mafiaboy3;421955 said:
Alright so I'm a 15 year old very interested in the snow removal business. My grandfather's cousin has 10 trucks for plowing and hes has millions. That's about all I know about him.
Although looking through this forum i see people charging 80 - 100$ an hour and still wondering if they will make a profit.
Anybody mind listing the liabilities? I understand gas is high and also salt costs a good amount of money, but is that what really prevents some people from making a profit? I know insurance is also sometimes high ( like 1200$ a year) , but after a week of almost full time work it should pay off for itself...( shouldn't it?)
Also is it more profitable to have many residential lots or a few commercial lots?
( Don't flame me because I'm a 15 year old looking at a forum where there's adults with full time plowing jobs:realmad: )
I'd appreciate if you'd answer those questions.
Welcome! You presented yourself very well, and you asked legitimate questions. Don't worry about only being 15.... continue writing as you have (inquiring, not "know it all"), and you'll make a good name for yourself.
People debate residentials versus commercials as much as Ford vs Chevy vs Dodge. Some hate residentials, some love them. Many have found the pot of gold with commercials, and others like me focus a majority of attention on high numbers of residentials. Sorry to be wishy washy, but the argument can go either way for which is more profitable.
As for making money, commercial properties often have seasonal contracts where you're paid regardless of snowfall. Many people also do "per push" which would obviously make income dependent on weather. At least contracts give you a set amount for budgeting purposes. My commercials are season contracts, and my residentials are per push.
For liabilities, there is the high premium for commercial snowplowing. A teen even getting car insurance today should be expecting $2000 or more in annual premiums (and people with teens or actual teens here can give better #'s). Only when you get into your mid 20's do rates start getting better, and then people venture into the commercial vehicle market, and rates are often much higher due to liability on the road.
Fuel is expensive, but it's been my experience that it shouldn't exceed more than 10% of the daily gross of a storm. I would generally blow through $100 in a 10-12 hour event, which is easy enough to stomach when pulling in $1300 for 1 truck. Vehicle maintenance can be pricy, though many are more truck savvy than I am and do most of the stuff themselves.
Trucks are expensive, and then there are plows. I've never run a beater truck because I've always considered older trucks liabilities when I need them to work in the worst of conditions (and needless to say I've always had newer trucks... not always NEW, but newer). New plows can run $5000 or more today, but after reading so much here I've found that we can get completely refurbished units for half of that, and they're essentially new.
$80 to $100 per hour would probably be a tough rate for someone who has a lot of overhead, although if you consider your first paragraph (the guy running 10 trucks)... his 10 trucks operating at $100/hr are bringing in $1000/hour. Even if he's paying guys $25/hr, he's still bringing in $750/hr, which would be some pretty good coin if he has a good business set up. There's money to be had, and income varies based on region & overhead. That $80-100 would do fairly well for me, but it might not be so good for someone with lots of drivers, lots of trucks. I'm generally in the $125-$135 area, and it works out well.
Read, watch, take notes, and don't rush into this stuff, and you could do well if you decided to get into plowing in 4 or 5 years. Take care
~Kevin