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:
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.
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.
Take a look at a few of the many overhead expenses you'll encounter:
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:
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.
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:
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.
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.
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.
Much like per push, this is when you charge per inch that's cleared.
A season contract provides a total price for the season. Typically, it's paid out in monthly installments.
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.
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.
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:
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.
Did you know, the best snow removal software has the power to:
In addition, with Service Autopilot, you'll gain access to profit-generating resources, such as:
Manage your clients and employees all in one system
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!
Originally published Oct 24, 2017, updated Aug 2, 2022 10:12 AM
Tags: Business Operation