When bidding a snow contract for a client, it can be hard to predict the weather and how much salt is needed for an entire season. As a contractor looking to run a profitable business, should you include salt price in a seasonal contract or price the client per application? This PlowSite member is looking for advice on adding salt pricing into a seasonal contract.
vmj: I am doing a first-time seasonal contract since that’s what this customer wants. Wondering if any of you include salt in the pricing or is it a separate billing per application?
1olddogtwo: Do you have unlimited salt? They’ll want it if it’s within a seasonal contract without a cap/application.
Freshwater: You can do it both ways. Seasonal price for plowing, with salt billed per application. This is a great way to do it. Or a seasonal all-inclusive price. This is also a great way to do it, but you must be spot on with your numbers, averages, totals, etc.
cjames808: Be as spot on as you can and pick one. I see some who have hourly or per pricing only and they complain the most about having bad years/contracts. Always mix it up with seasonal and per pricing; we have a good mix of the two.
Broncslefty7: I do salt once per storm; more than once is a billable extra at X dollars per application.
fireside: Mine are all capped at 10 applications. After that, they are billed per application.
FredG: For seasonal, I have only done all-inclusive. You want to put eight to 10 extra salt trips to your bid. Anything under your trigger, the snow wizards are going to want salt on a seasonal contract. Seasonal clients tend to be demanding. Or cap it as suggested above.
Arrowbrook99: Don’t do seasonal anything. Unless you’re on the money. I always felt odds are in the customer’s favor. Bill per plow and salt separate. That’s my opinion.
kimber750: Properly bid/writing seasonal contracts will always make money, even in the worst winters.
John_DeereGreen: Seasonal contracts are paying for an average season. You’re betting it’s average or below, they’re betting it’s average or above. From a revenue standpoint, yes, you will sometimes come out behind for a single season. However, even with two back-to-back winters that were double our average snowfalls, we have never lost money on a seasonal account. I wouldn’t be in the industry without them.
MSsnowplowing: Ninety percent seasonal, 10 percent per storm. I like to set it up this way so my per storm pays all my expenses. So far, knock on wood, it has been working great for going on 10 years that I have been doing it this way. You really need to know your average snowfall to make a seasonal contract work and also your expenses on a per-storm basis. How much is labor, gas, product, etc. So, if you get say 10 storms and each storm costs you an average of $4,000, that’s $40,000 your cost. On a seasonal bid that costs you $40,000, you should be bidding a bit higher than that to make a profit.
ktfbgb: Why would you not want to have enough seasonal contracts to cover all your maintenance, insurance, expendables, salt, etc. for the season? If you have a mix of both, with enough seasonal to cover expenses then you literally have covered your operating costs before any snow flies, without spending a dime of your own money. You are financing all your costs with other people’s money. If you aren’t pushing to get to this, then you need to be.
ponyboy: My area and my customers want seasonal contracts for budget reasons. Granted there are always overages due to number of storms, amount of salt, blizzards, snow stacking, etc. So yes, my contracts all have limits, I’m not in business to lose money or even break even; I’m in business to make money.
kimber750: I have always looked at seasonal contracts as snow insurance for the client. They are paying a set price monthly like car insurance but even car insurance has a cap. Same for seasonal, they pay for a standard protection but like with auto insurance, abnormal circumstances sometimes happen that insurance doesn’t cover that event. Per push is pretty much the client being self-insured. They have no idea what their costs will be or when they are coming.