It’s snow season, and you might be asking yourself how to make the most profit from your snow jobs.
Honestly, other than properly pricing your services, it all has to do with your estimate.
You can have everything right in your snow business…
… And yet, you still might not make enough profit to break-even.
More often than not, the reason for this is your estimates.
Even if your pricing is in the sweet spot for your market, you still won’t make enough profit if you don’t provide proper estimates that fully account for ALL of your costs.
While conducting proper estimates is important for any industry, it’s especially vital for snow removal businesses. This is because you need to know how much the job is going to cost you before you accept it.
In this article, you’ll find out how you should be conducting snow estimates - as well as the right order you should be completing your steps.
A Request for Proposal (RFP) applies to both residential and commercial clients - BUT ESPECIALLY for commercial.
For commercial clients, before you even step foot on your potential client’s property, you should ask them to send you a proposal. They should send this as a written document (verbal agreements don’t count, because there’s too much money on the line).
In their proposal, prospective clients are expected to lay out what they expect from you for the completion of their services.
Based on their RFP, you can determine whether or not the terms of the job are worth negotiating.
If you’ve decided to continue with the RFP with the potential client, you can begin negotiations on your terms of service.
Once you’ve both agreed to the conditions stated in the RFP, you can request a digital signature to begin an estimate.
Fortunately, Service Autopilot offers a feature for digital signatures. You can email your RFP to your potential client as a “pre-contract” of sorts, and then Service Autopilot will save the date, timestamp, and IP address from the point of signing.
Even though this step might seem like you’re jumping the gun a bit, I assure you - you’re not. There’s no sense in continuing to waste your time (and theirs) if you can’t come to an agreement on service expectations.
Quick note: More than likely, you’ll be competing against other snow removal businesses in your area for a commercial account. Time is of the essence! Make sure you’re responding quickly and efficiently.
Things can be way less formal for residential clients, because you’re not necessarily locked into a contract. In other words, you’re not locked into a contract, so you can drop them midseason if they’re unprofitable.
Unlike your commercial clients, with residential clients you don’t need your agreement to be in writing multiple times.
Simply, get a verbal agreement from your client and add it to the agreement/contract you send them.
Alright, so you won’t have to leave your desk - BUT you will be measuring properties from a satellite that’s in space, so you’re a regular astronaut now.
In order to give an accurate snow removal estimate, you’ll need to obtain the measurements for the property.
The easiest way to do this is to look for an app that measures pavement. This will save you the time and effort of measuring it yourself. You don’t need to go out to EVERY property to measure with a wheel, if you use a digital tool.
Before giving a soundproof quote, take the time to do a paid visit where you can complete an in-depth inspection of the property. Consider this your preseason snow visit for new clients.
Be sure you check the property for hazards and existing property damage. Document them by taking pictures for documentation. (By the way you can add these pictures to a client’s account within the Service Autopilot app.)
Next, determine what type of snow plow(s) and equipment you’ll need to complete the job.
Once that’s determined, you’ll want to calculate how much de-icing material you’ll likely need to complete the job. And remember, it’s always better to overestimate a little than to underestimate. Clients will be MUCH happier to pay you less, however they might not be as inclined to pay you more. The snow business is built around setting the RIGHT expectations on both sides of the agreement.
Make an estimate of how much time you think it’ll take you to plow the property and apply proper de-icing and/or salt materials to clear walkways. As you build your own book of business, you’ll be able to compare pricing against similarly sized clients to KNOW that you’re pricing based on how long it will actually take.
If you don’t know the typical weather trends, you won’t know how much snow and ice you’ll be responsible for removing - resulting in an inaccurate snow removal estimate.
Not knowing your local historical weather data can cause you to…
Wondering whether to charge per event, per inch, or per push? Check your local historical weather data to find out the typical weather patterns for the season. This will help you determine how you’ll want to charge your client. We encourage snow business owners to diversify their portfolio of snow clients by offering a mix of options. This ensures that in light or heavy years, you remain profitable.
You can use applications, such as WeatherWorks, to check the historical weather data.
No matter what app you choose, just be sure it has the features you’re going to need…
For instance, if you’re charging per inch, an app like this will tell you how many inches it snowed in your area. Likewise, if you’re charging per push, it will tell you how long the snow storm lasted.
Once you know how to do snow removal estimates, you’re on your way to accomplishing a profitable (and less stressful!) snow season!
No matter where you’re at in the estimate process, be sure to remind yourself that it’s ok to turn down potential clients. There is such a thing as bad work - clients where you will lose money aren’t worth the investment.
Just because you complete an estimate and potential client agrees to the terms, doesn’t mean you automatically have to accept the job. It’s better to lose the client than to lose money on an unprofitable job later on in the season.
While there is a lot of risk involved in completing a snow removal estimate - if you follow these steps - you’ll be a pro at snow removal estimates in no time. It’s even easier when you’re using a software partner like Service Autopilot.
Originally published Dec 5, 2019 7:00 AM
Tags: Business Operation