During the heat of summer, the height of the busy season for lawn care, most business owners’ minds are far removed from the impending winter.
They’re thinking about how hot it is. How sweaty they are. How many fertilizer apps they have left.
The smart ones are thinking about how to make a profit in the Fall.
But the rock stars? They're preparing for snow season.
Here is a checklist to make sure your snow removal business will make the big bucks this Winter:
Diversify Your Contract Portfolio
There are three kinds of snow contracts:
- Per Push - you charge a set amount per push
- Per Event - you charge a set amount per event (can be multiple pushes in one event)
- Seasonal Flat Rate - you charge a set amount, regardless of number of events, etc., divide it up and charge monthly
When you strike a seasonal contract with a client, you’re gambling. Both sides are betting on the weather.
That's why you need to diversify your portfolio. Get more clients and different kinds of contracts, and you will make money no matter how much snow falls.
Contract Types: Playing Your Cards Right
If you charge a seasonal flat rate, you’re betting on low snow. According to Green Industry Pros, this model works best in areas that average at least 15” of snow per season. Too many events that hit too hard will start to impact your bottom line.
If you charge per event, you’re betting on several events with a low number of pushes. Too many hard-hitting events and you can start to lose money.
If you charge per push, you’re betting on a lot of hard-hitting events. Too few events or a limited number of weak events and you’re not making enough money to stay in the black.
Like a good stock portfolio, you want to diversify your contracts by offering all three contract-types.
You might want the majority of your clients to be on a seasonal flat rate. Sell the other options as well so that when the events start to pour in, your overall income increases to compensate for additional costs.
Create "Auto-Renewing" Contracts to Keep More Clients
Make sure to offer auto-renewal on clients’ contracts. You want to put the ball in their court to cancel. Year-over-year retention is best maintained by not rocking the boat. The number of people you can get on a silent auto-renewal, the better.
As snow season approaches, you can send an email or snail mail to auto-renew clients, thanking them for another season and reminding them of the terms of your agreement.
- Forgetful clients contracting another company
- Forgetful clients not understanding their billing this year
- Forgetful clients not knowing who you are when you start clearing their drive
The best benefit of auto-renewed contracts is that they create the path of least resistance. Water flows through the area of least resistance (i.e. between the boulders, not over them).
Customers are the same way. Once they’ve made a decision, it’s easier to maintain that decision than to re-make it. It's 1000 times easier to keep an existing client than to find a new one. Give them the opportunity to permanently make a decision and they’ll continue on the path of least resistance as long as your service quality remains high.
Equipment Inspections (that Will Save You Money)
The first event of the season is rolling in. Everyone else sees inconvenience, but you see dollar signs. You think you're ready to tackle it.
As your crew leaves the shop, their plow drops to the ground and starts scraping the pavement. Ugh. Should’ve replaced the hydraulic fluid and checked the seals.
Now the crew has to move from one truck to the other, wasting valuable time. They get themselves in the next truck. As they drive past, you notice a couple of gouges in the plow, speckled with rust. Should have been sanded down and painted last season. The rust is only gonna get worse.
"Don't forget to inspect before the season starts."
Start the season with your best foot forward... not whatever manages to slink out your door.
The Equipment Combine: Do It Now
The NFL ran their combine for 2017 in late February into early March. They started two full months ahead of the draft.
Now is the right time to begin your equipment inspections. You want to survey the condition of your assets before it’s too late to make a new plan.
If you're reading this in early fall, there’s barely a wisp of cool in the air. The best time to identify a problem is when you have the most time to fix it.
If you're reading this in the dead of winter, and you still haven't run an inspection... now is the best time.
Get all of your equipment out and begin visual inspections.
- Check welded points for integrity
- Check hoses for corrosion or leaky seals
- Check plow edges for excess wear and tear
- Look for tiny patches of rust and have sanded or filed and touched up with enamel paint.
After visual inspections, you can start on seasonal maintenance:
- Clean electrical connections
- Tighten trip and return springs
- Flush and replace hydraulic fluids
- Test/charge batteries that were left sitting
- Re-torque fasteners (once plows are installed)
Don’t put off inspecting your equipment. The earlier you start, the sooner you can address any issues. The longer you have to resolve a problem, the less stress it puts on you or your operations manager. There’s no feeling quite like knowing you avoided a Day One crisis by being prepared.
Download: Snow Preparation Checklist (Printable)
Quantity is King of Quality
Do you have the right amount of equipment for the amount of work you intend to do?
When you lack the necessary equipment, the quality of your snow service suffers first, then employee morale suffers. Unmotivated and ill-equipped employees do worse work. It becomes a race to the demoralizing bottom.
Evaluate pain points from last year:
- Was the volume of work too much for plow crews?
- Do you need to add an additional truck to alleviate that pressure?
- Were your guys getting injured because they had to use the wrong shovels?
Talk to last year’s crew leads about what was lacking. You’ll find that keeping your employees well-equipped will keep them happier longer. Nothing makes or breaks morale on a long event like your equipment. It either does everything it’s supposed to do and everyone stays happy or it fails and makes everyone sad.
- One back-up plow for every 5 plow-trucks
- One back-up truck for every 10 plow-trucks
By purchasing back-up equipment you plan for problems before they exist. This means you won’t be forced to make a "panic decision." Those kind of decisions are usually the expensive, regrettable kind.
While you’re inspecting your physical equipment, it’s probably a good time to begin inspecting your mental equipment as well. It’s been months since you looked at Service Autopilot’s snow module (or maybe this is your first season using it!), review the Snow Training webinars.
Start asking questions and learning now, so that you’re not panicking at 3 a.m. during an event because you can’t remember how to do something.
Why You Should Plan Your Master Routes, Bit by Bit
Got some auto-renew clients? You can start planning your master routes now. In Service Autopilot, you can find these under Scheduling > Settings > Master Routes.
You can create routes this year based on your service areas (for example: 2017 - West Plano).
By planning your routes as clients come in, rather than all at once, you save yourself the colossal effort of sorting hundreds of clients in one go. You can take this on the same way you would eat an elephant: one bite at a time.
Start working on your routes incrementally, adding people once a week as renewals come in and sales start to trickle. This isn’t to say that you won’t get slammed as sales come to a head in the fall but it does mean that you’re getting as much of the work done as early as possible.
Haven't tried Service Autopilot's software yet? Check out this free webinar and see how it will make money for your snow removal business!
Get on Your Supplier's Good Side
Start shopping your supply rates and renegotiating your agreements with suppliers. Maybe there was trouble last season with your supplier running out of salt or another product you needed, ask what they’ve done to correct the issue.
If you’re not happy with their explanation, it’s time to find a new supplier. Remember what I said earlier about the path of least resistance? Don’t stick with something just because it’s what you had last year, especially if last year’s kinks have the potential to grind this year to a halt.
Adapt to the landscape. Make sure you’re still getting the best deal on the best quality.
You’ve grown substantially in the last year, use that
to your advantage to push for a volume discount.
You’ve been with your supplier for a few years, see if you can establish terms for paying that are more lenient to help your cash flow.
You’re established in the field, let your supplier know that you’re ready to take on work others can’t handle when the season kicks into gear. Your supplier may hear of smaller (or less efficient operators) struggling to keep their heads above water. If they like you, they may send the extra business your way.
The final piece of snow prep is arguably the most important: getting the manpower to get the job done.
Hiring is also the biggest challenge currently facing the green and snow industries.
Unemployment sits at 4%. It’s legitimately difficult to attract and keep employees in the market.
How do you ramp up hiring?
The number one way to find and keep quality employees is compensation. Aggressive pay attracts higher quality employees, higher quality employees do good work, good work keeps clients and grows your business via word of mouth.
You’ve heard it said, “You get what you pay for.” It’s true. If you are lowest wage-payer in your market, you get the people who couldn’t hack it anywhere else (and probably won't hack it with you).
You might also consider an incentive-based compensation system. With a piece-rate system, you pay by the job completed. This encourages efficiency because it motivates your employee to work quickly: the faster he works, the more jobs he can do, the more he gets paid. It
maximizes your profit per man hour (and his!)
Before moving to a piece-rate system, make sure to consult the employment laws in your area to make sure that you do everything by the book. You can seriously undercut (or eradicate) your efficiency-based profits by breaking the law and getting fined.
Winter is Coming: Are You Ready?
"The best time to plant a tree is 20 years ago. The second best time is now."
There’s no time like the present to begin preparations for snow season. Prepare yourself, your business and your employees for long nights, hard work, and the highest profit margins your business has ever seen.
Remember to hedge your bets with contracts by offering multiple varieties. One client may win the table, but the house (that means YOU) always wins when you diversify their payment options.
Inspect equipment so that you’re prepared long before the first flake leaves a cloud. Keep in mind: Quantity is King of Quality.
Find the right supplier for your business and negotiate the deals and assurances you need for a successful season. Don’t settle for less than the best quality you can afford.
Use the key to effective hiring to unlock the potential of employees and keep them coming back year after year.
With all of these pieces in place, you are set to make boatloads of cash this snow season. Happy plowing!