The best way to maximize profits and consistently grow your business is by knowing how much to charge for snow removal.
Use this guide to help you base your prices on factors like:
- Profit goals
- CPA advice
- Client feedback
- Break-even point
- Target market insight
- Your business' ideal pricing model
Plus, by the end of this article, you'll know how much to charge for snow removal to increase profits and ignite instant business growth.
Price Your Snow Removal Services In 10 Minutes Or Less
Get Your FREE Pricing Calculator1. Determine Your Minimum Snow Removal Prices
How long will it take to finish the job?
Compute job length based on the hours it would take one guy, working alone to complete.
This way, you can divide by the number of crew members to get an accurate gauge of how long it will take, real-time, even if the crew size changes.
By the way, you can easily access your average snow removal times for similar job using the #1 snow removal software.
Plus, with Service Autopilot you can quickly see how clients align with your profit goals. In turn, you don't have to spend hours crunching numbers on a calculator.
What are your overheads for any one job?
Take a look at a few of the many overhead expenses you'll encounter:
- Truck and tires
- Fuel and drive time
- Software and offices
- Business and car insurance
- Wages (e.g. snow professionals and office staff)
2. Account for Profit
Even though profit setting goals vary from business to business, these are the main factors influencing how much profit you can get from your local market:
- How much are people willing to pay for snow plowing?
- See what competitors are charging to gain a general consensus.
- Are you a good salesperson?
- How well does your online presence sell for you?
- What’s the supply and demand in your area?
- Did they call you right before a snowstorm?
- Is the only other snow removal business fully booked?
The profit you're able to generate largely depends on the level of demand in your area. For this reason, it's important to see what your competitors are charging.
While you shouldn't base your prices on the competition, it's important to be aware of what's going on in your market.
After setting profit goals, remember to incorporate a little wiggle room for errors and unexpected costs.
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GET YOUR guide now3. Select a Pricing Model
You want to get familiar with the snow averages in your area. This will help you decide which pricing models will generate the most work and profit.
Some pricing models work better with lighter or fewer snow events, and for others, it's the opposite.
As always, remember to complete a winter preparation checklist during pre-season snow visits to:
- Maximize profits
- Minimize liabilities
- Identify potential obstacles
- Ensure no steps are skipped
- Fully evaluate every property each new snow season
Also, keep in mind, you can utilize different pricing models as you deem fit for the job. Usually, it's best to apply different models to different clients to ensure maximum profits no matter the weather.
Per Push
A per push even is when you charge for each time you clear the lot. Keep in mind, this can be multiple times during a single event.
- Pro: Since you’ll get the most money for the least amount of effort, this works best if a client wants you to push multiple times during a single event, .
- Con: It's not great if they only want you to push after a ridiculous amount of snow has built up.
Per Event
Charging per event means you charge per event. In other words, even if you push multiple times during the event, you'd still only charge once.
- Pro: In an area with many low volume events, this can be intensely lucrative.
- Con: In areas with a lot of heavy volume events, you can get crushed by event-based pricing. Also, if it never snows, then you don’t get paid.
Per Inch
Much like per push, this is when you charge per inch that's cleared.
- Pro: It's a flexible pricing model. You can charge by the event (e.g. total snowfall for the event) or by the push (e.g. how much you cleared). In short, you'll set a rate per inch.
- Con: This requires a lot of experience to get right, which means you'll need to know your average snow removal times.
Seasonal Contracts
A season contract provides a total price for the season. Typically, it's paid out in monthly installments.
- Pro: Convenient for the client because it’s a set-it-and-forget-it plan. Also, it ensures you'll come out ahead in a low-snow year.
- Con: This can hurt you if there is a lot of snowfall. You must set limits. Don’t have an open-ended contract. Be sure to set a number of events or pushes that leave room for profit.
Multi-Season Contracts
A multi-season contract is a longer-term contract, which usually happens in commercial plowing. While it's not common in residential, you could make it work.
This model should include an annual rate increase of AT LEAST 10-15% to account for costs increases and inflation.
For example, travel, labor, and equipment costs have recently risen by about 10%. Always account for these costs in your multi-seasonal contract.
- Pro: Secures your client for a long time, builds a good relationship, and it can be very profitable long-term.
- Con: Hard to put together, and it requires a good history or a lot of trust to sell this.
Hourly
Hourly pricing is a simple method, especially for job costing. You'll charge for your time on the job per person. Then, you'll bill every event and push by the hour.
- Pro: This makes it really easy for you to ensure you’re making enough on every client. After all, you’re directly setting the price on the same metric in which you measure profit (e.g. by the staff-hour).
- Con: It can be harder to squeeze in a healthy profit. Also, certain clients will pressure you to work faster when hourly, which is dangerous and not great for business.
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The Dangers of Pricing for Commercial Properties and Parking Lots
As you know, commercial properties take more time and materials than residential drives. In turn, you'll need to consider the size difference between a residential driveway and the average parking lot.
However, there's more to it than size:
- Will there be cars parked in the parking lot?
- Will you need a skid steer to push and lift snow?
- Will they demand emergency clearing during a snow event?
- E.g. hospitals, commercial centers during business hours, etc.
Keep these factors in mind when bidding commercial properties. Remember, it's important not to overextend yourself.
If you don’t have a way to service everyone, you’ll end up skipping and/or juggling properties. Additionally, this will burn out overwork your crew, and anger clients.
Since snow is a demanding business with long work hours, it's important to do you best to remain dependable with consistent high-quality snow removal services.
Plus, clients are likely willing to pay more for these reliable high-quality services.
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Properly Set Your Snow Prices for Maximum Profit
Exploring how much to charge for snow removal doesn't have to be a complex process.
This article has shown you a simplified process of how much to charge for snow removal based on profit. Plus, use this information to help determine how much to increase prices on existing clients.
AS ALWAYS, check in with your trusted CPA (i.e. Certified Public Accountant) before launching any new pricing changes.
Now, you know how much to charge for snow removal to meet profit goals and grow your business today!
Related: How to Easily Increase Snow Removal Prices
Originally published Oct 24, 2017, updated Aug 2, 2022 10:12 AM