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How do full snow companies make it?

Discussion in 'Commercial Snow Removal' started by 94gt331, Feb 5, 2012.

  1. 94gt331

    94gt331 Senior Member
    from usa
    Messages: 293

    How can snow companies seriously make this buisiness a year around buisiness. With the risk of winters like this how can you survive. I'm talking about bigger companies with loaders and 20-30 trucks etc. How do u keep guys working all winter when it doesn't snow. I mean i guess you guys have contracts that u get paid wheather it snows or not. I only had to plow 1 storm so far this winter and did some ocassional salting.
     
  2. CGM Inc.

    CGM Inc. PlowSite Veteran
    from Ontario
    Messages: 3,590

    Go big or go home I would say!
    Also we are not "just" getting paid to plow snow!

    We carry liability, site checks, we are on 24/7 stand-by, etc.
    Not the whole effort is with regards to snow amounts per season.
    Just like an insurance......
     
  3. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    It can be tough alot of the snow only companies utilize a good many subs to spread out the risk as well, either paying them hourly or per push, some just act as a GC on the pushing & just salt only, which depending on your market may be the majority or your work anyway. I know of some that just manage the work, own nothing but a computer, etc. Everyone has their own business model which may or may not work in your market, season snowfall amount & contract structure.
     
  4. RepoMan1968

    RepoMan1968 Senior Member
    Messages: 439

    no such thing . it's called a spinoff , enterprise , etc.,. they're call snow brokers . they try to separate you(contractor) from your $$$ b y agreeing to their terms .

    AKA property management
     
  5. got-h2o

    got-h2o 2000 Club Member
    Messages: 2,439

    Seasonal accounts.
     
  6. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    10-4 on that! Its tough but you need to be smart. We're busier in the winter (when its snowing) but we're still out doing site checks at 3am a few times a week with the melting run off freezing up. I wish I would have kept one of our Fisher 1000's for that, its a pita when your only loading 1 ton of salt to spot salt here and there.
     
  7. coldcoffee

    coldcoffee Senior Member
    Messages: 776

    That's going to be the million dollar question...In my 25 years I haven't experienced a winter like this one. I know a guy who spends a 100k per month x's 12 just to keep the doors open, snow or no snow. This won't put him under, but it will be interesting to see what adjustments he makes. I know another guy w/ 2 million in bank notes...he's ready to jump off a bridge. I've heard rumors about a couple of other big outfits & it doesn't sound good.

    One major problem that I've seen in the past when a season gets near the end or a mild month occurs, the reliability of subs showing becomes a big concern. The longer guys go w/o working, the more inclined they are to ride the fence, meaning going elsewhere for other work. If the plowing should happen to fit into their new work schedule they'll probably show, if there becomes a conflict w/ the two schedules the contractor often times doesn't become aware until they don't answer their phone or pages. There is usually a penalty clause in their contract for no shows, but it's not usually enough to keep it from happening.

    No doubt, next season will be quite interesting...but what happens if this weather becomes a 3-5 year cycle, the opposite of what we have experienced through last year?? Time will tell.
     
  8. RepoMan1968

    RepoMan1968 Senior Member
    Messages: 439

    01' '08 were write offs here
    '96 '09 '10 were phenominal $$$
    win some , lose some . we grab a mid sized seasonal to keep it neutral
     
  9. coldcoffee

    coldcoffee Senior Member
    Messages: 776

    I think it was '89 or '90 we were having January temps hitting near 70*. Extreme unseasonable temps is nothing new here, but almost an entire season is. I'll be fine w/ what I have...I'll just be walking to the bank as opposed to running. It's been interesting how the market has changed over the course of time. My areas of preference, it's almost hard to even find a per push contract for the last 8-10 years or so...so I'm expecting & looking forward to some adjustment being made w/ the decision makers when it comes time for renewal.
     
  10. RepoMan1968

    RepoMan1968 Senior Member
    Messages: 439

    keep thinking "3 yr. seasonals" keeps things regular
     
  11. cod8825

    cod8825 Member
    Messages: 91

    Hopefully this mild winter will help with price point negotations next year. Maybe it will allow some of the contractors who might not be doing everything quite right and such to get out of the market and allow the prices to go back up some. Here in Kansas City I wouldn't mind if a couple of the snow only contactors were not in such a position to reduce pricing points next season.
     
  12. Matson Snow

    Matson Snow PlowSite.com Addict
    Messages: 1,985

    Seasonal and All-inclusive contracts.....Saltings..In this area we have salted north of 10 times....Snowfall Insurance.....The Larger companys also play in the Derivitive Market to Hedge their bet against Snowfall....

    But...All and All it has been a Pretty Crappy Winter in terms of Revenue Generation.....payup
     
  13. 94gt331

    94gt331 Senior Member
    from usa
    Messages: 293

    Well it's almost the end of the season, for me anyway. I took all my plows of the trucks. Only made $4000,00 this season from only 1 storm and 3 saltings. So how did you big companys that only plow for a living make it. Well i will be hanging out in lawnsite now. See you next winter.
     
  14. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    If you a big snow only company you'll make enough to let the stuff sit all summer. And some of them lease the equipment so it's gone at the end of the season.
     
  15. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,046

    There are quite a few snow only companies around and they own a lot of equipment and also utilize subs. It only works where you have seasonal inclusive contracts which around here are hard not to find. There is so much snow only equipment in this area that it would make your head spin.
     
  16. scottydosnntkno

    scottydosnntkno Member
    Messages: 87

    A concept that is hard for many people to understand and follow is budgeting and saving. Snow is a seasonal business so you have to plan for off season and off years.

    My main business is a window tinting company which is the opposite of snow its summer seasonal. Proper planning and budgeting is key to success as well as not looking at all the income as profits.

    The snow business is not the business to put your last 5k into just because you have a truck. You need enough financial liquidy and backing to run ins fuel payments etc for at least 3yrs if you want to makr this into a career. So many new guys see the years like last year where you make a killing and want to jump in to make a quick buck. All. My accounts are per push or hourly and i did just fine on 3 pushes total. Yes i didnt "make" money this year based on what i spent but i didnt lose money as i functioned off of the business savings. I could do 4 yrs with this years lineup without making a dime and be fine, but my goal is to add one new truck with some new accouts each year.

    Proper financial planning is the key to making it in the snow business, and like i said not 100% relying on it to pay the bills the first couple years.
     
  17. bugthug

    bugthug Senior Member
    from Pa
    Messages: 268

    Does it snow in blair county?
     
  18. thelettuceman

    thelettuceman PlowSite.com Addict
    Messages: 1,216

    I am a small 1 man operation with a small overhead. I use my truck for junk removal when it is not snowing. I am paying the bills but not making much. On the other hand, I am not ready to jump off of a bridge. I plan to stay small.
     
  19. Neige

    Neige Sponsor
    Messages: 2,198

    Yes there is such a thing, I am one of them. We own all our own equipment, and the only work I sub out are my sidewalks, and these guys are very well paid.

    That is some good advice, but I must admit I do not understand the concept of only charging your clients on a per push, per inch, or hourly. This would make sense if you have no contracts with these people and they call you out of the blue for a service call. There is no commitment from either side, and it will get done when the contractor has time. But as soon as you have a contract, that stipulates you have to clear every time at a predetermined trigger, and it needs to been done by a predetermined time, how can you not have a minimum charge for this? As a contractor you are now committed to have the proper equipment, personnel, insurance, .....etc, ready 24/7 for at least 150 days ( our contracts are for 180 days) There are real everyday costs involved to have this in place, our costs are just under 5 grand a day. That's right its going to be sunny and 42 degrees today and I will have to do nothing for any of my clients, but it still cost me $4,863.10 to be ready in case we did get snow. How does it make any sense if you are contractually obligated to preform a service, and just because you were not needed it cost the client nothing. You need to have some kind of payment once you sign a contract. It can be a minimum 10 push, 10 inches, or 10 hours, kind of like a retainer for your services. You could divide it over 5 months, so that at the end of the month if you had no snow you charge 2 pushes, inches, or hours. There are many ways to do it, but at least you end up with a payment for your contractual obligations. All this to say, the only reason I am in this business is being all seasonal.
     
  20. CGM Inc.

    CGM Inc. PlowSite Veteran
    from Ontario
    Messages: 3,590

    Well said! Must be a canadian thing with the contracts :drinkup: