With your bases covered, a snow removal business can be a strong revenue driver.
Most snow removal and snow plow providers augment their income with warm-weather-work such as construction, landscaping, excavating, and irrigation to round out their annual income. While snow removal makes up only a percentage of their income, it can make covering the cost of equipment, marketing and customer service challenging. Becoming a sub-contractor is always an option. It affords you the ability to focus on doing the work and spending less time on running a whole business. No need to find new customers, chase invoice payments, cover fixed costs that come with a full business, setting up software and so on. If you still want to jump into the snow removal business, there are some important things to keep in mind before attaching a plow to your truck and hitting the pavement: 1. Your Market
Who are you going to target as customers for snow removal? Are you going to reach out to residential clients or go for the large commercial accounts? Perhaps you have clients from other services you provide during warmer weather you can reach out to. They already know you and could be more willing to work with a newcomer. The commercial clients, on the other hand, are a tougher nut to crack and usually have a longer sell cycle to close the deal.
Knowing who your competition is will be equally as important. Competing with seasoned operations with a fleet of trucks and equipment, weather tracking capabilities, and more can increase your cost of entry or competitiveness to the point where you can't make a dent. Especially on the commercial side. If you’re planning to put your efforts into the residential side, can you source customers in your target area to keep the jobs coming without the need to drive out of your way to the next customer? All in all, you just need to have a clear vision of where you want to focus your efforts. 2. Equipment
How do you determine the right amount of snow removal equipment to investment in? Determining a cost for running equipment in a snow plow business is a difficult exercise considering what a wide range of equipment is available. It is possible, though, to turn a profit and make worth your while with just one plow truck and a few other basic tools while others opt to have multiple trucks, skid steers, and front loaders; the answer to this question is, as always, it depends.
What kind of equipment are you familiar with, have access to, and can you afford? Do you own a truck that you would be willing to plow with? Do you have a skid steer that you use for other jobs? It's not just about investing in the purchase of this equipment by the way. You have to factor in maintenance and repairs as moving snow puts a lot of added pressure on your truck's moving parts. Don't forget about insurance.
There are tons of resources online to research the right equipment for you so be sure to take a solid look at what you have and what you'll need. A quick Google search for products and YouTube reviews will turn up plenty of outlets to find the tips you need and the products they are trying to sell. Outside of that, you can always refer to industry sources for largely unbiased opinions.
As referenced in this article from Snow Magazine, "There are a lot of people crossing their fingers that nothing is going to happen. And when something does happen, it’s a nightmare – an expensive nightmare. And it all could have been avoided if they had taken care of this ahead of time."
If you're thinking: I already have insurance on my truck so isn't it covered? Not if you're plowing as business for others. And maybe not even for your own property since policies vary. As soon as you attach a plow to your truck, the liability changes and your insurance company likely hasn't built that into your policy. In order to keep yourself and your customers covered you'll need to add some form of commercial policy which would require you to pay your premium upfront. Another expense to consider with your equipment and other business expenses. Unless, of course, you have another option for insurance coverage.
4. Pricing and Contracts
A few common questions for those new to the snow plow business is: How much do I charge for snow removal? How do I create a contract for my customers to clarify the terms and make sure we're all happy?
Every area is different and this is another factor to consider when researching your competition. As a smaller, more nimble operation, you have the advantage to potentially charge a lower fee than the bigger guys since you have less overhead. On the other hand, with fewer jobs, you may need to take in more for each job to make it worthwhile.
Surprisingly, this article from the Houston Chronicle has some helpful tips. Do a local search for your area and to get a sense of the average charges you'll be up against in these areas. To help minimize the challenge in this area, you can sign up to be a provider for a service that sets pricing and terms for customers you can work for.
5. Unusual hours Unlike other typical jobs or businesses, there is no set schedule for plowing since you're at the mercy of the weather. Snow events could come at any time or none at all. You may have long stretches without incoming jobs before a large snow dump occurs that leaves you working for multiple days straight. This can also make it difficult to plan out your routes and be efficient. Add to that a varying degree of preferences from customers who want their property plowed or shoveled anytime there's snow and others who have a snow depth trigger. I can get a bit unwieldy unless you have a way to manage these requests. 6. How do I find a sub-contractor job? Of course, just about every town has a snow removal business serving them with subcontractors. The upside is that rather than competing with the bigger guys, you can join them and benefit from their influx of business. In fact, you might be able to work for them and still take extra jobs on the side depending on work load and whether they are OK with it. The most important thing is to look for this kind of work before the season starts to lock in your contract. If not, you'll need another source to find the customer requests.
Checkout this PlowSite.com forum to learn more. Job sites can be a good resource to find these opportunities. Established businesses will cast a wide net to find the right talent out there because it's tough to find good workers. In all, it's important to do your homework before you set out to turn snow into money. Make sure you have a source for customers and insurance to get the jobs and get them done safely. If you know you have customers in mind already and want to start working with them reach out and ask. Make sure you have the proper equipment and proper financial cushion for maintenance. Of course, keep in mind that flexibility on your job hours is great but the next heavy snow fall could be on a holiday.
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