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Analyzing Seasonal/Monthly Bidding Strategies

15:46
22:19
381.2K views

At 15:46 in

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

What happens here

The host discusses seasonal/monthly bidding as the most secure option for contractors. This method involves a fixed lump sum payment for the entire season or monthly installments. Contractors should calculate the average number of snow events in their area (e.g., 17-19 events for Minnesota in his example) and base their bid on a slightly higher number to cover potential fluctuations. Snow events outside the contracted period (e.g., October or April) are billed as extra. He also mentions some contracts may include clauses for customer refunds if actual snow events fall below a minimum, but emphasizes that monthly payments still ensure a steady income for the contractor.

Goal: Structure seasonal or monthly contracts for consistent income and contractor protection.

What they say

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Good. Got it. And you didn't have to look at Todd's. All right. I'm I'm going to guess I'm going to get dinged by YouTube for saying so many times in this video, but whatever. I mean, it was just his shirt, actually. But anyway, this is a great opportunity for me to talk about the third bidding system that you guys may be experiencing and that's monthly and or yearly. And so what we're going to talk about is those as one lump sum. And here's how you do that. You've got to look at how many snow events you get in your typical area. So in Minnesota, we get anywhere from 12 to 15 snow events. So, I'm going to put together a a bid based on 17 to 19 events. That way, I'm protected. And that is literally how we do it inside the industry. Now, you have to figure out in your local area how many snow events you get. And it's going to be different than my area. Northern Minnesota gets more snow. Lake effect areas get more snow. So, be very careful that you get this number right. Now, when you go to put your bid together on a perime basis, if it's a yearly contract and they say, "Hey, we need to allocate for every month, well, then you start at least, this is the way we do it in Minnesota. We start in November and we go through March." But here's the beauty of it. If it snows in October, we get bonus money. If it snows in April, which it did last year, we got 19 in. We get bonus money above and beyond. So you define the parameters of how many months you're willing to provide snow plowing and snow service under this lump sum. So let's re-review this thing. I get 17 to 19 average events in Minnesota. I figure out how much it costs every single time it for me to go out and plow on a per event basis. I sandwich all those together and I give that to them as a lump sum. That could be for a year and if they want it for a monthly then I just divide out how many months of service I'm willing to provide. Any service that I provide outside of those months I get to invoice on a per time or per hour basis or however you guys see fit. So that's how you do it. Now this is a little bit dangerous to you guys. And what what I mean is is here's something that you guys are going to experience. If you go way over on your snow events, you should put a clause in the contract that says that you get paid extra. But a lot of times that that clause won't kick in because you just don't get enough snow to activate it. And here's another thing that you guys may may experience is some associations…

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