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Questions Regarding my Small Snow Plowing Business

Discussion in 'Introduce Yourself to the Community' started by SnowRemoval1, Nov 10, 2014.

  1. SnowRemoval1

    SnowRemoval1 Junior Member
    from Chicago
    Messages: 16

    I have some large issues and its due to my poor planning. So, I'm running through my numbers this evening and its not looking so hot especially if we have a weak winter.
    -$4,000 Snowdogg Plow
    + $565.00 on DEFINITE CLIENTS (10)
    +$840.00 on POSSIBLE clients each time it snows 2". (11)
    -$500.00 a month on Commercial Insurance
    -$100-200 gas a month

    See, here are my problems and I'm not sure what the best way of going about this is. Last year, I sub contracted out my work and made 75% returns by not having a truck, plow ect..well, the sub contractor is now working as a sub contractor for Everest Snow Management which is a huge company in Chicago. He bought a large truck and plow and I thought I was out of luck. Since I have small apartment/condo parking lots, I bought a 2014 Nissan frontier for both lawn and snow and put a 10% down payment on a SnowDogg snow plow which comes out to $4,000 total. So, my clear issues are the weather....if it doesn't snow enough I'm screwed. I have a $200 car payment a month as well as I want to earn enough money to pay the plow and I got a quote from progressive of $6,000 a year which comes out to $500 a month roughly for full coverage/liability insurance. Naturally, I can prob get that down as I have a broker looking into it but my age of 19 doesn't help. I'm in a bad spot as I started this too late and didn't get enough ads out and am feeling screwed and plus there is a low baller out there who is screwing us all and taking my clients that I thought I would have. So, what do I do?

    Do I either
    a). Continue with the purchase of the snowdogg snow plow, do the at least 10 lots and make $500+each time it snows (which is ****) with crazy insurance and potentially work with a sub contractor making $55 an hr to help pay costs.

    b). Waste the 10% down payment on the plow and don't buy it and the guy who worked under me last year who is working for Everest has an extra plow truck which is a 2005 Chevy Colorado with 180xxx miles with a small western plow. The problem or maybe good thing is this would have no insurance on it and id be responsible for my 10-20 small parking lots as well as getting paid by him to do his 5 around the area. Keep in mind that these are ALL located within 6 blocks of each other.

    c). I back out completely of this plowing seasonal business, say screw the customer and prepare for an early lawn season where I make extremely good money.

    Any options in between? Such a horrible problem I'm having right now. The clients aren't coming in as I thought they would due to someone who doesn't pay all the overheads taking the business away, I thought I would be covered under personal auto like State Farm told me ahead of time before I bought my truck and plow, and I thought I'd be making more than $500 each time it snows. For me, that is not a business and I'm not sure what to do. I don't want to take the risk but for me $4-6k for insurance is too dam high. That would be AT LEAST 50% of my profits IF I ended up getting all my 21 clients. Not to mention the year would be a total loss after paying for the plow. And say we don't get 7 snows, I'm even in MORE of a loss. Then if I use someone elses truck with no insurance, I'm responsible but saves me 4k-6k a year AS WELL as the money for not buying my own snow plow...and I can use his plow for my own 10-21 accounts. Then I don't want to screw my customers over as they are my main ones for YEARS and I also have them for lawn service. But even then if I go through with the plow I bought, do my clients, work as a sub contractor for another business, will it be totally worth it in the long run.

    I need some advice guys. Totally lost on what to do and the season basically starts in 2 weeks.
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    I wouldn't pay cash for the plow,3-4 loan on it will cost you 1,000.00 a yr. Insurance,you should know if your a business they won't cover you. Little lite on the customer list. How are your prices to everyone else.
  3. SnowRemoval1

    SnowRemoval1 Junior Member
    from Chicago
    Messages: 16


    Theirs a photo of 70% of the lots I do. I do between 2-5" is $55 for the parking lot and between 5-8" $65 for the parking lot. Sidewalks in front including salting (light) are $20 for 2-5" and $25 for 5-8".
  4. k1768

    k1768 Senior Member
    from NJ
    Messages: 556

    If you "screw" the customers that did sign up with you, what makes you think you'll still have them as lawn customers next year?
  5. SnowRemoval1

    SnowRemoval1 Junior Member
    from Chicago
    Messages: 16

    Exactly....now you can see the tough situation I'm in.
  6. PremierSnowPlow

    PremierSnowPlow Senior Member
    Messages: 125

    I'd start out by buying a used plow instead of brand new. Find cheaper ins, its out there. And as the saying goes, "takes money to make money". If you don't see a 100% profit return this year, learn from your mistakes and plan better for next season so that you can actually turn a profit. You're young still, get a business plan together and you'll do fine and even take away the " low ballers" business when they take the money and run.
  7. Mr.Markus

    Mr.Markus PlowSite Fanatic
    Messages: 5,782

    Few people do well in this business right out of the gate, building a business takes perseverance .$500 profit per push isn't lavish lifestyle money but it's profit...
    It's like saving for retirement, the sooner you start the better you'll do...
  8. SnowRemoval1

    SnowRemoval1 Junior Member
    from Chicago
    Messages: 16

    Totally agree. But I just heard from another client and they are broke and don't need plowing. There goes $200 of that $1,500 projected. Ugh.
  9. MK97

    MK97 PlowSite.com Addict
    Messages: 1,057

    Not to kick you when you're down, but the whole approach you took doesn't make any sense.

    1) Who buys a frontier (a new one at that) for commercial snow and lawn service? I think it barely qualifies as a half ton truck. I don't imagine it will live very long under commercial use. Finding a good used 90's Ford, Dodge or Chevy would have been far better for just starting out. There's a reason there are still tons of them being used for plowing every year by all size companies.

    2) Full coverage vehicle insurance is NOT commercial insurance. You need both, so plan on upping that insurance figure.

    3) Scrap the Snowdogg option, and lose that $400 as a life lesson. Use the other guys truck and cover your accounts along with his. Is he charging you for the use?

    This is really the only way I see you not losing your truck and plow which will be a 7 year reminder on your credit report, if it's a light season.

    Don't screw over your customers. A pissed customer will be very loud and make sure they let everyone know you're a crappy service provider.
  10. PremierSnowPlow

    PremierSnowPlow Senior Member
    Messages: 125

    Also, don't be mad that you lost a client, because you'll pick up more during the season. This year I've had 3 people call me saying that they no longer need it due to moving out of state. I signed more to cover them already.
  11. Banksy

    Banksy PlowSite Veteran
    Messages: 3,113

    Again, dump the debt from the Frontier you shouldn't have bought and get something a littler older and cheaper that is better suited for plowing. That's where I would start and then the commercial insurance won't sting as bad. Insurance for you will be higher than for an old timer like Grandview :drinkup:. And if you did get a real plow truck, you could very possibly plow for somebody else in addition to doing the accounts you already have. Plus, many commercial type places have already lined up their plow guy for the season. This is why July is a better time to figure this out.

    You've been given some advice and you either argue or justify why you made the decisions that you did. Do you know a guy in Kalamazoo, MI by chance?
    Last edited: Nov 11, 2014
  12. jimbo64

    jimbo64 Senior Member
    Messages: 194

    Good Advice. It's too late to cancel your customers and hope to get them back in the future. Do what you have to do to keep what you have and spend the winter thinking out a better business plan.
  13. plowguy43

    plowguy43 PlowSite Fanatic
    Messages: 5,281

    Even if state farm didn't drop you, being a personal policy they wouldn't have covered a loss if you were making revenue while plowing. Personal policies will usually cover if you do a neighbor's driveway for free only.
    Second- your truck insurance will only cover what is done while in the truck, meaning if you step out and shovel a walkway you will need a separate GL policy to protect you against slip and falls.

    If you are starting out, buy used trucks and used equipment. Heck I make good money in my business and am going on 8 year's and still buy used trucks. In 2012 I finally purchased a new plow but I'm still running it.

    Any business owner before spending a penny needs to come up with a business plan. Then they need to look into what their costs will be to run the business in order to find out what to charge for their product. That is what the apartment owners are doing right now- they got your price and are shopping for others to see what the best option is.

    At this point I'd call around and find a landscaper and ask for quotes on all your properties and sub them out. Make what you can this year and learn for next year. I say go this route so the service doesn't suffer (hopefully) and you can keep the accounts, plus the liability for any accidents is on your sub (make sure they have insurance and list you as an additional insured). Then next year you'll still have your accounts and be in a better position all around to make money.
  14. mark268

    mark268 Member
    Messages: 81

    OR.... buy what you want to buy, have fun and take it as a loss this year. Live and learn. At least you will have a new truck and plow
  15. derekslawncare

    derekslawncare PlowSite.com Addict
    Messages: 1,003

    With the photo you posted, I say ditch the truck and plow for it. With no bigger lots than you are servicing, why not get a ZTR/ATV plow for one of your zero turn mowers (which I'm sure you already have) and plow with that. When done, throw it back on the trailer or drive it next door to your next account and do again. Put down salt with a walk behind spreader or a 5gal bucket and the "chicken feed" method. Haven't priced them, but would guess the ATV plows can be had for around $1000.00 new, less used off of CL.

  16. Plowtoy

    Plowtoy Senior Member
    Messages: 929

  17. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    State farm does cover you while plowing with a personal policy on your truck.
    You can also get liability insurance thru them for around $600 for a Million policy.
    There is a catch with them, you can only plow out residential driveways and anything commercial with more than 5 parking spots they will not cover it.
  18. thelettuceman

    thelettuceman PlowSite.com Addict
    Messages: 1,218

    Take this advice !!!!
  19. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    don't get me started .
  20. derekslawncare

    derekslawncare PlowSite.com Addict
    Messages: 1,003

    Unfortunately, I think you may be too young and inexperienced to realize JUST how over your head you are. I think you may still be trying to find a PAINLESS way out of this situation when instead, you need to be looking for the LEAST PAINFUL remedy to your problem. I would get rid of the new truck that you can't afford and the plow for it. Go back to the dealers that sold them to you and explain your situation, you may get lucky with the plow. If it hasn't been used, you might be able to get all your money back (minus the installation charges) provided it is still able to be sold as "new". As for the truck, I'm sure that is going to cost you a few thousand to get out of. See if maybe they will put it on their lot and sell it to someone who will take over your payments or something. Again, I don't see you getting out of the truck cleanly, but spending a few thousand to save your (and your cosigner's) credit rating will be worth it down the road. Hope this helps.