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Discussion Starter · #1 ·
I know we're not big on posting prices here, but I did to illustrate my point.

I was recently contacted to quote two properties. They are basically apartments. Long driveways and parking in the rear, totaling about 3/4 of an acre. Garages, carports and patios to work around. The snow has to be pushed clear to the ends of the parking areas.

For both properties, I quoted him $240 for 2-5 inches and up from there. He comes back and says his guy does both for $95! And this is a flat fee no matter how much it snows. He has been doing it for years and the owner is happy with the service.

He also said that 3 other guys have approached him with very similar pricing to the guy that's doing it now. I know pricing varies widely in different areas, but I really don't think I am out of line. As a reference, I have some normal sized driveways that I get $25-30 for.

Steve
 

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Don't feel bad, Steve. I was asked for price on a parking lot the other day. I quoted him $40. He asked if that was for only that lot. "Yes". Then he tells me the guy he's using now charges him $40, but that includes two other driveways - all at seperate locations and totals about an hour for a 6" snowfall. Then I asked if the guy had insurance and the conversation went downhill from there.
 

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Been there done that. I lost a restaruant because the lowballer decided to do it for food!! Can you beleve it? I also bid on a trailer park and 2 1/2 hour job lots at a fair price and have heard nothing so dont feel bad there are better customers out there!
 

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Steve... are both properties totally about 3/4 of an acre? If so, that 30,000 square feet should not take you more than an hour or so with back dragging, etc. Even if it's a bit more... perhaps your $240 for both properties is a little high. If both properties are 3/4 of an acre than you're more in line with about $125 an hour. Otherwise I could see how you'd be high. $95 is way too cheap... and yes, "lowballer" is what you call them.

I bid several stores for a local chain recently, thought I'd go in pretty competitive with my numbers where I pretty much knew I'd be one of the lower bidders. I'd still be profitable, just not as profitable as I might like.

Needless to say a 2 acre lot that would take a little over 2 hours went for $100.00 and $60 for salt. I about choked when I saw that. No way I could touch it.

Another one acre job I looked at went for $60.00 per push, salt $34 and the front walk across the face of the building (90' long plus by 5' wide) was $13.00. The very scary thing is that a reputable landscaper (Gross of $2 mil plus) is doing the job. He doesn't do the landscape there or do any other work for the guy. He parks a truck on site, but that's it. But it was never factored into the negotiation since the property owner doesn't care if the truck is there. He thinks it's good since he feels like he's getting better service.

Guys are giving the work away. The scary thing is that they most likely believe they are making money. They may be breaking even, just putting their summer equipment to work. If that's their strategy, so be it. Their choice. But I'd be willing to be that these guys don't know their true costs. Simply amazing.

Hang in there... you'll find the customers you need.
 

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Discussion Starter · #6 ·
Yes, both together total 30,000. I added a little extra time to deal with parked cars, etc., but maybe I was a little too high.

That is an interesting comment some guys "think" they are making money. That has to be very true. I did ask him about insurance and backup, but he didn't answer. Also, he doesn't live there and just because the tenants aren't screaming doesn't mean they are getting good service.

I think I got a little too wound up for this one. It was very close by and would have a been a big one for me. I am sure more will come my way.

Thanks for the reference and info.

Steve
 

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I have one question ... maybe I missed the answer ... are the two properties close or next to each other ... then just figuring an hour would be fine, but if they are not, meaning drive time .... then I would include that in the bid ... or at least a little extra to cover it.
What is the hourly amount you normally bill per truck, figure that 3/4 of that for actual plowing plus another 15-20 minutes playing with parked cars, then another 15 or so for drive time to the other site ....that is the way I would do it.
 

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I brought this up on the other site about what guys think is profit.
I know a guy that plows after work that said anything after gas money was profit. Thats hard to compete with.

For us guys that plow as, or as part of a business, you have to factor in fixed overhead costs such as insurance, vehicle payments, telephone, advertising, office expenses, computers, mailing costs, and payroll expenses.

I bid a couple of local Stewarts Shops ( similar to 7-11, Speedy Mart, Quick Stop type of places). Each lot was rather small, about 15 parking spots, gas pump islands, 2 entrances. Both were right near other existing lots we plow, and one was across the street from our shop. I bid $100 each, as they had to be clear by 5AM, and the lots always had cars in them throughout the day. One went for $35, one went for $40, the others they wouldn't tell me, only that I didn't get them. How in the world can anyone make any money at $40, let alone $35?:huh
 

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$100 for 3/4 acre sounds a little high to me. I could plow that in about 35 min, so $100 would be about $180 an hour. I try to get $100-$125 per hour when I bid commercials.
BTW A compact driveway route can bring in more per hour than commercial lots. It is tough to acheive, but I have a driveway route that brings in about $235/hr this year.
 

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Discussion Starter · #11 ·
These properties were about 2 miles apart. I am now pretty sure that I was high, but I wanted to add enough time to really clean it around the garages, carports and dumpsters. These are T shaped lots, with structures on both sides and along the back. The snow has to be pushed out the ends of the T's.

I can really spend a lot of time cleaning up the little stuff (maybe too much), but I get many compliments on my service. One of the outfits that I sub for complains that I am too slow, but his customers take the time to stop me and tell me what I nice job I am doing. Therefore, I like to make sure that my bids allow for that level of service. I am also dealing with older equipment and I will not abuse it.

Thanks for all the feedback.

Steve
 

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If you honestly do a better job than the current guy, then bring that up as a selling point ... tell them if they want you to do one pass each way and a little around the edges, then you will do it for the same price as the other guys. If they want the lots clear, corner to corner .... nipped and tucked real nice, it costs more.
Maybe split the difference between what you are thinking and what they pay now ... just a thought.
Plus, to drive 2 miles in a snow storm is going to take longer than on a sunny Sunday afternoon.
 

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Hi Steve

Remember what I told you about the lowballers around us ;) I know of at least 10 guys close to us that have no insurance :rolleyes:

As for your bid I have 3 apt. buildings like what you were bidding on (I think, like the ones on Portage Rd.) & get $100.00 each plowing & $45.00 for salt each.

The guy ($70.00 @)that was plowing them before me was always slow to get there & plowed the carports in :rolleyes: The tenants were always bitchen at the owner :argue so I told him if you want GREAT service then it cost just a little more :D I've never had a complaint yet :burnout
 

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the extra time you spend while touching up is nice but only if the customer is asking for it.

i'd speak with him again and find out exactly what he expects. it more than just "plowing" snow. offer something tailor to his(her) needs. maybe it will justify a lower price.

also, make note of the existing contractor and take notes on what he's doing/not doing and when he shows.

"BTW A compact driveway route can bring in more per hour than commercial lots. It is tough to acheive, but I have a driveway route that brings in about $235/hr this year."

i agree...i have some that are around $200 p/h
 

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So as I read this thread I am thinking.

He has a guy that does it for $95. but is asking to you and two others to bid it, WHY???

Does he really think he can get it done for LESS than $95.? If so you should be RUNNING away fast. No need to check up on what the otehr guys is doing, or what does he want or what does the other guys do or not do. Just RUN.

People like this are JUST looking for LOW bid nothing else. They do not cear about silly things like insurance, or back up, or plowed by time, and lets not even approach plowing with the storm or plowing on a holiday.

Secondly, how is salt half the price than plowing?? Lets say the market brings $125.00 per man hour to plow. What is your salt price based on in order to be only half the price?

Salt cost money plus all the other costs you have when plowing per man hour. Lets not forget about the loading time and clean up time after a salting event and the increased wear and tear on the truck from carring the load and salt erosion just to mention a few.

Seems like the salt price should at least be as much as one per push plowing. Just because you can get it done in a quater of the time should not mean you should bill half rate. All my per push accounts at same billing plow/salt per applicaiton and if I have to salt heavy or light I bill accordingly.
 

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Discussion Starter · #17 ·
Ron,

I think you are right about leaving it alone. I did not ask why he wanted a bid and he didn't tell me what he was paying until after I gave him the quote. I really don't want to know what they are paying until after I bid, that way I can't be accused of just trying to undercut the last guy. I simply bid it as I see it.

I bid the salting on what I thought it would cost me to do it and what I know about how other's price salting in the area. He wanted a fixed salting price, so I set it knowing some runs would be higher and some would be lower.

I do appreciate all your thoughts. I just keep learning here...

Steve
 

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The going rate for snow and ice removal in this area (Cleveland) is really low compaired to other areas of North America. People here are set in the thinking that snow removal should cost nothing but driving conditions should be like that of summer. It's pathetic, people freak over 4-6" of snow and it should have been cleared yesterday. Its never fast or cheap enough.
 

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Tom,

I hear what you are saying but, consumer options are a reality in all markets. It is how the vendor responds that can drive the market price up or down. Lets face it if NO one would do work one here one there for little to nothing the consumer would be left with what was being offered.

When guys are allowed to operate way under market by the consumer it effects the rest of the market too. It is important to know waht you are up against and sell what and where you can do the best for you company. I have lost my share of account do to the very high turn over rate at the management level and at the same token have seen growth due to it.

The great thing about being in business for yourself is you do not always have to do ALL the work that might come your way. Chose what is best for your margins not just work for the sake of having it.
 
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