# Cost Analysis



## Rampart Ranger (Oct 18, 2006)

I keep seeing folks lowballing bids, and others requesting subs for less than I think a fella can make a living at ($65-75 per hr for truck, plow, operator).

Subs - IF you can actually work for these rates...
Contractors - IF you can actually run your own equipment and pay your own people at these rates...

Please post a cost analysis justifying this!


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## 06 F-150 4x4 (Dec 5, 2006)

Rampart Ranger;328298 said:


> I keep seeing folks lowballing bids, and others requesting subs for less than I think a fella can make a living at ($65-75 per hr for truck, plow, operator).
> 
> Subs - IF you can actually work for these rates...
> Contractors - IF you can actually run your own equipment and pay your own people at these rates...
> ...


I hate to tell you this but around our area in mount pleasant michigan all the plowing contractors charge around $70/hour/operator/truck and still we seem to make money. probably not as much as you but in our area there are many people competeing against one another for plow jobs.


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## carcrz (Jun 5, 2006)

$75 an hour as owner/operator. I am making good money and definitely a profit after the truck payment, but like anything else I always end up wanting more payup


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## Rampart Ranger (Oct 18, 2006)

That's fine, guys. If you can justify those rates...

I still haven't seen the proof - NUMBERS - including all costs.

To work for less than cost...


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## hickslawns (Dec 18, 2004)

Costs are what you make them. How do you know what everybody else's costs are? No offense, but I would never plow in your 02 Stroke with an 8.5 MVP plow. You probably get more snow than we do also. I have one 03 Chevy (truck payment $120/month) with an 8.5 Meyer straight blade (paid for) and the rest of my trucks are 20+ years old and paid cash for them. All 7 plows and 4 spreaders paid for in cash. 2001 Honda Fourman with plow paid for. Snow blowers paid for. Liquid de-icing units paid for as we built them. Keep in mind we do maintain them all well, but our costs are much cheaper. Just bought a (rebuilt) brake caliper for one truck today for $15. How much is the brake caliper on your truck? Buy a new truck at $30k+, with new blade at $3k-6k and pay $3/gal gas, insurance, payroll, etc. and I don't think you could make it on $65/hour in our area. Maybe in areas with major snow, but not with an average of only 5 snows over 2" in our area. Minimal truck payments for me, dependable equipment, lower repair costs, most repairs done in house, and good preventative maintenance is how we do it. As far as the new trucks and blades plowing for $50-60/hr I do agree with you. When you build your own liquid de-icers, fabricate your own skidloader plows, and make your own repairs it helps. Basically what I am saying is dependent upon other people's locations, amounts of snow, range of accounts, capital outlay, and other related expenses being known by you, I do not believe you can accurately make a blanket statement judging what people on here charge. By the way, a lot of guys like to expand on the truth. Some of them may make less, some may make more, many do not honestly know what their expenses are or what a profit and loss statement is. Many others do, and do well at the hourly rates they mention. It is up to you to wade thru the quagmire of internet opinions.


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## rgrimes945 (Oct 22, 2006)

*At Last*

Hi There,
Someone that is looking at plowing thru my eyes! I have done the same thing using older Chevy GMC trucks w/ Fisher plows and Henderson salters we only use them a very few times a year but when it snows I become VERY popular in the area I'm in. I'd be interested in how you did your brine solution machie, thats my next years project. A few pics and maybe some pricing for that aspect of the business. Hicks I commend you on the approach you have taken to cut costs.

Ray Grimes


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## Rampart Ranger (Oct 18, 2006)

Hicks,

It is not my intention to offend, or to judge.

You are correct in that every operation will have varying costs.

I am simply trying to point out that ALL equipment (paid off or not) must at some point be repaired/replaced. Long term cost analysis will provide for not only repair, but replacement - plus ALL other costs such as fuel, maintenance, labor (GOOD help is hard to keep on poor wages), materials, insurance, advertising, taxes, etc.

If pricing does not cover all of this, and provide for a reasonable profit - one is pursuing a hobby, not operating a business. Or perhaps one is using snow removal as a "loss leader" or a tax write off for one's primary business.

As I said, no offense intended. I just wonder how some folks manage (maybe they are just better managers than I).


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## framer1901 (Dec 18, 2005)

This hourly rate bugs the crap outa me. Our area is low as compared to others and we'd always like to make more. But just say:

25% of a 30,000 truck over 5 years = 1500
100% of 4,000 plow over 5 years = 800
maintainence = 750
Fuel = this would vary by number of events
Insurance = 25% of the yearly policy = 250
I'm sure I missed other things

What it comes down to is the number of EVENTS divided by costs. 

The thing is guys that plow ten times per year are gonna charge more than guys that plow 20 times per year, not twice as much, but definetly more.


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## LLM Ann Arbor (Sep 18, 2006)

$60.00 an hour x 9 hours of work each event for a 2 inch snowfall = 540 
$ 300 of my own work.
Thats a total of $840 per basic event for 10 hours work.

Thats $84 dollars an hour

Insurance on my truck costs me 3 dollars a day or 12 cents an hour

My truck burns 3 gallons per hour or less when plowing...lets call it $10 an hour.

Truck pmt $50.00 a week,,,without getting in to amortizing

Insurance for the business is 100 a month or 23 dollars a week or 3.33 per day.

If it snowed once a week Id make 840 -30(fuel) - 23 (bus ins) - 23(truck ins) - 50 (truck pmt) = $714 for 10 hours work which is obviously 71 dollars an hour.

How is that not profitable?

If it snowed three times a week I wouldnt have to work in the summer.

If it doesn't snow I go broke.


Let it Snow.


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## LLM Ann Arbor (Sep 18, 2006)

And remember guys....theres 4.3 weeks in a month.


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## bigjeeping (Aug 15, 2005)

I think it's fair to say we all have different pricing strategies and what may work for one person may not work another... but one thing is for sure: we are all getting paid pretty good for sitting in a toasty truck and playing in the snow!


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## jcesar (Sep 14, 2006)

Hey 06 f150....
Where in Mt pleasant are you getting 70 per hour? I want a job I am gonna have to argue that point!!
That is why I dont plow in Mt Pleasant, which is 20 min from me


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## Snowman19 (Sep 30, 2006)

Around here subs will jump at $50-75 and hour.


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## Rampart Ranger (Oct 18, 2006)

Gents here is the point!

While costs WILL VARY from place to place, the idea is the same. One MUST RECOVER COST PLUS MAKE A REASONABLE PROFIT TO STAY IN BUSINESS!

Those who do not calculate and charge for ALL costs + profit are contributing to running us all out of business. For your own sake, and mine, CHARGE THE ACTUAL COST OF DOING BUSINESS + 10-20% PROFIT.

Else we all go broke!


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## LLM Ann Arbor (Sep 18, 2006)

Rampart Ranger;332130 said:


> Gents here is the point!
> 
> While costs WILL VARY from place to place, the idea is the same. One MUST RECOVER COST PLUS MAKE A REASONABLE PROFIT TO STAY IN BUSINESS!
> 
> ...


You need a new calculator. If I marked up 10 to 20% Id be subbing for 15 dollars an hour and doing resis for lunch money.


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## Runner (Jul 21, 2000)

LLM Ann Arbor;331997 said:


> $60.00 an hour x 9 hours of work each event for a 2 inch snowfall = 540
> $ 300 of my own work.
> Thats a total of $840 per basic event for 10 hours work.
> 
> ...


One thing you have to figure though, is that you are paying insurance on your truck on not just those weeks you are plowing,...so that all has to be averaged in. Also, your business insurance,...is the same thing. Then, there is your truck payment. The fuel,...all you would figure their, is the amount over and above what you would normally use...in otherf words, just what you use while plowing. So, if you are going to break those down into a single weeks portion, you also have to take your plow events, total those, and divide THOSE by 52. THIS will give you a better idea of your costs, gross, and net.


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## LLM Ann Arbor (Sep 18, 2006)

Yeah but I also do full service lawn care as well.

So....the trucks theoretically in use all year, except that it wont snow to save my butt.


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## bterry (Oct 30, 2003)

The biggest thing that some people here are missing, yet LLM and others have eluded to, is that roughly 95% (or more) of the people that plow snow are doing it with thier personal vehicle. They still need to make the truck, personal vehicle insurance, and maintenance payments anyway. 

So the only things that should be included are those directly related to work plowing. IMO those things would be gas, alittle extra maintenance, and cost of the plow:
Plow - $4000/5yrs/10 storms/10hrs per storm = $8/hr
Maintenance = $700/yr/10 storms/10 hrs per storm = $7/hr 
Gas = $10/hr (LLM's number)

Total = $25/hr
Sub at even $50/hr
Profit = $25/hr, I know a few people that would be pretty happy with this.

For those (like myself) who's business buys the vehicles - it's an entirely different story.


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## LLM Ann Arbor (Sep 18, 2006)

Honestly I dont figure my vehicle costs. Thats the first time I really have. Fire away. But i dont go by the add up your vehicle costs and add a certain percentage on top.

I charge basic industry average standard prices, and with that I know the profit will be great if the work is done and there. Right now my profit is lower than Id like because the work isn't there and I know Im getting beat up without actually doing the math, and in summer its lower than I want because as a 1 year old company (Sole Prop) my plate isn't full.


But if you figure costs and add a specific percentage it better be like 1000 percent, or like I said.....youll be doing snow for lunch money. Lawns basically the same although there are additional expenses in Lawn....its actually more expensive to do, and the average basic industry standard is lower. I do figure my Fertilizing/Weed control prices a little closer using my price and a certain percentage but really....again. I charge what the market will bare and know the profits there.

Thats why theres a lot here that do snow only and dont mess with time consuming labor intensive equipment prohibitive lawn care.(mowing)

But without doing math. I know that Ill make good money once the plate is full and the snow flies.


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## bigjeeping (Aug 15, 2005)

When cornered: stick to your guns and calculate rates based on $300/hour.

5 minutes of plowing (e.g. 1 drive) = $25


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## ECS (Nov 11, 2005)

....................................................


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## tjlands (Sep 29, 2005)

Rampart Ranger;328298 said:


> I keep seeing folks lowballing bids, and others requesting subs for less than I think a fella can make a living at ($65-75 per hr for truck, plow, operator).
> 
> Subs - IF you can actually work for these rates...
> Contractors - IF you can actually run your own equipment and pay your own people at these rates...
> ...


Are you saying that me paying a sub $75 an hour to work for me is bad. My accounts my business my reputation.

My employees that drive my trucks make $30-40 hr.


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## WINTER 3 (Aug 7, 2000)

I think some of you guys are missing some of your expenses. I haven't seen anyone talk about paying themselves, or recouping any of your expenses that aren't storm related (rent, electric, advertising, repairs & maint, ect). Just my 2 cents but a good accounting program will help you see all of your costs.

I'm not an expert by any means. I plan that I won't plow any snow. My budget is set from spring/summer/fall. To set pricing i use my summer overhead recovery number + direct costs (gas & materials) + profit, and for some customers (ding dong factor).


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## Superior L & L (Oct 6, 2006)

WINTER 3;341713 said:


> My budget is set from spring/summer/fall. To set pricing i use my summer overhead recovery number + direct costs (gas & materials) + profit, and for some customers (ding dong factor).


We do the same that way snow is all gravy


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## Rampart Ranger (Oct 18, 2006)

tjlands;332478 said:


> Are you saying that me paying a sub $75 an hour to work for me is bad. My accounts my business my reputation.
> 
> My employees that drive my trucks make $30-40 hr.


No, what I'm saying is that if the sub's expenses + profit are greater than what you pay, the sub should ask for more.

OR

If your cost + profit is greater than what you charge, you should charge more.

I simply do not see how anyone can put plow to ground (and make a profit) for the rates some are getting.

If I don't plow, it costs me nothing. If I do plow, I charge enough to make it worth my effort.


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## Superior L & L (Oct 6, 2006)

A roofer or someone has a 4x4 and is laid off for the winter. Goes and puts a plow on his truck and make $50-$70 per hour. The dude already has the truck payment so he just needs to pay for the plow and gas. Thats good money to me. He doesnt have to find accounts, pay for my building, water, heat, taxes, phones, offfice help, yellow page ad, cleaning lady, etc, etc, etc


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