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There’s no question that the snow business can be stressful. It requires a lot of work in a little amount of time and comes with difficult hours, expensive equipment, and extremely expensive liability insurance. But you do it in order to keep cash flowing in the offseason—at least your plan is to make money doing it. If you’re not making money plowing snow, it’s a hassle you’d rather not deal with.
The key to snow business profitability is to figure out a system that will help you better run your snow operations while also maximizing your profits. The snow business can be very profitable and it does have great margins, but if it’s not run with a good system in place, then it can be a whole lot of headaches for not enough profit.
Here are a few important considerations when it comes to making money plowing snow.
Estimating Snow and Ice Removal Accurately
One of the most important points to recognize is that if you are not estimating snow and ice removal jobs accurately, then you are leaving money on the table. Because snow margins are huge, you may be “somewhat profitable” and not even realize you’re falling short of your potential. Any time that you are leaving money behind, it’s detrimental to the business. After all, the difference between 30 percent profitability and 40 percent is a big deal.
Whether you calculate jobs at a fixed rate or you base them per push or even per inch, it’s important that you produce accurate numbers when it comes to estimating snow removal costs. That means taking into account everything from the number of laborers you’re using to the equipment, the material, and the site conditions, among other key factors. There’s a lot of information to evaluate and producing an accurate estimate is admittedly challenging without a good system in place. But coming up with an accurate estimate is the foundation of your profitability.
Accuracy in Other Areas
Of course, it’s not just your job estimates that need to be precise. Accuracy matters all around when it comes to your snow operation. Here are other key areas where accuracy should also come into play.
- Accuracy in paying employees (and subs): If you’re overpaying your people based on the work they’re performing that’s obviously going to affect profitability. But it might surprise you to consider that underpaying can also hurt your business. How exactly? Well, snow labor can be hard to come by and the last thing you want to do is lose someone because you underpaid them due to a calculation error on your behalf.
- Accurate material usage and tracking: Do you know how much material you’ve already used and how much you have left at all times? That is vital information when it comes to ordering more material if it’s needed and ensuring that you have enough for upcoming jobs. Nothing will grind production to a halt like realizing you don’t have the material you need for your job sites.
- Accurate equipment usage and tracking: Similar to material usage, it’s important that you keep track of what equipment is being used as well as when it may need to be serviced. This will help prevent equipment malfunctions and failure. Downtime can be a huge hit to profitability and it’s something you want to avoid at all costs.
- Accuracy in record keeping: Accurate record keeping is absolutely vital in such a highly litigious profession as snow and ice management. GPS tracking, visual tracking with photos, a record of ground temperature, and other details are really important when it comes to combating slip and fall claims.
Failing on any one of these items can be a reason why some snow companies might not be as profitable as they could be.
Producing a Better Contract
While there’s no question that accuracy is of vital importance across your business operations, at the end of the day, it’s the information that goes into your snow and ice management contracts that is going to dictate how the rest of the job process goes. All of those accurate calculations would be for naught if they are not appropriately conveyed through your contracts.
The number one most important tip when it comes to producing a snow and ice removal contract is to be explicit in the verbiage used. Be incredibly clear about exactly what is included and don’t make any assumptions that your clients will know or understand the information you’re presenting without you spelling it out for them. Don’t worry about your contract being too long. Just be sure that you don’t leave something out.
In addition to including detailed information about the services being performed, also including site plans and push maps for your properties can be beneficial. This added feature eliminates any lingering questions by showing exactly where you’ll be working on site.
Using Snow Plowing Estimating Software to Enhance These Processes
From estimating snow and ice removal accurately to tracking data on jobs and even generating great contracts, each of these steps can be a challenge to do without a good system in place. You’ll simply be more prone to error without the support of a tool such as snow plowing estimating software to support your efforts.
By automating these processes you are eliminating the possibility of error that exists by doing them on scratch paper or even using paper spreadsheets. For instance, when it comes to estimating snow removal costs, with snow plowing estimating software, all you have to do is input specific details in order to let the system generate an accurate cost from which you can calculate your ideal rates.
Snow plow estimating software will also help you to be more profitable by allowing you to get billing out in a timely manner. That is absolutely huge when it comes to your clients paying more quickly for services. The quicker you can get your invoice out after a snow event, the more likely that it will be paid with no pushback. That’s because the event is still fresh in their mind, as are the services that you rendered.
In addition, in the future, the use of snow plowing estimating software will help you to be more efficient as you will not have to re-enter your contracts each year. You won’t be bogged down by duplicate data entry. Instead, you can spend more time evaluating which of your contracts were profitable and renew them based on that criteria.
In the end, it’s your choice. You can continue to run your business the old way and come upon struggles and questionable profitability, or you can know exactly where things stand and take control of the operation with a tool such as snow plowing estimating software.
If you’d like to talk about how Asset can improve all aspects of your landscaping (and snow removal) business, then give us a call at 800-475-0311 or contact us for a free demo. We’d love to talk about how you can stop leaving money on the table and make for an easier, and more profitable organization.
Image Source: Neave Group