Overcommitting your fleet can lead to bad feelings, lost contracts and even lawsuits but by figuring out your capacity for the storms hit, you can avoid a world of trouble.
“The classic mistake is overcommitting,” says Phil Harwood, president and CEO of Pro-Motion Consulting based in Detroit. “People do that because they really don’t think through the potential demands. They know it but they don’t really systematically address it.”
Harwood gives the example of a pickup truck scheduled to work eight hours. “When (contractors) are estimating, it’s a one-hour lot, it’s a two-hour lot and they start adding up all the times. And they say, ‘OK, that truck is booked.’ They might factor in heavy storms; they might not.”
The problem is that during a heavy snowfall, the truck might end up with 24 hours’ worth of work, Harwood says. Add in the extra unknowns of demanding customers and breakdowns, and the contractor’s truck is over capacity. “They’re not accounting for that, so they’re really going in with wishful thinking that everything is going to go smooth. They don’t account for the demand that’s going to eat up that capacity. They take a very amateur approach.”
When that happens, and companies aren’t delivering the service they promised, they can lose the contract. And if there’s a slip and fall, they can end up in court for failing to follow industry standards. “An attorney is going to say ‘You should have known better and shame on you, you greedy contractor, you overcommitted yourself,’ Harwood says. “The lawsuits in this industry are unbelievable and they come even when you’re doing the right thing. You don’t want to give them any reason.” The results can be extremely lengthy cases that eat up a lot of money.
Even if a contractor doesn’t end up in court, the impact of a broken contract can have long-lasting effects. “The big one is losing your reputation,” Harwood says. “You can’t grow your business or get new contracts. Short-term, it’s service failure and losing your contract and that revenue.”
Think ahead.
Harwood will share his expertise from years in the industry at his workshop, Advanced Snow Management Focus: Equipment Capacity & Managing Expectations. He has spent 15 years in the commercial snow industry, and has been a fulltime consultant for six years. Starting as an owner in the green industry, he now builds educational material for the Snow & Ice Management Association. “I’ve worked with hundreds if not thousands of contractors on snow issues, pricing, estimating, capacity, planning. I think that’s widened the knowledge base I have – seeing what works and what doesn’t and what some of the best practices are,” he says.
During the session, Harwood will share his equation for figuring out the unknown. And yes, it will involve math. “My attitude and my MO is that I want to give people real tools, meat and potatoes, something the can take action on,” Harwood says. “I’ve been to way too many education sessions that are just rah, rah sessions but there’s nothing to take home and act on. I want people to come out of my sessions armed with a whole lot of tools and information they can do something with.”
His method is to factor in the big variables like unknown demand from clients and build in unused capacity. “You need to have unused capacity,” he says. “If you have no unused capacity and you’re going into the winter, you’re screwed. Something is going to go wrong: demand, accidents, a sales opportunity that you want to jump on. Is there a cost to that? Of course. But it’s a bigger cost not to have it.”
Harwood will walk contractors through the process and formula for figuring out used and unused capacity, and show ways to build in unused capacity like equipping area managers with trucks so they can jump into action in case of a breakdown or heavy snowfall. “Instead of having them run around in a Prius, give them a pickup truck and an e-blade and shovels so they’re really like a Swiss Army knife,” Harwood says. “People don’t think about that. They think excess capacity means I’m going to have a truck sitting in the lot with no driver.”
Advanced Snow Management Focus: Equipment Capacity & Managing Expectations is 10-11:30 a.m. Oct. 24. To register, click here.