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Gross and Net Profits in the Snow and Ice Industry

Discussion in 'Business Fundamentals' started by forestfireguy, Dec 8, 2010.

  1. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    This post may push the envelope of topics people will discuss with potential competition online or with those who they do know and trust even if they're not even close to being competition but I'll ask anyway.

    What are mid sized operations running as far a gross and net from their snow operations, I'm primarily interested in information from contractors who run in the same gross billing arena as we do, say between $750,000 and 1.2 Million per season in commercial property work. I'm really interested in knowing a national average, and how we compare to it. If you are inclined to answer but don't want it public please PM, I would share our as well to satisfy curiousity. To keep it an apples to apples thing we provide full service, plowing, removal, shoveling, salting, sidewalk apps. I don't care for dollar amounts except that they fit in the range I mentioned.

    I say in advance, I'm not at all interested in playing a whose is bigger game, just the percentages. I know my costs are too high especially as it relates to prep work, and anyone interested in sharing the precentage of gross that goes to prep, i'd be especially interested in that. And any ideas on how to reduce this segment of cost, we are currently running about 425 hours of labor in prep, I'd guess that by the time we're 100% ready that number will be 500-550 hrs. These hours go to such things as serviceing equipment, repairs, stocking salt bins, calcium depots and staking lots, we plan(hope) for about 850K in billings for an average season of accumulation.
    Last edited: Dec 8, 2010
  2. maelawncare

    maelawncare Senior Member
    Messages: 871

    The more lean you are the more profit you will make. New equipment eats into profit. It also depends on your area.

    I love mine, im pulling 50% profit but my area is pretty small.
  3. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    I appreciate the reply, I am most curoius about how Gross compares to net........That 50% you state, which is it?
  4. maelawncare

    maelawncare Senior Member
    Messages: 871

    net what? net profit net loss net income. the word net can be used many ways. Read my post, 50% profit.

    Gross is the total you amount you make. I net profit 50% of my gross after i pay my bills and guys. Worded better?

    But i only run 2 trucks. So its pretty small operation. My first year in biz i profited only like 10%. And it just went up from there. But i highly doubt it will go past 50%
  5. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,032

    He's asking what your gross is because it makes quite a difference when you go from plowing with your daily driver and you driving it, to running a full service 500k plus snow business.
  6. Rich Arlington

    Rich Arlington Member
    Messages: 76

    Forest Fire Guy,
    as a nationally recognized consultant I have huge amounts of data to help you benchmark... I will discuss this data free of charge you can call me @ 814-490-4700
  7. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276


    That is appreciated, you and I spoken before. You were assigned as our "guide" when we rejoined SIMA last year. I will try you next week, we are extrememly busy getting ready for the weekend storm, could be rain, snain(snow+rain), ice, striaght snow.......The weather guessers don't know yet.....


    Thanks, it is a very different animal.


    Thanks for the calification, and for this thread my intention is to gain insight into the differences between gross profit(before labor, materials, repairs etc ect) and net( the bottom line after all costs are taken) Thanks!!
  8. Subseven

    Subseven Member
    Messages: 44

    Exactly. That's like me and my brother right there.
  9. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157


    I believe Brian from SIMA did a study this summer about this (or something very similiar). I'm sure you could get figures from him in the ranges your looking for. Since Rich (AGMG) works alot with Brian, this maybe the information hes refering too.
  10. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276


    Thanks, I'll let you know when I speak to him next week. How's Maine? Hyundai treating you well I hope?
  11. tjlands

    tjlands Senior Member
    Messages: 574

    Whats up Ed,
    Been busy..Anytime you want to talk about numbers give me a call.
  12. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276


    Same here, extremely busy. Still looking atg new work for the winter, but I always wonder about a contract signed past mid november, seems they always have some kind of grief, slow payers, don't want salt or this or that.........

    So far so good, but we haven't had anything to speak of, 1 full salting round and a few apps at a place far west we took on this year.....
  13. tjlands

    tjlands Senior Member
    Messages: 574

    Told ya- January=first snow......

    Still getting calls on a daily basis, Have some good chances to pick up accounts but I am
    at capacity now and new sub contacts are below par.

    I will say I am not surprised that two nationals called me today with over 25 sites locally that are not covered....Dec, 15th,..... now thats great customer service
  14. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    I'm being selective with signing the new stuff now, it's very ard to turn down work. I have guys begging for work, most of them I'd use in a heartbeat, I just can't seem to get anything solid of any size......
  15. tjlands

    tjlands Senior Member
    Messages: 574

    seems the subs down here have disappeared.
    On another note my "pre-season" costs jumped today as Two trucks went down,
    4 wheel drive in one F350, looks like transfer case and a tranny on a 2003 GMC.
    Either one will not be cheap.
    Still probably collateral damage from last year.
  16. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    Thats tough......

    I don't know if you have a mechanic on staff or not, or his skill level, but consider Jasper for the repairs once you have a real good diagnosis. We just put a Jasper trans in a 4x4 550, saved about $800 and got a 2 year, 30k warranty, any local trans shop would only warranty 3 months since they consider it a "heavy" truck........
  17. Dwan

    Dwan Senior Member
    Messages: 879

    33% overhead, 33% labor and 33% profit. My profit is removed from the business and never used in anyway to support it. Brake downs are paid out of overhead as 10% of that is put away for eq maintenance and replacement.