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Analyzing Hourly Bidding Strategies

4:54
22:19
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At 4:54 in

How to run a Snowplow Business: Red flags, pricing systems and what not to do...

What happens here

The host explains hourly bidding, highlighting its benefits during heavy snow years but its insecurity for contractors during light snow years ("No Snow = No Dough$$"). He warns that customers may push back against hourly billing due to unpredictable costs and advises prompt invoicing (within 2 weeks to a month) to avoid collection issues, citing a personal experience of losing $10,000 when payment was delayed until snow melted.

Goal: Understand the risks, benefits, and best practices for implementing hourly snow removal contracts.

What they say

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bidding and estimating with this system. Now, hourly for you guys is great when you have a great year, but if you don't get any snow, you could be looking at having some real difficult times paying your bills. So, hourly leaves the contractor in a very insecure place. And if you think that's just on you, you're actually wrong. Because from a customer's perspective, hiring a contractor on an hourly basis doesn't really give them a whole lot to go off from so that they can budget and set aside enough money and funds to pay you. So, a lot of customers may you may get a little bit of push back one way or another by going with an hourly basis. Also, beware of collecting. Let's say you have a phenomenal year and you do a ton of snow plowing. A big red flag is make sure you invoice and expect to be paid immediately upon completion. And I say immediately, you can give them two weeks, maybe a month, but never extend credit further than that. Because from experience, if you extend that credit out and they get a big bill and then all of the snow melts, there's a lot less incentive for the customer to pay you. And I'm actually referring to actual commercial sites where I've worked on where I've had a 10 $12,000 bill at the end of the season. The snow melted and then the association dispersed. They sold the entire complex and Mr. Snowplower was left with no money in his pocket. So be careful of that scenario. Make sure you invoice immediately and expect to collect immediately and set that expectation up from your customer. Welcome to the boneyard. A lot of you guys go, "Hey, I want to see your yard." Which I never understand because we don't keep a whole lot of crap down here. TLB, dump truck, trailer, another TLB, excavator, another dump truck, packer, pickup truck behind me, another packer, another trailer. Exciting. Another skid loader. What do we got going on, boys? Can't get at it. So, uh, can you put the flip the cab down?

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