We all know what it’s like to be out on a hot mower, at the height of a sunny August day. When the heat is inescapable and unbearable, we live for the brief air-conditioned drive between jobs and dream of colder weather.
You’ll get a chance to do just that when the seasons turn and winter’s chill forces green grass into dormancy. In fact, if you play your cards right, you can earn a steady income working through the winter. Now is an ideal time to think about adding snow removal to your business.
We’re not quite yet at the end of the busy summer season when you’ll know which members of your crew you’ll be looking to rehire next spring. Your hope is that they won’t disappear over the winter months. If you start up a snow and ice service now, you’ll be able to keep them on all year.
Snow and ice services can be just as large and complex as any design/build, maintenance, or irrigation operation. It will take planning and forethought to ensure that your new snow and ice arm will be as successful as your other operations.
John Allin, a snow and ice consultant based out of Erie, Pennsylvania, says that snow removal can be a very profitable business. “It actually has a much higher margin than landscape or irrigation work, generally speaking,” he said. “Contractors need to treat it as such, with its own set of expenses and its own revenues.” In return for that time and effort, not only do you get a new profit center, you get to keep your most valuable employees, and maintain a connection with your clients throughout the winter months.
Those expenses start with buying plows for the front of your trucks. Your maintenance costs will continue because when other companies have put their fleets to bed, yours will still be active. If you’ve purchased or rented any specialized snow equipment for the season, you’ll have to care for those too.
You have to consider your labor costs, your fuel costs and your deicer costs. It’s also worth noting that de-icers can put extra weight on your maintenance budget. “The ice control products are very corrosive, and that has an economic impact on your equipment,” said Maurice Dowell, president of Dowco Enterprises, Inc., Chesterfield, Missouri.
Dowell expanded his existing snow and ice service to residential customers last year, and he says the margins aren’t quite as good as those for commercial work. “The margins were higher than cutting grass, obviously, but it took a lot more managerial oversight and a lot of equipment,” he said.
So if it’s more work for less money, why is Dowell bothering? “With the H-2B program going sideways, we hired a lot more Americans this year,” he said. “We really needed the work to engage them fully; it was a trade-off.” It may have run his managers a bit ragged, but he won’t be worrying about meeting demand this spring.
Another part of the trade-off is that clients want a single source for all their management needs. Adding snow and ice removal to your portfolio can box out competition and give you the opportunity to touch base with your customers during the winter and get your foot in the door with new property owners.
That said, there is no reward without risk. With snow and ice services, the swings in weather patterns are typically larger. For example, according to the NOAA, (National Oceanic and Atmospheric Administration) from the start of October 2013 to the end of April 2014, 58.9 inches of snow fell in the Boston area, compared to the 43.8 inch average for the same period. The next year, a record 110.6 inches fell, but this past winter the snowfall was only 36.1 inches.
Your business has to compensate for the feast or famine nature of the weather. “Don’t you want to make money during a mild winter too?” asked Allin. “There are ways to price the services out so that you don’t have the wide swings in revenue that used to be considered part of the snow and ice management business,” he said.
There are a few different types of contracts. Customers with flat rate contracts will pay a single fee for the whole season, whether it snows 10 inches or 60 inches. Others have some sort of per-push rate. They may be paying you for each visit, or for the number of inches you remove. That type of contract will provide the lion’s share of profits in a heavy season.
The wealth potential of per-push contracts can be awfully tempting, but don’t get so caught up in dreams of massive profits that you risk losing your shirt. If you have nothing but per-push contracts, and it hardly snows, you’ll lose money that season. Similarly, if you only have flat rate contracts, your revenues will stay flat when it snows hard, even though your costs are climbing through the roof.
You also need to make sure that you and the client understand exactly what degree of service you’re going to provide. If a flurry drops an inch of snow, do they expect you to come clear it? Do they want deicing? Are there any times when they know the property will be too busy for you to work on?
Doug O’Bryan, owner of O’Bryan Grounds Maintenance in Akron, Ohio, is also discerning about his clientele. “We probably get about a quarter of the work we quote,” he said. “If we’re getting it all, then we’re quoting too low.”
O’Bryan covers his costs by having a mix of about 30 percent flat rate to 70 percent per-push contracts. The terms of your contracts, and the exact ratio of flat to per-push will vary depending on the particulars of your business and how much risk you’re willing to take.
Apart from price, O’Bryan says one of the chief factors in adding clients is their location. “If I already do two or three plazas on a corner, I want to get the rest of the work on that corner,” he said. “Because if we have a loader stationed nearby, and it’s only seeing two or three hours of use, if we can get some nearby accounts and use it for four or five hours, all the better.”
Getting more use out of the same equipment is a definite plus for landscape contractors entering this business. Skid steers and trucks are the easiest to convert to pushing snow, but your mowers and mini skid steers can also see use with plowing or snow blowing attachments. Running a mower-turned-snow-blower over a parking lot bears many similarities to running a mower over grass.
There are other aspects of the business you’ll have to read up on. For one thing, there’s de-icing. Deicing efforts generally consist of putting down a chemical compound that will be absorbed by water and lower its freezing point, so it can’t form into ice.
When to de-ice and how much to apply is a perennially thorny question for contractors offering snow and ice management services. There are a lot of factors to keep in mind. “If the temperature is in the single digits, versus the upper 20s, different things are going to happen at different times,” said O’Bryan. “If you’re melting snow that has a high moisture content, it’s going to thin the salt out much more. You also have to take ground temperature into account, which is a huge concern.”
Any contractor who has applied a pre-emergent weed control can tell you that ground temperature changes more slowly than air temperature. It may be 35 degrees and raining, but if it’s been 15 degrees for the past week, that rain will turn to ice as soon as it touches the chilly ground.
De-icing can prevent buildup entirely if the ratio of de-icer to precipitation is high enough, but pre-treatment also makes a difference in cleaning up a whiteout. “Used prior to snowfall, it keeps the snow and ice from forming a bond with the pavement surface, even if you walk or drive on it,” said Allin. Ice that isn’t gripping the surface is considerably easier to shift out of the way.
“Train your crew like you would train your landscape or irrigation techs,” says Allin. “You wouldn’t send a guy that you just hired out to repair an irrigation system; you can’t do that with plow guys either.”
Of course, the best trained employees in the world can’t help out if they aren’t there when you need them. The fact of the matter is that snow plowing is often a time-sensitive, third shift job. Old man winter doesn’t care when your alarms are set; he’s throwing a snowstorm on his own immutable timetable.
Still, your client’s parking lot has to be cleared before his employees show up at 9 am sharp, so you’ve got to get your crews geared up and out the door at 3 am. Crew members will miss shifts, trucks won’t start, and you have to be prepared to solve those problems right there and then.
Being prepared is the operational word. “Anything you can plan for, or write down ahead of time saves you that extra worry when things go wrong,” said O’Bryan. “We expect a certain number of absences, so we have a certain number of extra employees on standby. They might not go out, but a lot of times they do.”
Late starts are a common stressor for snow removal work, but there are others. Long storms can mean long shifts, and it’s important to remember that your employees are only human. A tired mowing crew might make for a sloppy cut, but a tired plow driver is a serious accident waiting to happen.
“You have to be cognizant of the fact that your employees are out working in life threatening conditions, at ungodly hours, for clients who don’t really appreciate the difficulties we face,” said Allin. On long shifts, a policy of frequent breaks, and a cap on the number of continuous hours any one employee can work will go a long way towards avoiding accidents.
Keep in mind that safety is fundamental to this entire service. There are many reasons for us to offer snow and ice management services. The margins are great, our equipment can be easily adapted to the task, we get to keep our employees year-round, and keep in touch with our clients. But at the end of the day, the best reason to take it up is because it lets us keep people safe.