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new plower start up costs

Discussion in 'Business Fundamentals' started by petesplow, Jan 19, 2003.

  1. petesplow

    petesplow Junior Member
    from ontario
    Messages: 6

    I am interested in snow plowing as a winter job. My question is what the minimum start-up cost is for used equipment(preferably cdn. funds). A second question is how would I attract clients, either residential or businesses and is it possible to make at least 75% of the equipment costs back in the first season.
     
  2. John Allin

    John Allin PlowSite.com Addict
    Messages: 1,327

    It's possible to make that much back in the first year, but it depends upon how much snow you get and how many events you'll work....

    However, a more accepted percentage would be about 35%.
     
  3. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Answer to your last question - Yes, but probably not. You'll need at least a 1/2 ton 4x4, a plow, commercial vehicle insurance and commercial liability insurance. Costs vary widely, but as an example: (USD)

    Truck ( 12 yr old) $6,000
    Plow (used/average shape) - $1,200
    Commercial Vehicle Insurance: - $1500
    Commercial Liability Insurance ($300,000 mimimum): $1,000

    Total $9,700k USD ($7,000 CAN?)

    You'll be pretty restricted to what accounts you can take (no commercial, no salting/sanding). Figuring a $7,000 investment and an average charge of $30 per drive, you'll need to do 175 pushes to recoup 75% of your investment.

    Anybody from Canada offer a better scenario, or am I off on my conversion?
     
    Last edited: Jan 19, 2003
  4. chtucker

    chtucker Senior Member
    Messages: 618

    Don't forget repairs, maintainence, fuel and such...plus a savings for replacement equipment. Business expenses, stamps, envelopes, tax preperation, phone, cell phone, paper. OH and what about your time spent marketing, driving, plowing and maintaining.


    You are not going to get rich quick
    :D
     
  5. fordman

    fordman Senior Member
    Messages: 327

    I think you exchange rate is a little off there Mick. $9700 Us is more like $15000 cdn.
    Here's my breakdown
    decent used truck(10-12 yrs old)-$8-$12k
    plow(used)-$1500-$3000
    salter(used)-$1000-$2500
    insurance I find will vary substantially depending on your age and who you go with.
    Overall I would say you'll need atleast $15k to start up. As for advertising once you get a truck put signs on it and you could also do up some flyers. Or if your interested in a specific accounts just go and talk to them.
     
  6. petesplow

    petesplow Junior Member
    from ontario
    Messages: 6

    I can find mid-late eighties broncos, f150's, and f250's for around $2500 plus repairs needed since they are only $2500. Would these trucks have the power needed to plow?

    Pete
    Thanks
     
  7. chtucker

    chtucker Senior Member
    Messages: 618

    I think they would be good plow trucks. Remember you have to find the truck side mount as the plow manufacturers probably don't sell them anymore. Also remember when you say repairs that your customers expect you to show up. You must take care of every questionable mechanical before it snows. You will lose customers faster than you get them when you are not there.
     
  8. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    :eek:

    Oops, I was figuring the "wrong way" on the conversion.

    I was also figuring he wouldn't do any sanding to keep costs down.

    Botton line - plowing is not a "get rich quick" proposition.

    And Howard is right, you will need to allow for repairs especially starting with used equipment.
     
  9. fordman

    fordman Senior Member
    Messages: 327

    I'd go with atleast an F250. This truck will have plenty of power for plowing. You shouldn't have a problem getting a plow mounting bracket from plow manufacturers as long as you get a ford that's an 87 or newer. Anything older then that body style might be hard to find a mount for.
    By the way were in Ontario are you? I know of an 8' Fisher MM for sale, it's $1900.
     
    Last edited: Jan 19, 2003
  10. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    I agree, get a 250/2500. I'd wonder how much of a truck you could get for $2500 ($1700 USD). Anything around here worth having in a 3/4 ton 4wd is at least three times that.

    I allow $10,000 USD for a good used truck when I go shopping.

    The other thing that got me when I started was gas. Shoving snow takes the gas mileage right down. Then you have to front the cost until you get paid. Plus, you can't just put in a few dollars at a time since most of your plowing is at night. At least around here, there is nothing open till 7:00. Right now, a tank full of gas is $40.
     
  11. wyldman

    wyldman Member
    Messages: 3,265

    You can start as a sub for a larger company.This will get you some experience,a steady paycheck (usually),and you don't need the liability insurance,which is quite costly.

    Find an older truck,I'd recommend an older chevy 3/4 ton,as they are cheap and easy to fix.Try to buy a truck the has not be plowed,as the ones that have are beat to crap at that age.

    Find a decent used plow,give it a once over (better now than in a snowstorm),and install it on the truck.

    Get commercial insurance.Not that much more than personal.If your subbing for a larger company,then they will have the liability insurance.

    Gas,repairs,coffee,spare parts,etc can add up quick,so be prepared.If money is tight you could get a company credit card to help out while you wait for the money to come in.

    Where abouts in Ont are you ? Drop me a line,I may be able to help you get started.I could assist in finding a truck,and checking it out for you if you wish.I also have a few good plows and salters for sale.May also have some work for you if you are interested.Drop me a line.I'll give you my number.

    wyldman@idirect.com
     
  12. farmertim

    farmertim Member
    Messages: 95

    Another way to get into the business is to find an older plow guy who would like to get out of his business and buy into it over time.
    The good ones would appreciate the legacy of all that work to go forward, the crappy ones usually young need to be checked out carefully.
    Case in point
    I "bought" 35 contracts from a "professional" plower so he said, he gave me the contacts and I agreed on 25% of those I signed up as the purchase price.
    I spent the first 3 hours in a sh%# storm of his last years customers and how bad a job he did and how after feb 22nd he quit showing up at all.
    I did pay him a finder fee, he did call me to take them over, but it was no where near the 25 %.
    I had to do alot of referals and fast talking to assure these new clients I was going to be better than the guy who recommended me.
    good luck, build slow, good work will keep you busy in the long run!!!
     
  13. PINEISLAND1

    PINEISLAND1 PlowSite.com Veteran
    Messages: 664

    If you could get into a used rig with plow for 4-5 K, which is do-able around here, and sub for someone, it may happen. Most guys around here work for 40-50 per hour, with at least 100 hrs per season, so after fuel, insurance, etc.,you may be able to pay off 1/2-3/4 of the expense the first year.

    On a really good year, maybe even put away some money for an upgrade...
     
  14. fastjohnny

    fastjohnny Senior Member
    Messages: 654

    (man I hate when the server is too busy and you loose what you just typed:mad: )

    Here's my story, I have about $8000 invested in my rig, plus about 50 hours of my time this past summer redoing the truck and assembling the plow.

    My advise, buy the best you can afford even if you can't pay it off this year. Make it look good, it will bring better customers. I bought a new plow, original Blizzard model, old stock, reworked it to bring it up to current specs.

    Hunt for bargains, talk to other plowers, and anybody you know who plowed in the past. Picked up a buyer's salter last night for free, it's got a seized bearing in the spreader, at the bottom of the shaft, motor turns freely. I'll get it into the garage and worked over next time I get between storms. All we gotta due is plow the guys drive a couple times when it gets bad. And he lives close. He gave up plowing, and the way it looks, the last time he drove in from plowing, that's where his rig has set, all grown up in the weeds, and junk all around, but the spreader is in really good shape.

    If you have the ability to do your own work, mount the plow frame, do some rehab on vehicle, etc, you can save a ton of startup costs, and have a better rig in the end. I would stay away from the $2500 plow rigs. You'll be looking for a new one every year.

    I think JAA is right on, 35% for first year recovery towards decent equipment.

    Hope this helps

    John
     
  15. MLB

    MLB Senior Member
    Messages: 110

    lots of good advice

    I started this year. Found a really clean 90 GMC 3500 dually with 8' dump. 454 TH400 with 84,000 miles on it. Western frame/light wiring/controller. Paid $8800 (US) for it. Paid another $800 for an older Western Pro 8' and $360 to have it mounted and serviced. (frames didn't matchup, some cutting and welding needed). So I was ready for less than 10k for truck. Insurance, about what's been said.
    I'll second going the sub route. I bought the truck to do landscaping work and only bought the plow after a fellow landscaper told me he'd sub me if I got set up. Really nice to observe someone else that knows what they're doing vs my stomach churning as I wing it. I've no doubt I'll make MORE money subbing for him than I would have making 100% cash on my own. The different conditions and factors that affect how long it's going to take to do a particular property don't sink in till you've done a few. I would have seriously underbid most propertys (we do comm only), not to mention I'm still uncomfortable charging people what I really need to survive! I'd rather show up and do the work for 8 hours than spend 10 minutes convincing someone why I need to charge them $150 for their lot.
     
  16. NoStockBikes!!

    NoStockBikes!! Senior Member
    Messages: 215

    Re: lots of good advice

    Amen, brother. Here's to subbing! :drinkup: Let somebody else deal with the customer.

    Sound clip: I deal with the *&%$##@$ customer!
     
  17. Arc Burn

    Arc Burn PlowSite.com Addict
    Messages: 1,139

    My question is if you could make 75% back your first year,can you afford to put that money right back into the biz.?I make decent money snowplowing but realisticly it just gets me through the winter,i'm comfortable mind you but not rich,with all my obligations outside the biz,i could never put that kind of money back.(ex. rent,utilities,snowmobile,4-wheeler etc.)not raggin on ya,just wondering if your asking the right question is all,all the numbers from the post's look about right,so good luck!
     
  18. toolin

    toolin Junior Member
    Messages: 23

    Hey Pete,

    Think i could give you some updated info as we just got into the business 2 yrs ago.

    To get started small, truck, (preferably older, as they do take quite a bit of abuse) plow and small salter. Could easily get all this going for around 12,000 - 15,000 CND easy.

    As far as getting accounts, weve had great luck dealing with different tiers of govt. (ie. municipal, provincial, federal) Most of these deals got out in the form of tender (contracts), so they are likely to be advertised in the paper. You might also wanna try merx.com, the CND govt tendering website. Do a search for your town there, see if anything comes up.

    We got our first contract with the local housing authority, doing full service snow removal work (sidewalks, all lots, salting, snow removal, etc.) Started out with about $55,000 of equipment (3 trucks, trailer, bed salter, 2 atvs for sidewalks, other odds and ends) and had all the equipment paid off in 3 snowfalls. :drinkup:
    So, if ya get lucky, things can be quite good. Not sure if its a strickly local thing, but ppl around here pay a premium for quality snow removal service.

    Any other questions, just let me know here.

    Btw, where ya from?