Remember how much we used to hate snow plow trucks that used to clear the snow and destroy the snow castles we used to make on the side. The villain of our childhood now feels like a relief when snow begins to fall.
Our priorities changed; now we don’t stay at home in winters to make snowmen but need to go out to work or get groceries and other household things. Snow plow trucks feel like a lifesaver in the bitter cold weather.
Imagine how much the person offering snow removal services would earn every winter. We can figure out that it’s not uncommon for a snow plowing business to earn $50,000 or more per plow truck during a single Winter!
I know your “ears” have turned by reading this figure because this amount is more than many people earn in a whole year at their full-time job. Now you must be eager just to throw a plow on the front of your truck and start your own snow plow business, but hold your horses for just a moment.
Before you go to your local bank and ask for a loan for a truck and plowing equipment, you must know how the Snow Removal Business works and a few Dos and Don’ts to follow.
Source – IbisWorld
Tips To Run a Successful Snow Removal Business
Let’s begin with some useful facts to keep in mind when launching your snow removal business this winter.
Choose the right location for your snow removal business.
You won’t start a snow removal service in Vegas or Texas (obviously), but there have been incidents where people ruined a perfectly good business idea by choosing the wrong location. You need to start a snow plowing business in a city where snow falls more than usual so that you get work for a long time across the year.
Get the right license to run a snow removal business.
Here license means the driving license to drive a snow plow truck and business license to start and run a business in the city/state of your choosing. There are certain rules and regulations for running a snow removal business and driving a heavy and dangerous vehicle like a snowplow truck, so you need to get specific licenses.
Get the right vehicle and inventory for the business.
The most important element of any service business is the equipment that you offer the service with. So, when you are planning to offer a snow removal service, the most important equipment would be a pickup truck and the plowing mechanism.
Make sure you buy the best truck and equipment because dealing with snow will have a heavy impact on them, so never go for second-hand equipment as it would have already gone through a lot of wear and tear.
Digitizing your snow removal business is a must in 2020.
In the year when small kids have a smartphone, and almost every house has smart speakers, you can’t rely just on old school ways to get customers. You need to be present online and in the devices that your potential customers use 24/7.
Developing a mobile app for your snow plow business is becoming more mandatory than optional with each passing year. You need to show your presence on the internet because that is where people are looking for answers to all their problems, including snow troubles.
Always have a Backup snow removal setup ready.
Have you seen an angry mama bear protecting her cubs? A person stuck at home due to snow is almost as angry, and that will be the majority of your customer base. If you do excellent work, they’ll recommend you to everyone they know, but if you fail to deliver service, even if it’s not your fault but the machines, you’ll be seeing their wrath.
So, make sure that you have a backup snow removal setup ready in case your existing truck or plow gets damaged or breaks down. If you don’t have a spare, you should work in partnership with other service providers in such situations so that your reputation isn’t hurt in the customer’s sight.
Create an off-season plan for other seasons.
Not everyone lives in Alaska or Greenland, so you need to have an off-season plan to stay earning for the rest of the year. Although snow removal service is a very lucrative and high revenue-generating business venture, you need to have alternate earning models for when it’s not winter.
Snow Removal Business Model
Now that you know what to do and what not to do while starting a snow removal business, you should also know what business models you can choose from to launch your business.
Here are several different ways that you can make money this winter by plowing snow.
The Residential Snow Removal Approach
In the beginning, if you are tight on cash or wish to play safe with a limited investment, you can begin as a one-man operation with just you and your plow truck and keep expanding as you see more profits and more work. You can take up residential areas’ snow removal contracts and offer your services to the local residents.
These contracts often are made for the entire year for a fixed fee. For instance, if you make a deal for $500 to clear the locality roads for a year, then it’s fixed. This fee doesn’t factor in how many times snow falls during a year. Now whether you clear the snow every four days or just four times a month, you’ll be making $500 for the year from that client.
You can also make a contract in which it is specified that this much number of removal jobs will be done in $500 and anything above that will need extra payment so that you don’t end up in loss in a record snowfall year.
The Commercial Snow Removal Approach
If you are more ambitious and wish to earn top dollars, then going the commercial route is advised. You create similar contracts as above but with commercial spaces like big corporate buildings, shopping malls, golf courses, etc.
With commercial clients, you’ll be plowing parking lots and huge open spaces instead of residential driveways. Such clients will pay top dollar for your high quality and consistent snow removal service. And the best part is that the contracts may be limited to winter months like from November to March, but you will get paid whether it snows or not.
Pricing Model For Your Snow Removal Services
There are three pricing models based on which you can charge and set your commercial or residential contract. Here are the three models:
Seasonal Rates: With this pricing model, you will earn the same amount, whether there is a record snowfall or no snow at all in the year.
Per Inch Rates: The price of your service depends on how many inches of snow you need to clear, so for snow 50 inches deep, you’ll make five times what you’ll make for clearing 10 inches of snow.
Hourly Rates: What if there is very little snowfall in a given year? Then you run the risk of making a very low profit. Instead, you can charge on an hourly basis, and every hour you spend cleaning will be billed. This model is widely used when you are a sub-contractor, offering your equipment and services via some other main contractor.
The Snow & Ice Management Association (SIMA) predicts the snow removal service industry’s growth at the rate of 3.5% year-on-year.
Starting a snow removal service could be a very lucrative business if you know what you are doing and have all the right cards in your hand. Make sure to think the idea through as the initial investment is significant in this business, and so are the profits once the snow falls this winter.
Author – Polly Dixon