YES or NO to large contract

Discussion in 'Business Operations' started by grass123, Oct 8, 2012.

  1. grass123

    grass123 LawnSite Member
    Messages: 18

    Hi, I am the owner of a snow removal company in southern NJ. I do light grass cutting in the spring-fall & snow removal in the winter. I have a very large commercial account in NJ that brings in over $100,000 depending on the amount of snow. I use ALOT of my grass money towards the end of the season to "fund" the snow removal [hence being behind on my bills]...buying new equipment, fixing any equipment, getting all the plows ready, buying salt etc. Not to mention it is SUPER STRESSFUL. I can be down there for days straight when we do get a storm and its on my chest when/if equipment breaks, people dont show up for work, whatever the "problem" is since Im the owner its resting on me. Im ahead for a few months then falling behind again & for bringing in that much money, I dont think it should be that way. My overhead is alot since its such a large account. Payroll is high, expenses are high, tax on the money is really high !!! So my question is Im thinking about not doing the commercial account this yr. Of course I would lose the contract and thats whats making me want to keep it. I am young (30yrs old) and could do small residential/commercial account right near my home, have ZERO overhead/stress, no fixing equipment & trucks till 2am, and maybe actually "enjoy" the snow for once. Also if i do NOT do not do this contract i can downsize my shop (expensive rent) that i only keep cause of snow stuff i need to store. BUT when you get a check for $100,000 it is nice to be able to pay somethings off . im TORN please give some input, Ive been going back & forth since last year !!!!
  2. Sprinkler Buddy

    Sprinkler Buddy LawnSite Bronze Member
    from Florida
    Messages: 1,185

    I don't deal with the snow here in FL but it sounds like you have made your mind up already. It's not worth it when it's all said and done to you.

    Some things are worth more than $$$, let it go and enjoy life and don't be enslaved by it.
  3. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Messages: 10,737

    How much of that $100k is profit?
    Posted via Mobile Device
  4. grass123

    grass123 LawnSite Member
    Messages: 18

    KrayzKajun....its hard to tell EXACTLY...after payroll, fixing equip., and catching up on bill i was behind on (due to all my money funding the start up of snow) I have some, can be $20,000 give or take...
  5. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Messages: 10,737

    Definitly not worth the headaches foe $20k in the end.
    Posted via Mobile Device
  6. ANA Proscapes

    ANA Proscapes LawnSite Member
    from NH
    Messages: 68

    I do alot of snow removal. I know what you are talking about with all the headaches. If you are talking $20,000 pure profit for 5 month worth of actual work then why not keep it? It sounds like the real problem is you don't have enough work through the summer to have enough money to start up for snow? If you know how much your start up cost is for winter then you should be saving money every month or take a chunk of the $100,000 and bank it. Accounts like that don't come your way every day. Just my 2 cents. Good luck with your decision.
    Posted via Mobile Device
  7. alexschultz1

    alexschultz1 LawnSite Bronze Member
    Messages: 1,579

    Can you work on increasing the size of your snow removal company?
  8. Ben Bowen

    Ben Bowen LawnSite Bronze Member
    from PNW
    Messages: 1,166

    Sounds like it's not worth it to me. You can work for someone else and hate your job, if you are working for yourself you should at least feel like you control the stress.
  9. Pietro

    Pietro LawnSite Senior Member
    Messages: 855

    Snow is great, but breakdowns kill you. I do like contracts for parking lots but I hate them too because they HAVE to be done. Unless you own front end loaders for other reasons (Which you need for big parking lots) I can see it being feasible to rent or lease em just for snow. Honestly if I were in your shoes, I would just sell off lots of equip, and hire subcontractors. They have their own stuff.....less for you to store and maintain. Ive heard of people having those monster contracts and they dont even own a plow. They sub it all out. You just need the cash to pay the subs when theyre done.
  10. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Messages: 2,763

    Is the contract hourly, per push, or per season? Also are the people plowing subs or employees? If you have equipment sitting 6 months out of the year maybe you could find a use for it the other six months to make up any budget shortfalls. If you are clearing 20k from plowing I would have to say stick with it. Some companies lose money just to keep their workers going during the winter.

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