[Nebraska]

We are using 7 subcontractors...

When I look at the revenue brought in per storm and total expenditure for subcontractors on a storm I am roughly 22%.

With nothing to gauge it with and since our snow operations were about 1/3 of what we're at now....it's gotta sound naive?? Anyway???....Input????

[Paul]

Your a little vague on the details here, so I'm guessing your at 22% profit from the contracts? Is that after your account set up fees and other expenses? Most construction industry contractors add in 15% to their subcontractor's prices. thats not to mean thats the most you can get for them! It's just what most look for, I've had contracts that state the amount of profit you can get is 5%-to 15%, But that was on extras.

[Nebraska]

No....The total cost for subcontractors is 22% of the Gross.

[Paul]

Well then I would think your doing pretty well then.

[Nebraska]

I am running 3 of my own trucks...That is on this first storm that we are in the midst of...The perfect storm where we push once and salt once during the day and then go back without stress from time constriants and plow it again after it has completed snowing (supposed to stop at 9pm).

[Lawn Lad]

Nebraska - plowing with subcontractors is nearly a break even proposition than with your own trucks. If you want to grow the business use subs for plowing and stick to salting with your own trucks. Over all a gross margin of 60% to 70% on snow operations is the goal. Each time you go out you should not have direct expenses in excess of 30 or 35% if you want to see 20% profit margins (assuming you manage your overhead wisely). However, if you job cost your subs you'll see that plowing may only run you 50 or 55% GM. A heavy storm and that might drop a little lower. However, salting should be running around 80% GM or possibly more. You obviously have to clear the snow to salt. It's tough on your equipment to plow and takes a lot of vehicles or eqiupment to do it compared to what you can cover with salt trucks.

It looks like you're making pretty good money with the how you have things set up now. Manage your storms to gross margin and then everything else should fall into place.

[Nebraska]

....salting??? How ironic you mention that at about the time our problems unfolded and solved themselves last night.

It's great news when the truck your going to salt with, all loaded just stops running. Our 2001 Dodge yesterday evening / morning (3:30 AM) just died with a fully loaded spreader in the back just as we were beginning spread the first lot. We have backups for everything...trucks, plows, snow blowers, shovels etc., except a second v-box spreader.. My problem was not the spreader, rather the truck.

In the midst of our problem I found another guy with the problem of not having a driver for his truck and spreader. His drivers mother evidently died that evening. We took care of his lots, gave him the necessary salt and sand, while we made our rounds to cover our lots. In the end the valuable lesson was that contacts and friends within the industry with a handful of other owners is absolutely priceless....just as it is in any other aspect in life. In situations like this you will find out who are your selfless friends and who your selfish acquaintances are; real quick. I had one individual move categories (to acquaintance from friend) in a matter of seconds......nothing's worse than for two years helping someone out (loaning trucks, plows, blowers, spreaders, minor repairs...) when they are in a pinch or a bind to only have any assistance completely denied for the reason being and I quote, "Sorry, I'm too tired". Less than 8 hours into the storm.

p.s...as a last resort we were going to bring out a skid loader to the lot, empty the spreader, transfer trucks, quickly wire the controller, refill spreader and be on our way.

p.p.s. in case anyone is curios the Dodge had a cracked coil wire boot on the distributer cap that had become iced over somehow....new set of wires and we were good to go. Do we have a spare back at the shop???? Right. LOL!

[Lawn Lad]

Good point about having back up. Last night I made a couple of calls to make sure I had some mutual back up agreements in place with other contractors I know, each with between 5 and 18 trucks apiece, all with back ups of their own. Each owns their own company and works slightly out of our immediate service area. It was good to touch base with them last night and make sure we were all on the same page. Keeping back up plow trucks, subcontractors, employees on a list that I can call on is helpful. But I sure would hate to get to the bottom of that list in the middle of the night and find myself in a pickle with no else to call. Thank goodness for friends!

[Stonehenge]

It's interesting to me to hear of the cooperation between companies when plowing. Does the same thing happen during the landscape install/maintenance season?

If I were a betting man, I'd bet no. But I'm wondering what about this makes it different. Is it the immediacy of the work?

Also, how do you guys arrange reciprocity? Do you pay the other competitor what you'd have made if you weren't broken down? Is there an informal 'favors' tally? Or just a handshake and the reliance that you're all men of good conscience?

[scl]

What we've usually done is if you do another guys account, he'll give you what he'd get for it. Just kind of an unwritten agreement. When I've helped on multiple vehicle plowings I'd give the contractor a per hour price, that was usually pretty fair, and just keep track. I've also done a couple on the "catch you next time" tally sheet.
When I had a little problem last year, 2 guys were out right away, and I paid them both by the hour, that's what they wanted.Actually, one didn't want anything, but I wouldn't hear of it.
As far as landscaping goes, Ive never run up against it, maybe it is an immediacy thing. But if a couple of competitors called me in a screaming pinch, I'd see that they got help.

[Nebraska]

Basically yes to a lesser degree...but there still is some cooperation among friends with maintenance maybe less with installs because the immediacy factor is reduced???.

Where I am at snow is cut throat for the bidding process...but when the actual snow falls I have found that your circle of friends and acquaintances will help each other out. Some you pay in money....some you pay in favors.....some you help out just because. In my area it's really informal for this aspect of the business. Not honoring your end of this informal arrangement will immediately tarnish your reputation.....after that good luck getting help other than from the tow truck company that you call at 3:00AM.

I would also say that these arrangements are more typical of small to medium sized companies. A larger company would have the resources to cover most everything....yet even the owner of a large company would have friends willing to help out.

[dan deutekom]

In our area it works in the landscape end of it too. Although it is the immediacy of plowing that makes for emergency help. In the landscaping end of things we end up sharing and borrowing tools or equipment that we do not own or another company does not own. We will also split loads or supplies.

[Lawn Lad]

I think we're all in the same boat when it comes to snow plowing. Any truck or piece of eqiupment can break down at anytime. Everyone knows it and I think we help out the other guy just as we'd like to be helped out in the same circumstance. The golden rule definetly applies at 3 am. Would I pass by a stranded plow truck on the side of the road without stopping? No. I'd stop and pull him out or give him a jump if need be.

As for payment, as mentioned earlier is depends on the relationship. On one property I kind of trade service next door with the guy. He does a larger shopping center and I do a smaller lot next door. Last year his spreader broke down so he loaded our tail gate unit with their bulk and we spread it for him. Didn't charge him anything. But later in the winter I called in the favor when we were running way behind on a late snow fall and asked that he salt the location so I didn't have to route the truck out of the way.

This year his salter went down first thing and he didn't have his stockpile on site, so I trucked in the salt for him and we did the lot a couple of times until he got a new unit and his salt on site. He'll either give me loads of salt or pay me, whichever works out.

If I was doing the asking I'd like to know what the other guy wants in return. I'd rather write the check so I know what my cost is. Nothing is free, it almost certainly always has a higher cost in the long run than if you write the check on the spot. In return, if I plowed for someone else, generally I'd like the check to. I guess it depends on whether you think there will be an opportunity for reciprocity if you're going to wait for the opportunity to trade.

[BRL]

"Also, how do you guys arrange reciprocity? Do you pay the other competitor what you'd have made if you weren't broken down? Is there an informal 'favors' tally? Or just a handshake and the reliance that you're all men of good conscience?"

All of the above. I've finished plowing lots for strangers, and I've had strangers finish lots for me at 3:00 AM, no money exchanged. I've hired subs on the fly after break downs, and I've been hired when others' have had break downs. I've also got a bunch of friend contractors & we all keep tabs on each other through the storms, and if someone has a problem we'll all do what we can to help someone get through the storm. With the friends, if the break downs weren't costly ones that ruined a storm's profits, we'll pay each other fair rates for whatever equipment\materials were used. But if we know one of us really got hurt by something, then we don't charge each other. Works out good so far & its nice to not have to completely panic when a tranny blows up at 2:00 AM or a preader stops running.

As far as during the green season, the group of friends I mention would not hesitate to help one of the others out of a bind. Not so sure about how many of the strangers would as well, but luckily I haven't really had to test that. Don't forget, us snow plowers are a little screwy in the brains to start off with, so we kinda understand each other I guess?? LOL

[Nebraska]

BRL say's

Don't forget, us snow plowers are a little screwy in the brains to start off with, so we kinda understand each other I guess?? LOL

I don't think we get weird until that plow is actually attached and then something happens.......?????

For the most part the competition stops when the snow starts falling and at that point we are all on an equal playing field; at the mercy of mother nature, our equipment, and each other. For me many friends have been made during a snow storm...more often giving than receiving favors.

Snow plowing sin #1: Driving by and not offering help to another plow truck stuck or in trouble.

For anyone that's been plowing snow for a while....that nod or that 'finger wave' at the passing stranger with a plow says it all...IMHO those that don't get it or understand it will have serious problems eventually; word travels quickly.