondering if other contractors build a clause into their per push contracts that protect them when there is no snow for a period of time.


Our per push clients pay for 12 pushes minimum. No cap. Only one winter in the thirty five years that I have been plowing was there less than 12 pushes.


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## THEGOLDPRO (Jun 18, 2006)

"So i hope you were happy with my non service, That will be $200 please"


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## CGM Inc. (Dec 15, 2008)

seasonal contract is the way to go...based on average events you really can't go wrong.


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## Mabepossibly (Dec 12, 2010)

Hang on, I gotta go pay McDonalds for the big Mac I could have ate.


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## coastaldc (Jun 27, 2006)

haha, glad I could amuse some of you. Reason for asking is a few other "professionals" in the area are doing just this. Mostly in Rockland...


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## 2COR517 (Oct 23, 2008)

Companies with their name on the truck?


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## Triple L (Nov 1, 2005)

Have you ever looked at it from the customers perspective? What whould you say if you were them?


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## buckwheat_la (Oct 11, 2009)

For anyone that has a problem with a retention fee system. Don't knock it, there are advantages for the customer over seasonal pricing. Usually a retention fee is a lot lower then a monthly contract, which means if you get a light winter, the customer is paying less then if they had went seasonal and it still secures some monthly income for the contractor. It gets applied to the monthly bill anyways, and most good contractors well carry it forward for the season, so if it didn't snow in October but snowed a bunch in November, the fee you collect in October gets applied to Novembers bill. Also when we do a retention fee, we usually make it the equivalent of one push for the month and offer a minor discount for a customer who signs up with a retention amount, usually a 5% reduction on the hourly cost. It is a good alternative for customers that don't wish to do seasonal/monthly contracts.


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## buckwheat_la (Oct 11, 2009)

For everyone who is knocking retention fees, how do you deal with seasonal contracts? Do you apologize when you have no snow for a month and yet collect a check?


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## buckwheat_la (Oct 11, 2009)

Look at it this way, a retention fee is the compromise between a contractor that wants seasonal and a customer that wants per push/hourly


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## Herm Witte (Jan 27, 2009)

So, who pays for the investment of your equipment and overhead, which would be maintenance, insurance, depreciation of your investment, the fact that you are on call 24/7? Let's not even begin to talk about whose arse is online should, God forbid, a serious liability issue arise.

How often do you whine about not getting any service from your insurance company after sending in that payment?

Just sayin.

I encourage each of you following this thread to think and operate as a business whether you plow snow for an hour or two or whether you have multiple pieces of equipment out all day and night.


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## Brazytislawns (Oct 15, 2011)

Herm Witte;1323593 said:


> So, who pays for the investment of your equipment and overhead, which would be maintenance, insurance, depreciation of your investment, the fact that you are on call 24/7? Let's not even begin to talk about whose arse is online should, God forbid, a serious liability issue arise.
> 
> How often do you whine about not getting any service from your insurance company after sending in that payment?
> 
> ...


Right on! Will rust stop working if I don't charge?


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## Mustang (Feb 20, 2004)

Herm Witte;1323593 said:


> So, who pays for the investment of your equipment and overhead, which would be maintenance, insurance, depreciation of your investment, the fact that you are on call 24/7? Let's not even begin to talk about whose arse is online should, God forbid, a serious liability issue arise.
> 
> How often do you whine about not getting any service from your insurance company after sending in that payment?
> 
> ...


Amen to this! To a degree it's about what the market dictates. If everyone followed this practice we would all be in a better position. How come lawyers all get hundreds per hour when there are tons of them out there? How come plumbers get over a hundred dollars per hour with less invested in their equipment than us? They keep their market high and don't cut each other's throats.


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## 2COR517 (Oct 23, 2008)

I might be on board with a "retainer" of sorts, particularly commercial, in an area where snowfall isn't consistent. Rockland, ME doesn't fall into that category.


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## JD Dave (Mar 20, 2007)

neplow;1323771 said:


> sounds to me like some of you guys dont have the money to back yourselves. So you can't afford to go without a income.
> 
> You are probably using the upfront money to live off and fund your operation before you have done a single thing to earn it.
> 
> ...


What does affording have to do with anything? If you want me to park machinery on your property for the sole purpose of plowing your lot for the entire season then yes I want a seasonal contract or a monthy retainer. Open your eyes there are different ways of doing things and the ways vary greatly from region to region.


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## Landcare - Mont (Feb 28, 2011)

buckwheat_la;1323585 said:


> For everyone who is knocking retention fees, how do you deal with seasonal contracts? Do you apologize when you have no snow for a month and yet collect a check?


Nope. We sell our seasonal contracts as if they were insurance policies. Pay the contract amount in five monthly instalments (not in full, upfront) and we'll make sure that your staff can always get into your premises, even if the streets haven't been cleared. Insurance - pay the premium and never have a claim - no refund - maybe a small discount or no increase next year (unless there's a hurricane or flood somewhere else and they have to pay out there).

We have over $700,000 of equipment in our yard, expressly for clearing snow. We pay over $30,000 per year in equipment and contractor's liability insurance premiums; we pay over $20,000 per year in loan financing; we maintain our service premises and staff 12 months of the year; etc. etc. You're right - we can't afford to go without an income - our business is snow removal; it's not something we do as a favour to our neighbours and friends. We've been doing this for over 40 years and have watched many competitors go down the tubes when they haven't covered their butts and a big winter hits.

By the way, we have a customer base that includes companies we have worked for for over 20 years - some have never had or wanted another contractor on their premises, even when they have re-located out of our service area.


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## Pristine PM ltd (Oct 15, 2005)

We do get paid up front for all of our residential work. That's the norm, snow or not. Second payment is in January. All other stuff is net 30. 

Have fun having no income if it doesn't snow bud. Like the others have said, that isn't a way to run a business. I have alot of monthly payments no matter what happens, and I do consider myself an upstanding businessman.


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## buckwheat_la (Oct 11, 2009)

Landcare - Mont;1323802 said:


> Nope. We sell our seasonal contracts as if they were insurance policies. Pay the contract amount in five monthly instalments (not in full, upfront) and we'll make sure that your staff can always get into your premises, even if the streets haven't been cleared. Insurance - pay the premium and never have a claim - no refund - maybe a small discount or no increase next year (unless there's a hurricane or flood somewhere else and they have to pay out there).
> 
> We have over $700,000 of equipment in our yard, expressly for clearing snow. We pay over $30,000 per year in equipment and contractor's liability insurance premiums; we pay over $20,000 per year in loan financing; we maintain our service premises and staff 12 months of the year; etc. etc. You're right - we can't afford to go without an income - our business is snow removal; it's not something we do as a favour to our neighbours and friends. We've been doing this for over 40 years and have watched many competitors go down the tubes when they haven't covered their butts and a big winter hits.
> 
> By the way, we have a customer base that includes companies we have worked for for over 20 years - some have never had or wanted another contractor on their premises, even when they have re-located out of our service area.


Agreed, I look at retainers as a alternative to straight seasonal contacts. Lots of the contracts I deal with want hourly or per push, yet I like to have some income every month. What is the risk for a client to pay a retainer equal to one push, and if you drop your per hour price a bit for that security, it is win win for both.


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## Neige (Jan 29, 2008)

Herm Witte;1323593 said:


> So, who pays for the investment of your equipment and overhead, which would be maintenance, insurance, depreciation of your investment, the fact that you are on call 24/7? Let's not even begin to talk about whose arse is online should, God forbid, a serious liability issue arise.
> 
> I encourage each of you following this thread to think and operate as a business whether you plow snow for an hour or two or whether you have multiple pieces of equipment out all day and night.


Well said Herm



Brazytislawns;1323636 said:


> Right on! Will rust stop working if I don't charge?


LOL that's a great line thanks.



neplow;1323771 said:


> sounds to me like some of you guys don't have the money to back yourselves. So you can't afford to go without a income.
> 
> Its not like that at all, it takes a fair amount of money upfront before you even start plowing. Why should you be taking all the risk?
> 
> ...


They are not supporting a no snow year (where are you from by the way?) they are paying a premium so that when it does snow, their driveway or parking lot will be cleared of snow in a agreed upon time and condition. We are a snow business, that works close to 10 months a year, preparing for snow, clearing snow, and when the snow is done, cleaning, painting, and storing all our equipment. 



JD Dave;1323796 said:


> What does affording have to do with anything? If you want me to park machinery on your property for the sole purpose of plowing your lot for the entire season then yes I want a seasonal contract or a monthy retainer. Open your eyes there are different ways of doing things and the ways vary greatly from region to region.


Well said Dave, I really think that this concept is way over his head, as you will see later on.



Landcare - Mont;1323802 said:


> Nope. We sell our seasonal contracts as if they were insurance policies. Pay the contract amount in five monthly instalments (not in full, upfront) and we'll make sure that your staff can always get into your premises, even if the streets haven't been cleared. Insurance - pay the premium and never have a claim - no refund - maybe a small discount or no increase next year (unless there's a hurricane or flood somewhere else and they have to pay out there).
> 
> We have over $700,000 of equipment in our yard, expressly for clearing snow. We pay over $30,000 per year in equipment and contractor's liability insurance premiums; we pay over $20,000 per year in loan financing; we maintain our service premises and staff 12 months of the year; etc. etc. You're right - we can't afford to go without an income - our business is snow removal; it's not something we do as a favour to our neighbours and friends. We've been doing this for over 40 years and have watched many competitors go down the tubes when they haven't covered their butts and a big winter hits.
> 
> By the way, we have a customer base that includes companies we have worked for for over 20 years - some have never had or wanted another contractor on their premises, even when they have re-located out of our service area.


Bravo :salute:



neplow;1323808 said:


> They are probably holding back last payment as standard. This isn't what is going on here. What is going on here is too many in snow removal looking for a buck that are overextended and have no backing. Upfront money to cover what they should already have for funding if they are charging properly and adequatley funded to begin with. So they work around it with some creative writing.
> people doing this that can't afford to float a account and seems to want to make a buck for doing nothing. so they come up with creative writing as the solution. This has just become a problem in recent years. And moved into something closer to back door sales. i hope they all sink. The industry has already been changing so contractors are waiting for payments now and per machine/per hour became more prevalent. From some contractors playing too many scam games effecting all the industry. Next will be the crack down on fake or unnecessary billed hours and new contracts will be the norm again. But the real effect is everything is going to lower and lower bids as customers are becoming weary of it and not even throwing out the bottom bids now thinking they are getting screwed. Some guys are driving this business down the toilet. Doing a seasonal to save billing and simplicity is one thing. Broken up in fair equitable payments to both parties. Doing a seasonal to live on because you dont have any money in your accounts is something else.
> 
> Finally I agree on one of your points. Yes there are unscrupulous companies out there taking on contracts and payments, and when the first snow hits they are no where to be found. You will find these types of companies in every industry, we refer to them as crooks, scam artists. That's not what we are talking about on here, we are talking legitimate companies who are offering a contractual service for an unknown. It has been said several times already, but we are like insurance companies. If and when it does snow, we will remove it as quickly as possible, in line with our terms and conditions. There is a cost behind having this service ready and available 24/7 6 months a year.
> ...


The way you are talking, it seems more like you are the one hurting this industry. The OPs suggestion for charging a fee to be ready to deliver a service is what this industry needs. 



Landcare - Mont;1323868 said:


> No holdbacks on our commercial contracts; as a matter of fact, most of our customers pay the monthly instalment within 20 days. The ones that are habitually slow payers get reminded on a regular basis (yes, we pay office staff as well) and risk having that last big April snowfall stay in their yard if the March payment hasn't yet been made. Then there's the lawyers' fees for collection of deliquent accounts and the bad-debt write-offs for the customers that are in businesses where they can't sign seasonal contracts and go belly-up before final payment.
> 
> No holdbacks on our municipal contract either. They're all covered with performance bonds (yes, we pay bonding fees as well).
> 
> ...


It sure is expensive being legit snow contractor.



neplow;1323885 said:


> you seem defensive. Is there something i posted you feel was pointed toward you? It doesn't appear that you are taking large upfronts and overextended so why are you even responding?


Because they are a professional reputable snow contractor, that wants to see this industry get better. I am sure they feel, like I do what you are suggesting is harmful to our industry.
Sorry Landcare I should not be speaking for you.



neplow;1323905 said:


> strange to me. i ran resi on account, by the push. if the customer went over a couple months behind or a decent amount back owed we gave them a call or visit. Nothing up front. If they pay at the time great, cash is king. But it is actually quicker to have them send a check periodically than stop progress for payment. The longer term or better customers given more slack on time. Quick to jump on the unknowns and shut off service for failure of payment. But thinking of it like this. we would go up to and over possibly two months of winter without payment on resi. With some bills up to and exceeding three, four hundred each.
> 
> Wow our seasonal upfront price is $310, I am thinking my clients are getting a better deal.
> 
> ...


Clearly we do not see eye to eye. You can continue to do what you do, but do you really feel that this should be the industry standard. I sense your frustration in where this industry is going, and I share that frustration. I just don't believe that what you are suggesting, is good for the industry. Keep an open mind, there have been some very good suggestions from some very reputable companies.


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## Landcare - Mont (Feb 28, 2011)

Well done, Paul. You can speak for us any time (almost).

P.S. We use bid bonds - our $2,000 per annum bonding fee includes our annual review and "unlimited" bid bonds. The performance bonds are issued with the premium as a percentage of the contract amount.


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## Herm Witte (Jan 27, 2009)

Great comments everyone!


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## neplow (Oct 6, 2011)

Herm Witte;1324050 said:


> Great comments everyone!


yes. And two very different methodologies. interesting.

Seems it comes down to this.

neige-"Its not like that at all, it takes a fair amount of money upfront before you even start plowing. Why should you be taking all the risk?"

My opinion is we are being paid to take that risk. That is the job. Charge accordingly. Other side is take less risk, charge less.

But they do have good arguments in their favor. More steady income, less risk, less book keeping and money chasing, help with season startup costs. And some costs are year round. Running how i stated would not be as effective on a really large operation. it is to tedious and complex just keeping track of accounts which takes time. The higher profit on the per push account could be lost in the money chasing and record keeping. On the otherside for me allowing customers to run up a account may not seem wise, but allows more to be charged for each service because of the convenience and having nothing up front. it isn't as cost effective for a customer because even on a semi-light year it would be more than any flat seasonal contract. But kind of like a credit card, it is easy for them to use and they aren't paying for anything but the actual time of service. if they want to pay late there is a fee attached.

A small up front deposit wouldn't be a bad idea. Especially for new customers. Just to save money chasing later on. This is really where how i stated fails. You might charge more and offer more convenience with no money down and allowing customers to run up any account is offering a luxury to them. But collecting can be problematic and a percentage you will never receive.

i still kind of think seasonal contracts belong in commercial and not in resi. i actually tried selling seasonals once. To unload one i had to lower the price so much it wasn't worth it. And people become skeptical about any pre pay. If they owe you money they are fine with it. you owe them they are skeptical. Better off staying per push for me.


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## grandview (Oct 9, 2005)

Must be a location thing,around here people throw money at snowplow companies for a seasonal contract.But on the flip side they will only pay for lawn cutting each time,


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## Herm Witte (Jan 27, 2009)

Being in business is taking a risk, being willing to eat that risk is absurd.


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