# How do full snow companies make it?



## 94gt331 (Oct 21, 2011)

How can snow companies seriously make this buisiness a year around buisiness. With the risk of winters like this how can you survive. I'm talking about bigger companies with loaders and 20-30 trucks etc. How do u keep guys working all winter when it doesn't snow. I mean i guess you guys have contracts that u get paid wheather it snows or not. I only had to plow 1 storm so far this winter and did some ocassional salting.


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## CGM Inc. (Dec 15, 2008)

Go big or go home I would say!
Also we are not "just" getting paid to plow snow!

We carry liability, site checks, we are on 24/7 stand-by, etc.
Not the whole effort is with regards to snow amounts per season.
Just like an insurance......


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## RLM (Jan 12, 2006)

It can be tough alot of the snow only companies utilize a good many subs to spread out the risk as well, either paying them hourly or per push, some just act as a GC on the pushing & just salt only, which depending on your market may be the majority or your work anyway. I know of some that just manage the work, own nothing but a computer, etc. Everyone has their own business model which may or may not work in your market, season snowfall amount & contract structure.


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## RepoMan1968 (Jan 9, 2012)

94gt331;1440898 said:


> How can snow companies seriously make this buisiness a year around buisiness. With the risk of winters like this how can you survive. I'm talking about bigger companies with loaders and 20-30 trucks etc. How do u keep guys working all winter when it doesn't snow. I mean i guess you guys have contracts that u get paid wheather it snows or not. I only had to plow 1 storm so far this winter and did some ocassional salting.


no such thing . it's called a spinoff , enterprise , etc.,. they're call snow brokers . they try to separate you(contractor) from your $$$ b y agreeing to* their *terms .

AKA property management


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## got-h2o (Sep 26, 2008)

Seasonal accounts.


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## Brian Young (Aug 13, 2005)

CGM Inc.;1440903 said:


> Go big or go home I would say!
> Also we are not "just" getting paid to plow snow!
> 
> We carry liability, site checks, we are on 24/7 stand-by, etc.
> ...


10-4 on that! Its tough but you need to be smart. We're busier in the winter (when its snowing) but we're still out doing site checks at 3am a few times a week with the melting run off freezing up. I wish I would have kept one of our Fisher 1000's for that, its a pita when your only loading 1 ton of salt to spot salt here and there.


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## coldcoffee (Jul 17, 2008)

That's going to be the million dollar question...In my 25 years I haven't experienced a winter like this one. I know a guy who spends a 100k per month x's 12 just to keep the doors open, snow or no snow. This won't put him under, but it will be interesting to see what adjustments he makes. I know another guy w/ 2 million in bank notes...he's ready to jump off a bridge. I've heard rumors about a couple of other big outfits & it doesn't sound good.

One major problem that I've seen in the past when a season gets near the end or a mild month occurs, the reliability of subs showing becomes a big concern. The longer guys go w/o working, the more inclined they are to ride the fence, meaning going elsewhere for other work. If the plowing should happen to fit into their new work schedule they'll probably show, if there becomes a conflict w/ the two schedules the contractor often times doesn't become aware until they don't answer their phone or pages. There is usually a penalty clause in their contract for no shows, but it's not usually enough to keep it from happening.

No doubt, next season will be quite interesting...but what happens if this weather becomes a 3-5 year cycle, the opposite of what we have experienced through last year?? Time will tell.


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## RepoMan1968 (Jan 9, 2012)

coldcoffee;1440954 said:


> That's going to be the million dollar question...In my 25 years I haven't experienced a winter like this one. I know a guy who spends a 100k per month x's 12 just to keep the doors open, snow or no snow. This won't put him under, but it will be interesting to see what adjustments he makes. I know another guy w/ 2 million in bank notes...he's ready to jump off a bridge. I've heard rumors about a couple of other big outfits & it doesn't sound good.
> 
> One major problem that I've seen in the past when a season gets near the end or a mild month occurs, the reliability of subs showing becomes a big concern. The longer guys go w/o working, the more inclined they are to ride the fence, meaning going elsewhere for other work. If the plowing should happen to fit into their new work schedule they'll probably show, if there becomes a conflict w/ the two schedules the contractor often times doesn't become aware until they don't answer their phone or pages. There is usually a penalty clause in their contract for no shows, but it's not usually enough to keep it from happening.
> 
> No doubt, next season will be quite interesting...but what happens if this weather becomes a 3-5 year cycle, the opposite of what we have experienced through last year?? Time will tell.


01' '08 were write offs here 
'96 '09 '10 were phenominal $$$ 
win some , lose some . we grab a mid sized seasonal to keep it neutral


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## coldcoffee (Jul 17, 2008)

I think it was '89 or '90 we were having January temps hitting near 70*. Extreme unseasonable temps is nothing new here, but almost an entire season is. I'll be fine w/ what I have...I'll just be walking to the bank as opposed to running. It's been interesting how the market has changed over the course of time. My areas of preference, it's almost hard to even find a per push contract for the last 8-10 years or so...so I'm expecting & looking forward to some adjustment being made w/ the decision makers when it comes time for renewal.


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## RepoMan1968 (Jan 9, 2012)

coldcoffee;1440970 said:


> I think it was '89 or '90 we were having January temps hitting near 70*. Extreme unseasonable temps is nothing new here, but almost an entire season is. I'll be fine w/ what I have...I'll just be walking to the bank as opposed to running. It's been interesting how the market has changed over the course of time. My areas of preference, it's almost hard to even find a per push contract for the last 8-10 years or so...so I'm expecting & looking forward to some adjustment being made w/ the decision makers when it comes time for renewal.


keep thinking "3 yr. seasonals" keeps things regular


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## cod8825 (Feb 8, 2007)

Hopefully this mild winter will help with price point negotations next year. Maybe it will allow some of the contractors who might not be doing everything quite right and such to get out of the market and allow the prices to go back up some. Here in Kansas City I wouldn't mind if a couple of the snow only contactors were not in such a position to reduce pricing points next season.


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## Matson Snow (Oct 3, 2009)

Seasonal and All-inclusive contracts.....Saltings..In this area we have salted north of 10 times....Snowfall Insurance.....The Larger companys also play in the Derivitive Market to Hedge their bet against Snowfall....

But...All and All it has been a Pretty Crappy Winter in terms of Revenue Generation.....payup


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## 94gt331 (Oct 21, 2011)

Well it's almost the end of the season, for me anyway. I took all my plows of the trucks. Only made $4000,00 this season from only 1 storm and 3 saltings. So how did you big companys that only plow for a living make it. Well i will be hanging out in lawnsite now. See you next winter.


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## grandview (Oct 9, 2005)

If you a big snow only company you'll make enough to let the stuff sit all summer. And some of them lease the equipment so it's gone at the end of the season.


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## JD Dave (Mar 20, 2007)

RepoMan1968;1440922 said:


> no such thing . it's called a spinoff , enterprise , etc.,. they're call snow brokers . they try to separate you(contractor) from your $$$ b y agreeing to* their *terms .
> 
> AKA property management


There are quite a few snow only companies around and they own a lot of equipment and also utilize subs. It only works where you have seasonal inclusive contracts which around here are hard not to find. There is so much snow only equipment in this area that it would make your head spin.


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## scottydosnntkno (Jan 4, 2010)

A concept that is hard for many people to understand and follow is budgeting and saving. Snow is a seasonal business so you have to plan for off season and off years. 

My main business is a window tinting company which is the opposite of snow its summer seasonal. Proper planning and budgeting is key to success as well as not looking at all the income as profits. 

The snow business is not the business to put your last 5k into just because you have a truck. You need enough financial liquidy and backing to run ins fuel payments etc for at least 3yrs if you want to makr this into a career. So many new guys see the years like last year where you make a killing and want to jump in to make a quick buck. All. My accounts are per push or hourly and i did just fine on 3 pushes total. Yes i didnt "make" money this year based on what i spent but i didnt lose money as i functioned off of the business savings. I could do 4 yrs with this years lineup without making a dime and be fine, but my goal is to add one new truck with some new accouts each year. 

Proper financial planning is the key to making it in the snow business, and like i said not 100% relying on it to pay the bills the first couple years.


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## bugthug (Oct 13, 2004)

Does it snow in blair county?


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## thelettuceman (Nov 23, 2010)

I am a small 1 man operation with a small overhead. I use my truck for junk removal when it is not snowing. I am paying the bills but not making much. On the other hand, I am not ready to jump off of a bridge. I plan to stay small.


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## Neige (Jan 29, 2008)

RepoMan1968;1440922 said:


> no such thing . it's called a spinoff , enterprise , etc.,. they're call snow brokers . they try to separate you(contractor) from your $$$ b y agreeing to* their *terms .
> 
> AKA property management


Yes there is such a thing, I am one of them. We own all our own equipment, and the only work I sub out are my sidewalks, and these guys are very well paid.



scottydosnntkno;1466345 said:


> A concept that is hard for many people to understand and follow is budgeting and saving. Snow is a seasonal business so you have to plan for off season and off years.
> 
> My main business is a window tinting company which is the opposite of snow its summer seasonal. Proper planning and budgeting is key to success as well as not looking at all the income as profits.
> 
> ...


That is some good advice, but I must admit I do not understand the concept of only charging your clients on a per push, per inch, or hourly. This would make sense if you have no contracts with these people and they call you out of the blue for a service call. There is no commitment from either side, and it will get done when the contractor has time. But as soon as you have a contract, that stipulates you have to clear every time at a predetermined trigger, and it needs to been done by a predetermined time, how can you not have a minimum charge for this? As a contractor you are now committed to have the proper equipment, personnel, insurance, .....etc, ready 24/7 for at least 150 days ( our contracts are for 180 days) There are real everyday costs involved to have this in place, our costs are just under 5 grand a day. That's right its going to be sunny and 42 degrees today and I will have to do nothing for any of my clients, but it still cost me $4,863.10 to be ready in case we did get snow. How does it make any sense if you are contractually obligated to preform a service, and just because you were not needed it cost the client nothing. You need to have some kind of payment once you sign a contract. It can be a minimum 10 push, 10 inches, or 10 hours, kind of like a retainer for your services. You could divide it over 5 months, so that at the end of the month if you had no snow you charge 2 pushes, inches, or hours. There are many ways to do it, but at least you end up with a payment for your contractual obligations. All this to say, the only reason I am in this business is being all seasonal.


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## CGM Inc. (Dec 15, 2008)

Well said! Must be a canadian thing with the contracts


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## RLM (Jan 12, 2006)

Paul & I discussed this before and I'm sure it will be a hot topic in the upcoming months. We had more per push, and for the first time some hourly this season as opposed to seasonals, which contradicts what some might think because last season we had 130+ inches, average here is 100. Needless to say I took a pretty good hit last two seasons. At 2" we would typically push about 25 visits (plows), we have had 6 or so, and a couple of those were questionable if they were 2". Combine this with the little bit of landscape work I still do, it was either super wet last summer (to wet to work), or in a drought so nothing grew, then back to super wet. The weather has put a serious beating on us.
The worst part is those paying the seasonal price think & make comments that you made out like bandits. When in reality I had to rob money from one sites budget to cover equipment costs from another site that was per push. Like Paul said you have costs going out every day if it snows or not, that machine being on site, or at your shop avaiable to the client is a real cost. 
In the worst of the cases for us is a school district we have, we had 2 wheel loaders, a bobcat, a small loader on stand by & 3 trucks set up to service them. Their total bill so far is about 9K. After fuel & labor, I'll be lucky to cover 2-3 payments on the one loader, luckily the other stuff is paid for, that 2-3 payments doesnt cover any fixed costs (insurance, over heads, etc). It is going to make things challenging next season to sell seasonal, per trip or hourly is going up signifincantly unless they sign off on a minimum.
I'm already seeing a trickle down to the landscape numbers, guys are lowballing already, just to get the work, because after the winter we had, they are in the hole. 
It will be an intresting year coming up. I think alot of things are going to be changing in our area, guys getting out, etc. I know I have talked to my top guys, we are going to be changing a bunch of things, re-focusing & re-inventing my company, probably in 4 years it will be a different animal, the last two seasons have made it easier to make these changes. It will be pretty much the same focused on snow however.


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## cjwoz (Jan 7, 2008)

This season will weed out the low ballers and there will be tons of equipment for sale.


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## dfd9 (Aug 18, 2010)

CGM Inc.;1466518 said:


> Well said! Must be a canadian thing with the contracts


No, it isn't. Some just don't understand it. Some can't get their customers to understand it.



cjwoz;1466545 said:


> This season will weed out the low ballers and there will be tons of equipment for sale.


Same thing that is said in years where there is a lot of snow and everyone has been seasonal.

I'm not going to hold my breath.


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## Neige (Jan 29, 2008)

RLM;1466519 said:


> Paul & I discussed this before and I'm sure it will be a hot topic in the upcoming months. We had more per push, and for the first time some hourly this season as opposed to seasonals, which contradicts what some might think because last season we had 130+ inches, average here is 100. Needless to say I took a pretty good hit last two seasons. At 2" we would typically push about 25 visits (plows), we have had 6 or so, and a couple of those were questionable if they were 2". Combine this with the little bit of landscape work I still do, it was either super wet last summer (to wet to work), or in a drought so nothing grew, then back to super wet. The weather has put a serious beating on us.
> The worst part is those paying the seasonal price think & make comments that you made out like bandits. When in reality I had to rob money from one sites budget to cover equipment costs from another site that was per push. Like Paul said you have costs going out every day if it snows or not, that machine being on site, or at your shop avaiable to the client is a real cost.
> In the worst of the cases for us is a school district we have, we had 2 wheel loaders, a bobcat, a small loader on stand by & 3 trucks set up to service them. Their total bill so far is about 9K. After fuel & labor, I'll be lucky to cover 2-3 payments on the one loader, luckily the other stuff is paid for, that 2-3 payments doesnt cover any fixed costs (insurance, over heads, etc). It is going to make things challenging next season to sell seasonal, per trip or hourly is going up signifincantly unless they sign off on a minimum.
> I'm already seeing a trickle down to the landscape numbers, guys are lowballing already, just to get the work, because after the winter we had, they are in the hole.
> It will be an intresting year coming up. I think alot of things are going to be changing in our area, guys getting out, etc. I know I have talked to my top guys, we are going to be changing a bunch of things, re-focusing & re-inventing my company, probably in 4 years it will be a different animal, the last two seasons have made it easier to make these changes. It will be pretty much the same focused on snow however.


Hey Mike, yes we have had this conversation before, and I hope we continue talking about this serious problem in our industry. I have taken a lot of flack about seasonal contracts not being fair to the client on a low snow year. Now I understand this coming from my clients, and its my job to educate them. But I get this comment often from other contractors in our industry. If we the snow contractors don't understand the costs of offering our services to our clients then we have a long ways to go. 



cjwoz;1466545 said:


> This season will weed out the low ballers and there will be tons of equipment for sale.


How is that, if they low balled seasonally they still made money, and if the low balled per push, inch, or hour, they did not lose much money.



dfd9;1466548 said:


> No, it isn't. Some just don't understand it. Some can't get their customers to understand it.
> 
> I agree, and would like to add that some customers understand it very well, just wont admit it because its 100% to their benefit.
> 
> ...


There is some interesting reading here http://goplow.com/blogs/operations-blog/seasonal-contracts-in-a-low-snow-year.html


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## dfd9 (Aug 18, 2010)

Neige;1466564 said:


> There is some interesting reading here http://goplow.com/blogs/operations-blog/seasonal-contracts-in-a-low-snow-year.html


Good read.

Although he may want to check some weather facts. The last few years have not been El Nino. Not trying to nitpick but accuracy is a good thing.

http://ggweather.com/enso/oni.htm

I'm pretty sure that just when the scientists thought they had El Nino and La Nina figured out, the good Lord decided that at that point in time He would throw a wrench into it and just the opposite of what they predicted would happen. As in this year, with a La Nina, it is supposed to be colder, more snow etc. Just the opposite.

http://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/ensodisc.html


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## Landcare - Mont (Feb 28, 2011)

We are, and have been for 40-odd years, 100-percent seasonal contract. Our municipal and school board contracts are all done by sealed-bid tender and our past service and the previous seasons' weather doesn't count for anything in those cases, unfortunately.

Our commercial contracts generally include the clearing and piling of the snow on the customers' properties. Salting is quoted on an 'as-required or on-call' basis at a per-tonne rate and any extra work, such as hauling snow to a dump, etc., is on a "per-hour" charge for each piece of equipment required in most cases. Obviously, this year, the extra charges are almost non-existent.

Yes, this year, we are making a fair amount of profit; however, we have a fair amount of overhead and setup costs. We have our own office/garage facility with full-time staff and communications; we carry $5 million contractor's and liability insurance; we pay license/registration fees for 25+ pieces of equipment; we make about $10,000 per month equipment loan payments 12 months of the year in order to have the best equipment available to service our customers. Etc., Etc. Etc.

We are a real business - our customers understand that and they know that we will be there to keep their companies open no matter the weather. We ask for an increase almost every year and many of them ask for the status quo. There are negotiations, most successful, some not and we carry on.

Our customers realize that signing a snow-clearing contract for the season is very much like carrying insurance - you hope you never have to use it but are really glad it's there when you need it.


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## thelettuceman (Nov 23, 2010)

I am reading all of this with much interest. I am in shock at the overhead some of you have. Yes, you do need seasonal contracts to keep yourself in business.Being 1 man, 1 truck and 1 plow, my business model is different than yours. I could not take on the scope of work you do because I do not have the equipment. After the season is over, some clients that have signed contracts may be looking at a per push agreement. This is how I operate. I am the opposite of you and for good reason; if my equipment breaks down, I do not want to be legally obligated to have the snow removed from a property. I do not have anything signed. This is all done by verbal agreement.

Having said all the above; I would expect much disagreement. Please note that all of this is said with much respect and not to knock your method of operation.


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## RLM (Jan 12, 2006)

So if I get this right thelettuceman, if your truck breaks down, you just leave your clients hanging ?, no backup/plan B, at least an call abc snowplowing they will help you ? And you just get a peaceful nights rest ? If we did that I would have a client list/reputation that has taken 15 years to build up be destroyed and have to start over. We have bailed out other smaller contractors in the past only to get burned (not paid) or even so much as a courtesy thank you in one case, needless to say, they are not on my "don't solict their account list". On the flip side we had an issue with our salter (and of course the second I never fixed), so I had another contractor do it, as soon as I could get a price out of him(took Jim a couple days), his check went out, I appreciated the fact he helped me out (even though they used (or billed me for)twice the salt I ussally do).


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## fordzilla1155 (Jan 10, 2004)

Know what your cost and overhead is for all 12 months. Own all your equipment and live within your meens. Bid jobs to turn a Prof it,and have a rainy day or year account.


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## peteo1 (Jul 4, 2011)

thelettuceman;1467219 said:


> I am reading all of this with much interest. I am in shock at the overhead some of you have. Yes, you do need seasonal contracts to keep yourself in business.Being 1 man, 1 truck and 1 plow, my business model is different than yours. I could not take on the scope of work you do because I do not have the equipment. After the season is over, some clients that have signed contracts may be looking at a per push agreement. This is how I operate. I am the opposite of you and for good reason; if my equipment breaks down, I do not want to be legally obligated to have the snow removed from a property. I do not have anything signed. This is all done by verbal agreement.
> 
> Having said all the above; I would expect much disagreement. Please note that all of this is said with much respect and not to knock your method of operation.


I am simply amazed that you have customers. If I hired someone to plow my driveway/parking lot and they didn't show their services would no longer be required. I'm not knocking you but this really just surprises me. I hope for your customers sake you have some sort of backup plan.


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## Neige (Jan 29, 2008)

thelettuceman;1467219 said:


> I am reading all of this with much interest. I am in shock at the overhead some of you have. Yes, you do need seasonal contracts to keep yourself in business.Being 1 man, 1 truck and 1 plow, my business model is different than yours. I could not take on the scope of work you do because I do not have the equipment. After the season is over, some clients that have signed contracts may be looking at a per push agreement. This is how I operate. I am the opposite of you and for good reason; if my equipment breaks down, I do not want to be legally obligated to have the snow removed from a property. I do not have anything signed. This is all done by verbal agreement.
> 
> Having said all the above; I would expect much disagreement. Please note that all of this is said with much respect and not to knock your method of operation.


Wow lettuceman I appreciate your honesty. Even you as a 1 man show, have costs to preform the work that you verbally agreed to. Now I understand you do other work with your truck year round, so I assume you don't consider your truck as an expense for doing snow work. Fair enough, I even understand it if you don't. (I used to think that way with my summer trucks also) Now your plow is another story, if it works or not it is depreciating in value. Then there is insurance, advertising, estimating, and any other product or equipment needed for snow clearing (salt spreader, salt, shovels, maybe even a snow blower...etc). Do you stake your clients? (cost time & money) Got to pickup your stakes in the spring, with at least 20% of them missing or broken. Prestorm equipment checks, after storm equipment checks and repairs. Then you may have some property damage to repair the few times you went out. How many times in the year do you get up at night when they are calling for snow, and see that they were wrong with the forecast. (I will get up at least 3 times anytime they forecast even a dusting) Then there are the times you need to get in your truck at 3am and drive to your sites to see if the trigger has been met. If it has not but its still snowing, then you sit in a 24 hr coffee shop to wait and see if and when your trigger is met. Do you pay yourself something for this time? There is so much time that goes into snow, other than the real plowing time. You may have only really plowed 30 hours( total guess) this year, but how many other hours did you put in overall for your snow business? I for one will not work for free, I will not be available 24/7 for 180 days for free. That is why I find it so unfair for the snow contractor to get paid per push, with no minimum pushes. 
Thanks again for your honest post, I respect (don't agree) with you, and hope, maybe you will come away with a better understanding of the value of your time.


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## dfd9 (Aug 18, 2010)

thelettuceman;1467219 said:


> I am reading all of this with much interest. I am in shock at the overhead some of you have. Yes, you do need seasonal contracts to keep yourself in business.Being 1 man, 1 truck and 1 plow, my business model is different than yours. I could not take on the scope of work you do because I do not have the equipment. After the season is over, some clients that have signed contracts may be looking at a per push agreement. This is how I operate. I am the opposite of you and for good reason; if my equipment breaks down, I do not want to be legally obligated to have the snow removed from a property. I do not have anything signed. This is all done by verbal agreement.
> 
> Having said all the above; I would expect much disagreement. Please note that all of this is said with much respect and not to knock your method of operation.


You should expect much disagreement because you are the epitome of a fly-by-night plower. This attitude is so far from being close to professional, you can't even see the bottom of the barrel.

I read it last night, reread this AM to see if I was dreaming what you said.



RLM;1467272 said:


> On the flip side we had an issue with our salter (and of course the second I never fixed), so I had another contractor do it, as soon as I could get a price out of him(took Jim a couple days), his check went out, I appreciated the fact he helped me out (even though they used (or billed me for)twice the salt I ussally do).


And I would have happily paid him twice what I would have charged. Because he bailed me out, and it would have cost a whole lot more to lose those clients. I know you know this, just stating it for the rest.



Neige;1467368 said:


> Wow lettuceman I appreciate your honesty. Even you as a 1 man show, have costs to preform the work that you verbally agreed to. Now I understand you do other work with your truck year round, so I assume you don't consider your truck as an expense for doing snow work. Fair enough, I even understand it if you don't. (I used to think that way with my summer trucks also) Now your plow is another story, if it works or not it is depreciating in value. Then there is insurance, advertising, estimating, and any other product or equipment needed for snow clearing (salt spreader, salt, shovels, maybe even a snow blower...etc). Do you stake your clients? (cost time & money) Got to pickup your stakes in the spring, with at least 20% of them missing or broken. Prestorm equipment checks, after storm equipment checks and repairs. Then you may have some property damage to repair the few times you went out. How many times in the year do you get up at night when they are calling for snow, and see that they were wrong with the forecast. (I will get up at least 3 times anytime they forecast even a dusting) Then there are the times you need to get in your truck at 3am and drive to your sites to see if the trigger has been met. If it has not but its still snowing, then you sit in a 24 hr coffee shop to wait and see if and when your trigger is met. Do you pay yourself something for this time? There is so much time that goes into snow, other than the real plowing time. You may have only really plowed 30 hours( total guess) this year, but how many other hours did you put in overall for your snow business? I for one will not work for free, I will not be available 24/7 for 180 days for free. That is why I find it so unfair for the snow contractor to get paid per push, with no minimum pushes.
> Thanks again for your honest post, I respect (don't agree) with you, and hope, maybe you will come away with a better understanding of the value of your time.


There's a lot of assumptions you are making Paul. If he doesn't have a backup or a plan in place for a backup, why worry about the many, many items you list that makes your or I or anyone who cares about their customers professional companies?


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## RLM (Jan 12, 2006)

You are correct dfd9, I didn't bat an eye, or anything, as soon as he told me a price, I wrote the check and put it in the mail. Needless to say it will (or should) serve as a reminder for me to repair my extra v box that is sitting on saw horses in the shop & mount it, checked & mounte my old tailgate spreader on the fall, I also just purchased a liquid spray unit as well so next season that will be an option as well. It was no ones fault bbut my own I had to spend the extra money. Again I was just gratefull to have it done & they got it done right on time which was even better. If he ever needed anything I wouldn't hesitate to help him or any of his guys.


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## CAT 245ME (Sep 10, 2006)

peteo1;1467297 said:


> I am simply amazed that you have customers. If I hired someone to plow my driveway/parking lot and they didn't show their services would no longer be required. I'm not knocking you but this really just surprises me. I hope for your customers sake you have some sort of backup plan.


Agreed. I my self am just a one man operation, that said I own three plow trucks. If my main truck goes down then I go back home and get another one. You need a plan B and it doesn't hurt to have a plan C ether.

We had an 8" snowfall (heavy wet stuff) on February 25th, I received a call from a church close to home that said there plow guy broke down and if I could clear the property which I did, I then receive another call from another church close by that said the same thing (same plow guy) again I went and cleared that one as well. I found out the fella that broke down only had one truck (on it's last leg), a customer that lived across from him wondered why he was not out plowing even though the storm had ended six hours ago, he went over to find out about the truck, the plow guy never bothered to contact anyone, he just sat there. His customers found out from the guy across the road. Just Pathetic.


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## 4wydnr (Feb 3, 2008)

RLM;1467272 said:


> If we did that I would have a client list/reputation that has taken 15 years to build up be destroyed and have to start over.


I think you would be worse off than starting over. You would first have to dig out of the hole of a bad reputation, then start rebuilding.


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## thelettuceman (Nov 23, 2010)

dfd9;1467383 said:


> You should expect much disagreement because you are the epitome of a fly-by-night plower. This attitude is so far from being close to professional, you can't even see the bottom of the barrel.
> 
> I read it last night, reread this AM to see if I was dreaming what you said.
> 
> ...


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## grandview (Oct 9, 2005)

Here you go L-man, I'm sure you look at it the other way buy....

http://www.ehow.com/facts_7477876_verbal-agreements-binding-maryland.html


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## thelettuceman (Nov 23, 2010)

Grandview ... good link you got there. I would not put myself above the law but .... I do explain to my customers why I do not sign contracts. If someone wants to hold my feet to the fire for a $40.00 driveway snow plow removal, I might get burned.


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## peteo1 (Jul 4, 2011)

thelettuceman;1467566 said:


> dfd9;1467383 said:
> 
> 
> > You should expect much disagreement because you are the epitome of a fly-by-night plower. This attitude is so far from being close to professional, you can't even see the bottom of the barrel.
> ...


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## blowerman (Dec 24, 2007)

cjwoz;1466545 said:


> This season will weed out the low ballers and there will be tons of equipment for sale.


This type of season doesn't weed out low ballers at all! As others (Paul) have posted, easy winters don't weed out "low ballers." They have had a easy time, minimal snow, easy pushes what's the problem.

For that matter, in the event of heavy snow seasons, low ballers are guys like Neige, Fargo snow and my self. We clear snow for a set amount of money, snows and you clear a driveway 20 to 30 times, are numbers can't be beat!


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## RepoMan1968 (Jan 9, 2012)

94gt331;1440898 said:


> How can snow companies seriously make this buisiness a year around buisiness. With the risk of winters like this how can you survive. I'm talking about bigger companies with loaders and 20-30 trucks etc. How do u keep guys working all winter when it doesn't snow. I mean i guess you guys have contracts that u get paid wheather it snows or not. I only had to plow 1 storm so far this winter and did some ocassional salting.


have you done a search ? or just venting ?


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## CAT 245ME (Sep 10, 2006)

Neige;1467368 said:


> I for one will not work for free, I will not be available 24/7 for 180 days for free. That is why I find it so unfair for the snow contractor to get paid per push, with no minimum pushes.


That's an excellent comment.

Paul one of the main questions I've wondered about your residential division is how do you deal with all the parked cars that are in the driveway's after a snowfall. During the week would be easy once people leave for work but what about on the weekends or holiday's when people are in no hurry to go outside to move or even clean off the cars.


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## snorider075 (Apr 3, 2010)

cjwoz;1466545 said:


> This season will weed out the low ballers and there will be tons of equipment for sale.


We can only hope. With the blizzard last year and many low ballers dropping the ball and this year not making much we will see.


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## Neige (Jan 29, 2008)

CAT 245ME;1467830 said:


> That's an excellent comment.
> 
> Paul one of the main questions I've wondered about your residential division is how do you deal with all the parked cars that are in the driveway's after a snowfall. During the week would be easy once people leave for work but what about on the weekends or holiday's when people are in no hurry to go outside to move or even clean off the cars.


We have a very clear SRP Snow response plan, and every client gets a copy. We stipulate in our contract that all cars must be removed by 9am so that we can do our final pass. Its 10am for the weekends. We always still give the client an extra hour break, but we do not tell them this. If they missed the boat, we call the clients that missed the deadline boat people. We will service them for an additional $15 fee. Now we get lots of calls who say they were out on time, and we will give them the benefit of the doubt once. We always have a few guys stay on longer to handle these people. I must admit our clients are very good about this, it took many years of training. It is one the main reasons we went with the Opersoft GPS units in all our tractors. We can tell any client who calls, at what time we did their drive, how many times we did it, and which driver did it. You would be amazed at the silence at the end of the phone when you say the driver was in their driveway at 11:15 am so there must have been a car in the way if it was not completely done.


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## CGM Inc. (Dec 15, 2008)

Neige;1467857 said:


> It is one the main reasons we went with the Opersoft GPS units in all our tractors. We can tell any client who calls, at what time we did their drive, how many times we did it, and which driver did it. You would be amazed at the silence at the end of the phone when you say the driver was in their driveway at 11:15 am so there must have been a car in the way if it was not completely done.


 GPS tracking is a wonderful thing for sure! If clients question billing on salt they get the GPS report with Spreader information on it and pay the bill without complaints. Works both ways.....but comes at a price!


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## CAT 245ME (Sep 10, 2006)

Neige;1467857 said:


> We have a very clear SRP Snow response plan, and every client gets a copy. We stipulate in our contract that all cars must be removed by 9am so that we can do our final pass. Its 10am for the weekends. We always still give the client an extra hour break, but we do not tell them this. If they missed the boat, we call the clients that missed the deadline boat people. We will service them for an additional $15 fee. Now we get lots of calls who say they were out on time, and we will give them the benefit of the doubt once. We always have a few guys stay on longer to handle these people. I must admit our clients are very good about this, it took many years of training. It is one the main reasons we went with the Opersoft GPS units in all our tractors. We can tell any client who calls, at what time we did their drive, how many times we did it, and which driver did it. You would be amazed at the silence at the end of the phone when you say the driver was in their driveway at 11:15 am so there must have been a car in the way if it was not completely done.


Very interesting,

I've been dealing with the parked cars issue for many years, some clients are great and move vehicles soon after the property has been opened up but then there are those that feel that i have all the time in the world so why be in a rush.

I have one particular client that has a drive that is three car length's long with two vehicles parked single file, I clear 1/3 the drive and the home owner does the rest, I've asked them why do they not just park the vehicles by the curb after the property has been opened up, after all they have already payed for the service. I was told they like doing it.


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## Neige (Jan 29, 2008)

CAT 245ME;1467866 said:


> Very interesting,
> 
> I've been dealing with the parked cars issue for many years, some clients are great and move vehicles soon after the property has been opened up but then there are those that feel that i have all the time in the world so why be in a rush.
> 
> I have one particular client that has a drive that is three car length's long with two vehicles parked single file, I clear 1/3 the drive and the home owner does the rest, I've asked them why do they not just park the vehicles by the curb after the property has been opened up, after all they have already payed for the service. I was told they like doing it.


Wow don't sweat those kinds of clients, they are great to have. I would say that 5% of my clients will shovel their drives even when we get the 2 inch trigger. They really hire us to take care of the big storms and to remove the nasty windrow left behind by the muni plow truck. No its the ones who decide to crawl out of bed on a Sunday afternoon at 1 pm, remove their cars and then still expect us to come around.


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## Landcare - Mont (Feb 28, 2011)

CAT 245ME;1467866 said:


> Very interesting,
> 
> I've been dealing with the parked cars issue for many years, some clients are great and move vehicles soon after the property has been opened up but then there are those that feel that i have all the time in the world so why be in a rush.
> 
> I have one particular client that has a drive that is three car length's long with two vehicles parked single file, I clear 1/3 the drive and the home owner does the rest, I've asked them why do they not just park the vehicles by the curb after the property has been opened up, after all they have already payed for the service. I was told they like doing it.


As the guys plowing the roads, it must be stated that we have a lot of trouble with the people who come outside while it's still snowing and the plows are still clearing the roads and park their cars on the street so the "my driveway guy can do the whole driveway". Sigh.

Yes, one of our municipalities has a local by-law which prohibits parking on the streets during a snowfall and for four hours after the snowfall ends but the town inspector is usually home in bed while it's snowing and the Montreal police rarely patrol our demerged town and never to give out parking tickets.


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## Neige (Jan 29, 2008)

Landcare - Mont;1467954 said:


> As the guys plowing the roads, it must be stated that we have a lot of trouble with the people who come outside while it's still snowing and the plows are still clearing the roads and park their cars on the street so the "my driveway guy can do the whole driveway". Sigh.
> 
> Yes, one of our municipalities has a local by-law which prohibits parking on the streets during a snowfall and for four hours after the snowfall ends but the town inspector is usually home in bed while it's snowing and the Montreal police rarely patrol our demerged town and never to give out parking tickets.


We actually ask our clients not to park on the road till after the plow has come by. We tell them not to worry, we follow the plow and will remove the windrow, then always come back a second time to clear the whole drive. Landcare you are from the West Island, the competition between the snow contractors out there is fierce. They start cleaning drives when there is less then and inch accumulated. Its really nuts out there.
I have noticed its more the homes without contracts that are pulling their cars out early so they cannot get plowed in.


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## CAT 245ME (Sep 10, 2006)

Landcare - Mont;1467954 said:


> As the guys plowing the roads, it must be stated that we have a lot of trouble with the people who come outside while it's still snowing and the plows are still clearing the roads and park their cars on the street so the "my driveway guy can do the whole driveway". Sigh.


Actually my clients are asked to move vehicles after the city has completely finished clearing the streets, not during snow falls cause it just makes someone else's job even harder. Myself I follow behind the city plow removing windrows for clients to get out then double back to finish them off.

I will give the City of Fredericton credit, they do a real good job at clearing streets and roadway's, all there equipment is kept fairly new. They generally start about 2am and by 7am they've completed most of the route's with the odd back street left to finish.


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## Landcare - Mont (Feb 28, 2011)

CAT 245ME;1468113 said:


> I will give the City of Fredericton credit, they do a real good job at clearing streets and roadway's, all there equipment is kept fairly new. They generally start about 2am and by 7am they've completed most of the route's with the odd back street left to finish.


It all depends on the timing of the snowfall. Our municipal contracts state that we must start clearing the roads when there is 4 or 5 centimetres (depending on the town) on them. Generally, each truck takes 4-5 hours to complete one pass of its sector - that's why no parking for 4 hours after the end of the snowfall. In the case of a big or extended snowfall, once we start, we don't stop until the snow has stopped falling and all the roads are cleared. None of our municipal contracts included blowing and hauling anymore.


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## cold_and_tired (Dec 18, 2008)

My business is 90% snow, 10% other things. I go about it a different way though.

The majority of my contracts are seasonal with a few hourly's and per push's thrown in for good measure.

I own the pushers and plows but lease the heavy equipment, sub the plow trucks and sub the shovelers. The only guys that get added to my payroll are the equipment operators. By leasing the equipment, I don't have to worry about making a payment year round and I don't have to worry about fixing breakdowns.

I have worked very hard to establish relationships with the companies that I lease from and my payments are usually less than what I would pay per month if I had to finance a machine. The best part is that I am only making those payments six months out of the year.

Sure I am not gonna own the machines after a few years but the way I lease, it would take 10 years before I spent enough money to own a machine.


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## grandview (Oct 9, 2005)

cold_and_tired;1468283 said:


> My business is 90% snow, 10% other things. I go about it a different way though.
> 
> The majority of my contracts are seasonal with a few hourly's and per push's thrown in for good measure.
> 
> ...


I think I said that here somewhere. If your leasing stuff your not carrying it year round,profit might be a little smaller but less headaches to.


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## merrimacmill (Apr 18, 2007)

I only read through about half the thread, so I'm not sure if anyone gave an answer similar to this already, but I'll go at it anyways. 

I am 85%-90% snow. I go from 15-21 people in the winter to 2-4 in the summer. I have several pieces of equipment that are only used for snow. It really all comes down the budgeting, and building your own "insurance program" through your sales process. 

First off, you need to know your dollar amount of overhead. How much it costs you to pay your salary and overhead employees, rent, insurance, equipment payments, etc. Even if its not typically in your overhead, if the bill comes in whether it snows or not include it in this figure. Do this for 13 months of expenses. (why 13 months? Well we all know how that income layover when waiting till December 30th or Jan 30th for the seasons first checks can be..) That figure is now your sales goal for seasonal contracts. Cover this number with seasonals, and throw in a 30% cushion to cover as well (you know things always cost more than expected). Now your bills are paid all year if we get zero snow. Here is where per push, per event contracts, and hourly contracts come into play. I price these based on my operating expenses. This is salt, direct labor costs, fuel, additional equipment, subcontracting, etc.. Think about this for all your contracts as well when developing this pricing system. Each time it snows, the revenue generated from per service accounts should cover all operating expenses for that entire event. This is where the balance comes into play. If you can balance your seasonals and per service contracts properly (which isn't always possible, I know), you will win either way (snow or not). 

I programmed a spreadsheet to calculate this throughout the bidding season. I breakdown the "potential winter" into inches and cost per inch. It has seasonal income, overhead expense, and per service contracts with they're potential income based on an inch rate. This lets me visually check to see that if we get X amount of snow (for all intervals 0" to 200" per season), will I remain profitable? If done right, you can balance it so that you can theoretically maintain a specific desired profit margin no matter the seasons snow total outcome. I'm currently trying to figure how to get more accurate with this by programming in our areas 5 year average for event types using factors like average duration of an event, snow totals for each event, ice snow or both, etc.. I'm about halfway there, but I haven't completely figured out every part of how to program that extended version of the spreadsheet yet though...

Another thing is subcontracting is always best on per service accounts. I like to use only my own equipment on seasonal's, because the seasonals are paying for your owned equipment, and in the event of a heavy winter, it gives you more room before the contract becomes unprofitable due to excessive snow. For example, to make it easy if you have a 10K seasonal with a subs $100 per hour truck onsite, you only have 100 hours before that contract becomes unprofitable and there is nothing you can do about it but keep paying each time it snows. If you have your truck onsite, which costs YOU $50 an hour, you now have 200 hours working onsite before it becomes unprofitable. Thats double the amount of time available throughout the winter. On the other hand, for a per service account, if you have a sub billing you $100 per hour, lot takes 1 hour to clear, and your getting $200 per service, who cares how many times the lot is serviced in a year, because every service your putting $100 more towards your operating expenses. This model allows me to scale my operating expense income, without increasing my overhead expense. 

Someone mentioned earlier, budgeting and saving. This is obviously so key to this system, along with keeping overhead low. For my snow only equipment, I think of it as a rental so to speak. So if I have 12 monthly $1000 payments on it, thats $12,000 in a year that it costs to own. I'm using it and getting paid for it roughly 4 months of the year, so I divide 12K by 4 and get $3,000 dollars per month to "rent" that piece of equipment from myself. Those payments are made into a separate bank account as if they were going to a rental company or something, then automatic withdrawal is set up for it, and at the end of the 4 months, the equipment is covered all year. 

I know snow, weather, and operations cannot be completely consistent and scientific like this, and people tell me all the time that I waste a lot of time and effort trying to make it a perfectly consistent and numbers oriented game, due to the fact that snow is one of the most dynamic businesses you can be in. But I strongly disagree when people tell me this, the first step is to get the numbers, and budgeting down as perfectly as possible. The second step is looking at your operations to create enough efficiencies and procedures to make a good budgeting system for a seasonal business actually work, real world. Do these people think Brickman and they're 98 million in snow revenue (or however much it is now) doesn't have it down to a scientific system? I'd be willing to bet they have it down pretty damn good, to the cent. 

I'm not snow only, and would like to be, but even though I've put all this thought into it, I still see enough problems that I haven't overcome yet to be completely comfortable giving up the means to create any other type of income in a year. Thats a serious step I'm not yet willing to take.

Also, I know there is a lot of ways to figure all this, and everyone has they're own way. So disagree with this or not, its what works for me.


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## Neige (Jan 29, 2008)

merrimacmill;1468409 said:


> I only read through about half the thread, so I'm not sure if anyone gave an answer similar to this already, but I'll go at it anyways.
> 
> I am 85%-90% snow. I go from 15-21 people in the winter to 2-4 in the summer. I have several pieces of equipment that are only used for snow. It really all comes down the budgeting, and building your own "insurance program" through your sales process.
> 
> ...


Thumbs Up Thanks for taking the time, to explain your system Collin. I have met lots of people in our in industry, and Collin has the most detailed, numbers system of anyone I have ever met. Every time I am amazed, at how detailed he knows his business. I am printing his post and going to show it to my brothers, as proof there is room for improvement in our system. :salute:


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## Triple L (Nov 1, 2005)

My biggest question is does it really only cost you $50 per hour to have your own snow only equipment onsite compared to paying a sub $100... I'd be willing to bet the numbers are a lot closer to each other then you think...

But everything aside, great post Collin


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## CGM Inc. (Dec 15, 2008)

The other screwy part for year round maintenance companies that a lot of people don't understand is when you have a sub on an all inclusive basis and a short winter like we have this year.


You pay the sub for 5 month (our season) but you have to start spring clean-ups early due to weather, double expense for a month that can get very costly. One can say don't start before winter is over but that will for sure loose you business if you show up 4 weeks late to start site cleaning. You don't have that problem as a snow only company but it is also difficult to keep contracts for winter if the Guy that cuts the grass does winter.


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## JD Dave (Mar 20, 2007)

Triple L;1468632 said:


> My biggest question is does it really only cost you $50 per hour to have your own snow only equipment onsite compared to paying a sub $100... I'd be willing to bet the numbers are a lot closer to each other then you think...
> 
> But everything aside, great post Collin


He was giving fictitious numbers I think but yes I can generally use my own equipment for pretty close to half what a sub costs. The key factor to all this is finding good reliable operators. Per push or by the hour are basically non existent around here and to be honest I don't want those types of jobs. I want to know what I'm going to make before the winter even begins. We pay our guys a seasonal wage and our subs, they make out really well in a light winter but they work hard for their money in a hard winter. It's all about averages.


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## merrimacmill (Apr 18, 2007)

Neige;1468628 said:


> Thumbs Up Thanks for taking the time, to explain your system Collin. I have met lots of people in our in industry, and Collin has the most detailed, numbers system of anyone I have ever met. Every time I am amazed, at how detailed he knows his business. I am printing his post and going to show it to my brothers, as proof there is room for improvement in our system. :salute:


Thank you for your kind words Paul! It makes me feel very reassured in my concepts about managing a snow business knowing that they've been approved by you! :salute:

Not that its the topic of this thread, but I have to say that when I talk to a lot of other contractors, it amazes me how many of them have no idea what they're doing with the numbers, and will actually go as far to tell me that what I do is a "waste of time, stop over thinking it". There is so much uncertainty and risk involved in a seasonal, emergency service business, that I think the only way for long term sustainability is to be creative, have a solid plan, and follow it. I can imagine this would become even more essential in a 100% snow only business, because there is no chance to make up lost income, or anything. Once winter is over, thats it.


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## Stowe (Jul 13, 2010)

merrimacmill;1468668 said:


> Thank you for your kind words Paul! It makes me feel very reassured in my concepts about managing a snow business knowing that they've been approved by you! :salute:
> 
> Not that its the topic of this thread, but I have to say that when I talk to a lot of other contractors, it amazes me how many of them have no idea what they're doing with the numbers, and will actually go as far to tell me that what I do is a "waste of time, stop over thinking it". There is so much uncertainty and risk involved in a seasonal, emergency service business, that I think the only way for long term sustainability is to be creative, have a solid plan, and follow it. I can imagine this would become even more essential in a 100% snow only business, because there is no chance to make up lost income, or anything. Once winter is over, thats it.


Merrimacmill,

Do you find it hard to compete with companies that use most of their equipment all year.


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## merrimacmill (Apr 18, 2007)

JD Dave;1468651 said:


> He was giving fictitious numbers I think but yes I can generally use my own equipment for pretty close to half what a sub costs. The key factor to all this is finding good reliable operators. Per push or by the hour are basically non existent around here and to be honest I don't want those types of jobs. I want to know what I'm going to make before the winter even begins. We pay our guys a seasonal wage and our subs, they make out really well in a light winter but they work hard for their money in a hard winter. It's all about averages.


Yes, fictitious numbers, using 50 and 100 just to make the example easy. But I also agree with you, I can operate at about half the cost of a sub. The other thing to keep in mind is that I was comparing the direct hourly cost of running a truck owned by your company, not the billable hourly rate that the customer would get, to the billable hourly rate of a subcontractor.

Paying seasonally seems to be a popular thing in Canada. Down here, it is unheard of unless its a supervisor, or year round support staff. I like the idea though, and have tossed it around quite a bit. And it is how we pay for our residential snow blowing service, to help control costs. My only variable cost associated with that service is fuel, any potential breakdowns, and of course tire wear which is extremely minimal with well under 100 hours a year. When I've presented the idea to the commercial operators of being salary, they hate it around here and kind of laugh at the concept. I bet they won't laugh at the idea after this year... I think they just assume that I would start having them work non stop, with less employees, and would abuse the system to save money. This because I have so many new hires each year due to the large increase in employment each winter over my summer work, and they don't usually know me at all upon hiring. I think I would need a way to predefine what they will be doing, and what they're specific responsibilities would be for the year.


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## JD Dave (Mar 20, 2007)

merrimacmill;1468677 said:


> Yes, fictitious numbers, using 50 and 100 just to make the example easy. But I also agree with you, I can operate at about half the cost of a sub. The other thing to keep in mind is that I was comparing the direct hourly cost of running a truck owned by your company, not the billable hourly rate that the customer would get, to the billable hourly rate of a subcontractor.
> 
> Paying seasonally seems to be a popular thing in Canada. Down here, it is unheard of unless its a supervisor, or year round support staff. I like the idea though, and have tossed it around quite a bit. And it is how we pay for our residential snow blowing service, to help control costs. My only variable cost associated with that service is fuel, any potential breakdowns, and of course tire wear which is extremely minimal with well under 100 hours a year. When I've presented the idea to the commercial operators of being salary, they hate it around here and kind of laugh at the concept. I bet they won't laugh at the idea after this year... I think they just assume that I would start having them work non stop, with less employees, and would abuse the system to save money. This because I have so many new hires each year due to the large increase in employment each winter over my summer work, and they don't usually know me at all upon hiring. I think I would need a way to predefine what they will be doing, and what they're specific responsibilities would be for the year.


You could also try giving them a monthy standy and an hourly wage on top of that when they work. IMO guys need an incentive to be dedicated. We have a few new guys every year but the core of them come back every year. Everyone thinks we pay our guys to much but our equipment repairs and productivity tell a different story.


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## snowman4 (Nov 25, 2007)

Between Collin and Paul I'm getting a little emotional with all the love in the air


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## merrimacmill (Apr 18, 2007)

snowman4;1468717 said:


> Between Collin and Paul I'm getting a little emotional with all the love in the air


I don't think anyone can blame you for that tymusic


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## RLM (Jan 12, 2006)

Lots of good information being shared awesome thread. After this winter I have already been approached by my top sub about a minimum, last season we had 30%more snow than normal, he had 270 hrs, this year 70hrs, he was only asking for 100 hrs min. I told him we would see how things shape up for next season, but I would seriously consider it I understood completely where he is coming from. I find it very interesting the way things are done north if the boarder, we are only across the pond (Lake Ontario) but thing are done very different.


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## thelettuceman (Nov 23, 2010)

Merrimacmill: Those people that criticize you do not have the brains that you do and are jealous of your intelligence. I won't criticize and I am jealous of your intelligence.


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## merrimacmill (Apr 18, 2007)

Stowe;1468671 said:


> Merrimacmill,
> 
> Do you find it hard to compete with companies that use most of their equipment all year.


Sometimes. The reason I say that is because yes if they have a loader they run all year on a construction site, and could afford (and generally plan on) letting it sit in the winter, they are able to be much more competitive than me who owns a piece of equipment for the sole purpose of pushing snow. For example I've owned and plowed with one of my tractors for 3 seasons now and it currently has under 250 hours on it, and another has around 150 on it which has been run 2 seasons. Its billed so many less hours than someone who uses equip all year. But at the same time, I don't care that it hasn't billed any hours this year because like a said in an earlier post cover your overhead with your seasonal accounts and service the seasonal accounts first with your own equipment. Its easier to sub per push and event contracts. The tractor was not used more than 15 hours so far this year, and has made more money by doing less work.

Remaining competitive with snow only equipment has a lot to do with equipment choice. I weigh out production rate vs. cost of purchase and ownership. You notice I don't own any $200,000 front end loaders... I just don't know a way to buy one in that range and only use it for snow. I know a lot of guys do it, but I haven't figured it out with staying competitive. Now, spending 40-80K on a used loader is very reasonable, and very possible to stay competitive.

As far as leasing goes, I can lease a backhoe that could push a 14' pusher and plow an average of 2.1 acres per hour for $1900 a month, or I could rent a loader that could push a 16' pusher and could plow an average of 2.7 (maybe 3) acres per hour for $3,500 a month. Is the extra $1,600 ($6,400 per season) worth .6 acres more per hour production? $6,400..... Thats the whole salt budget, or the whole labor budget, for a good sized lot. This definitely isn't to say that there aren't a lot of situations where a large articulated loader is the only way to go on a lot, but I see a lot of guys leasing huge loaders when its really not needed. Another concept is to group your lots close together and put several backhoes or smaller pieces of equipment across the lots, with one large loader in the middle of it all. Its there to be roaded between accounts for the heavy work, and its there for the 2 foot blizzards, but the cost can be put out across all the accounts so it doesn't kill the profitability of one contract..

Utilizing snow only equipment will definitely never make me 'more competitive' price wise but its still very financially doable if approached correctly, and can also allow you to own more specific snow equipment.

There are a lot of ways to apply the costs of owning snow equipment without having to have some kind of insane hourly rate. When I first started tackling this, I was basing the hourly rate on usage hours per year, which put the rate out of control high. There are a lot of ways around this I've figured out that I could go on about.


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## snoworks07 (Apr 20, 2012)

"Our customers realize that signing a snow-clearing contract for the season is very much like carrying insurance - you hope you never have to use it but are really glad it's there when you need it."

This quote sums it up in a nut shell. I have been selling my snow service as an insurance policy for years. Thats my pitch to the client and most understand and appreciate it. I tell them I sell 5 minute time slots or 50min(5x10 events a year) for which there are real costs that are incured by our company wether it snows or not. Most people get it, the others, you let someone else deal with the headache.

CGB


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## m_falafel (Jul 27, 2010)

merrimacmill;1468409 said:


> I only read through about half the thread, so I'm not sure if anyone gave an answer similar to this already, but I'll go at it anyways.
> 
> I am 85%-90% snow. I go from 15-21 people in the winter to 2-4 in the summer. I have several pieces of equipment that are only used for snow. It really all comes down the budgeting, and building your own "insurance program" through your sales process.
> 
> ...


It may sound weird, but how do you calculate your hourly cost per vehicule?

Can you tell me everything you include in that calculation and how you proceed?

I only started two and a half years ago, and that's the part I have to most difficulty with...


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## cold_and_tired (Dec 18, 2008)

m_falafel;1477503 said:


> It may sound weird, but how do you calculate your hourly cost per vehicule?
> 
> Can you tell me everything you include in that calculation and how you proceed?
> 
> I only started two and a half years ago, and that's the part I have to most difficulty with...


Things to consider when determining hourly rates:

Operator wages
Vehicle replacement costs
Fuel
Vehicle and plow repairs
Wear items
Profits

Everybody's prices will be different depending on what your costs are and what you want to achieve as far as profits go. It's important to make money while remaining competitive but you don't want to drive down prices in your market.


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