# The Golden Mean



## icudoucme (Dec 3, 2008)

Hi Every,
I have no idea what I am doing. I know where I am, and I know where I want to be, I just don't know how to get there. I have a small snow removal company that does well.(fair pricing, quality work, profitable). I am to the point where I need to bring in outsiders(no relation or personal knowledge of that person). I really don't want to. I worked as a manager for one of the areas largest snow removal companies and saw first hand how being a big fish can be alot more trouble then it's worth. 

I currently plow 12 accounts with total acreage of about 10 acres and they are all full service(plow, shovel, Ice melt, salt) . That is all I can responsibly handle. In addition to the snow removal I manage my family's business and help my brother with his. (family first!) I really love and enjoy snow removal. I have ever since I could walk. I ideally would love to land one contract that takes care of one large site versus 12 meduim sites, however to take care of the one large site, I would need to either hire a subcontractor to handle parts or hire a crew. I really don't want to hire a crew. I am struggling with finding the happy medium of work and profit. I do what I can to minimize my headaches and think hiring unkown persons causes more headaches then profit margin allows. 

My question is have any of you found your golden mean, and if so how did you find it? (was it planned or was it trial and error? Where you a large company (over 4 Million a year) and scale down? or did you say this is how much I want to do and that was that.


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## Philbilly2 (Aug 25, 2007)

icudoucme said:


> Hi Every,
> I have no idea what I am doing. I know where I am, and I know where I want to be, I just don't know how to get there. I have a small snow removal company that does well.(fair pricing, quality work, profitable). I am to the point where I need to bring in outsiders(no relation or personal knowledge of that person). I really don't want to. I worked as a manager for one of the areas largest snow removal companies and saw first hand how being a big fish can be alot more trouble then it's worth.
> 
> I currently plow 12 accounts with total acreage of about 10 acres and they are all full service(plow, shovel, Ice melt, salt) . That is all I can responsibly handle. In addition to the snow removal I manage my family's business and help my brother with his. (family first!) I really love and enjoy snow removal. I have ever since I could walk. I ideally would love to land one contract that takes care of one large site versus 12 meduim sites, however to take care of the one large site, I would need to either hire a subcontractor to handle parts or hire a crew. I really don't want to hire a crew. I am struggling with finding the happy medium of work and profit. I do what I can to minimize my headaches and think hiring unkown persons causes more headaches then profit margin allows.
> ...


Ha... funny story about that...

My golden egg was getting out of snow removal...


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## icudoucme (Dec 3, 2008)

Philbilly2 said:


> Ha... funny story about that...
> 
> My golden egg was getting out of snow removal...


What do you do for non winter work? Or do you have another type of business/employmemt year round?


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## Philbilly2 (Aug 25, 2007)

icudoucme said:


> What do you do for non winter work? Or do you have another type of business/employmemt year round?


Another type of business.

I will explain more when I am not on my phone sitting at hooters. 

Niches... that is where this story starts... niches.


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## Mark Oomkes (Dec 10, 2000)

So you want to put ALL your eggs in one basket?


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## BossPlow2010 (Sep 29, 2010)

Philbilly2 said:


> Another type of business.
> 
> I will explain more when I am not on my phone sitting at hooters.
> 
> Niches... that is where this story starts... niches.


First things first, get out of hooters the food sucks!
Tilted kilt is far better... :waving:



icudoucme said:


> Hi Every,
> I have no idea what I am doing. I know where I am, and I know where I want to be, I just don't know how to get there. I have a small snow removal company that does well.(fair pricing, quality work, profitable). I am to the point where I need to bring in outsiders(no relation or personal knowledge of that person). I really don't want to. I worked as a manager for one of the areas largest snow removal companies and saw first hand how being a big fish can be alot more trouble then it's worth.
> 
> I currently plow 12 accounts with total acreage of about 10 acres and they are all full service(plow, shovel, Ice melt, salt) . That is all I can responsibly handle. In addition to the snow removal I manage my family's business and help my brother with his. (family first!) I really love and enjoy snow removal. I have ever since I could walk. I ideally would love to land one contract that takes care of one large site versus 12 meduim sites, however to take care of the one large site, I would need to either hire a subcontractor to handle parts or hire a crew. I really don't want to hire a crew. I am struggling with finding the happy medium of work and profit. I do what I can to minimize my headaches and think hiring unkown persons causes more headaches then profit margin allows.
> ...


I don't think it's wise to only have one account, even if it is a large account.

What happens when another company undercuts you and you lose the contract; now you're screwed and you won't have a very profitable winter.

Now that isn't saying you can't improve your route by significantly cutting down drive time.

Perhaps you could get a local box store as well as the other small businesses around it, you'll cut down on drive time and increase efficiency.

It's similar to having all per push contracts or all seasonals, if you have a good winter (more snow) you'll be screwed, if you have a bad winter you'll get screwed with per push. 
Again, there's many choices you will make in this business but only plowing one account isn't a smart one.


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## Philbilly2 (Aug 25, 2007)

Mark Oomkes said:


> So you want to put ALL your eggs in one basket?


I have seen that blow up in quite a few guys faces threw the years...


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## John_DeereGreen (Jan 2, 2011)

There is no way in hell I would have only 1 snow account if it was something I was relying on for revenue.

That's like playing the lottery for a retirement strategy. It might work, but it still isn't smart.

And bigger isn't always better.


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## BUFF (Dec 24, 2009)

Philbilly2 said:


> I have seen that blow up in quite a few guys faces threw the years...


I'm a big believer one customer shouldn't represent more 15% of your business, 10% is a better ratio to but there are those times when you have to go higher. It doesn't matter how loyal you think they are, they can drop you at anytime.


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## Randall Ave (Oct 29, 2014)

All your eggs in one basket, bad idea. Been there in a different business. Usually doesn't end well. If you have to, hire good people. I Know, easier said than done.


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## Philbilly2 (Aug 25, 2007)

So back to the story.

I was in the race to the bottom with all the other guys trying to have a johnson competition. Doing the Wal Mart, Target, Box Store Horse Hockey. I got bigger and bigger into snow, but my margins were not getting better as I got bigger so what was the point of getting bigger and having more and more headaches for the same margin.

Plowing snow was a substitute winter work when construction slowed.

So my accountant sat me down one day and pretty much said "Look, you could close the doors from December to March and as your accountant, I would advise it." 

So we found a bit of a better avenue doing service at hospitals, schools, etc to keep busy during the down time for construction.

So this is what made me get out of snow removal which in turn made our snow services turn into kinda a specialty item. When my regular customers that are serviced threw my company need help, they call me. They have no problem paying a premium just to get out of the jam that they are in. To their bosses, it looks like nothing ever went wrong, and we all go on with day to day business as usual.

If I don't plow 1 inch of snow in a season, I do not loose any money. If we actually have to go out a play in the snow, we get payed very well to do so.


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## icudoucme (Dec 3, 2008)

that sounds like where I want to be. Thanks! I wasn't sure if anyone on here has actually gone threw that(starting small getting big then scaling back. I don't want to be big. After thinking about it and reading the other post. I never thought about it as putting all my eggs in one basket. Just thought of it as consolidating resources. I agree with you, that its better to have a few good accounts then alot of "big brand" stores. (unless its economically sound)


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## icudoucme (Dec 3, 2008)

Mark Oomkes said:


> So you want to put ALL your eggs in one basket?


Thanks I never thought of it like that.


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## Philbilly2 (Aug 25, 2007)

icudoucme said:


> that sounds like where I want to be. Thanks! I wasn't sure if anyone on here has actually gone threw that(starting small getting big then scaling back. I don't want to be big. After thinking about it and reading the other post. I never thought about it as putting all my eggs in one basket. Just thought of it as consolidating resources. I agree with you, that its better to have a few good accounts then alot of "big brand" stores. (unless its economically sound)


Oh... I wanted to be big time in snow... I dreamed at one time of a snow only shop...

I just could not get a business plan to work to do so.

There are guys who have done and do so, I just was not able to do so with my day to day operations. Thumbs Up


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## icudoucme (Dec 3, 2008)

Philbilly2 said:


> Oh... I wanted to be big time in snow... I dreamed at one time of a snow only shop...
> 
> I just could not get a business plan to work to do so.
> 
> There are guys who have done and do so, I just was not able to do so with my day to day operations. Thumbs Up


Yeah that is my issue too. My other business (familys)supports more people and has been around for 40 years. There is no way I can slack on that. Thanks again.


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