Are you the gambling type? Sure, many of us like to head to the casino from time to time to play some cards or roll some dice, see if lady luck is on our side. But there are also some financial decisions in life that are a bit of a gamble. When you get a mortgage, do you want to pay a fixed rate that never changes, or do you want to gamble on interest rate fluctuations and pay a variable rate? There can be similar decisions to make when choosing a company to remove snow from your commercial property.
A while back we talked about preparing your property for winter. I think there are some valuable tips in there, so I hope you have a look if you haven’t already. But once you’ve finally made the decision to hire a company like Landscape America to take care of your snow removal needs, there’s an important piece of business to take care of: the snow removal contract.
With this contract, you’ll have to make this key decision, which can be a bit of a gamble: do you want to place your chips on paying a lump sum for the entire winter, or go all in on paying incrementally by the inch, depending how much snow falls during each storm? To decide, you’ll have to consider the individual needs and service requirements of your commercial property.
Lump sum: There are no surprises. You’ll settle on one fee for the entire season (up to a specified increment, i.e. 65” of total snowfall), giving you peace of mind in the knowledge that your snow removal will always be taken care of and that a huge, surprise storm won’t throw your budget out of whack. Plus, the advance payment allows the contractor to always be prepared.
Incremental: It’s simple math: a small snowfall means a relatively small price tag for snow removal. If you pull out your trusty farmer’s almanac before the winter starts and it projects a milder, snow-light winter, an incremental contract might be right for you.
Lump sum: If we don’t get a lot of snow, you may wind up paying more than you would have if you’d paid incrementally.
Incremental: What if you put too much trust in that trusty farmer’s almanac and we get a surprisingly snow-heavy winter? You’d wind up paying a lot more than you expected. There’s also a drawback for the contractor, which can snowball (pun intended) into another drawback for the client: without the guaranteed income of the lump sum payment, the contractor might not be able to plan for all the necessary expenses of a given snowfall – especially a major storm.
Ultimately the decision is yours, but from experience, we find 3-year lump sum contracts to work best in the long run. This is because the costs tend to even out for both client and contractor thanks to light or heavy snowfall from one winter to the next.
Whether you want to place your chips on lump sum or incremental, we hope we’ve made your snow removal contract decision a little easier. And remember, placing your chips on Landscape America is never a gamble.