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Snow Removal Business

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[OP]
Deal Addict
Nov 13, 2012
1468 posts
68 upvotes
Edmonton

Snow Removal Business

I have some questions regarding snow removal business. I know there are tons of companies who do it everyday, everywhere. How hard is customer acquisition? Are individuals, and companies willing to and open to snow removal expenses? Do most companies charge per snow fall or monthly fee?

Is it a hard business to breakthrough in? Lots of potential?

Any help would be appreciated.
9 replies
Deal Addict
Nov 26, 2011
1081 posts
265 upvotes
ontario
it's a lot of hard work
I used to work for various landscaping companies and thought about starting my own lawn cutting business when I was just out of highschool (I think a base number I got was 40 customers : 40 people x $15/lawn = $600/week)

for winter:
customer acquisition can be easy and hard - I know people who have the same company for 10 years and people who switch companies every year
call some companies and see what they charge per driveway and what they offer in terms of customer service (ie how long will they be after a snowfall etc)

companies can charge per snowfall OR monthly fee
its a gamble for the company and the home owner
so most companies have both types of customers
for example:
next winter you have 5 customers who pay $300 for snow removal from November-april
say they pay all upfront so you have $1500 cash
but it snows a lot and you have to go to each place 25 times over the course of winter

if those 5 customers paid $15 each time you shoveled instead:
$15 x 25 = $375 per person x 5 customers = $1875 = an extra $375 for the same amount of work

but it works the other way around too - like this winter there's hardly any snow so you collected that $1500 and maybe will have to shovel 5-10 times instead

another thing you can charge for is 'premium service' ie instead of charge $15/lane say you'll be there within an hour of 2" of snowfall for $25/lane instead
and also have to decide on a route or who gets priority (like stores will want snow cleared before they open, people want snow cleared before they go to work etc)

and then theres equipment
do you want a truck with a plow? if so you'll need at least a 4x4 2500 truck and plow blades can start at $1000
do you want snow blowers? for heavy use you'll need one built to last so those can start at about $2-3k (not your average $500 blower from home depot)

and then supplies like salt/sand
and maintenance costs (oil changes, winter tires etc)
Deal Addict
Nov 26, 2011
1081 posts
265 upvotes
ontario
it's a lot of hard work
I used to work for various landscaping companies and thought about starting my own lawn cutting business

for winter:
customer acquisition can be easy and hard - I know people who have the same company for 10 years and people who switch companies every year
call some companies and see what they charge per driveway and what they offer in terms of customer service (ie how long will they be after a snowfall etc)

companies can charge per snowfall OR monthly fee
its a gamble for the company and the home owner
so most companies have both types of customers
for example:
next winter you have 5 customers who pay $300 for snow removal from November-april
say they pay all upfront so you have $1500 cash
but it snows a lot and you have to go to each place 25 times over the course of winter

if those 5 customers paid $15 each time you shoveled instead:
$15 x 25 = $375 per person x 5 customers = $1875 = an extra $375 for the same amount of work

but it works the other way around too - like this winter there's hardly any snow so you collected that $1500 and maybe will have to shovel 5-10 times instead

another thing you can charge for is 'premium service' ie instead of charge $15/lane say you'll be there within an hour of 2" of snowfall for $25/lane instead
and also have to decide on a route or who gets priority (like stores will want snow cleared before they open, people want snow cleared before they go to work etc)

and then theres equipment
do you want a truck with a plow? if so you'll need at least a 4x4 2500 truck and plow blades can start at $1000
do you want snow blowers? for heavy use you'll need one built to last so those can start at about $2-3k (not your average $500 blower from home depot)

and then supplies like salt/sand
and maintenance costs (oil changes, winter tires etc)
Deal Fanatic
User avatar
Nov 2, 2013
5610 posts
1474 upvotes
Edmonton, AB
It'd seem like a risky business as you're dependent on snowfall for income. That is if you want to go all out and get your truck to plow with, truck to transport the snow elsewhere, etc. If you just want to keep peoples' sidewalks clean for pocket change then suppose it couldn't be too bad.
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Deal Addict
Nov 21, 2004
1676 posts
121 upvotes
If you look around, you will find that there are very few, if any, companies that exist just to do snow removal. It's a business that's great for cash flow for landscapers, etc, but no one makes great money at it. It just keeps the lights on, equipment payments made, etc for companies that already own most of the needed equipment.

Residential - You don't need much for equipment, shovels, backpack blowers and maybe a snowthrower... as well as a truck to haul it around with. How much money you make depends on how tight a route you can have (ie, you're not going to work all over the city, just focus on a couple neighbourhoods) as well as how many people you can get to sign up. You can do a per time charge or a monthly fee; you probably want a blend of both so you have guaranteed income, as well as make money if it snows more often than expected. You have to deal with homeowners with unreasonable expectations.....

Commercial - You need lots of equipment (bobcats, trucks, sweepers, throwers, etc) and people. Commercial work will have varying degrees of headaches (i.e. shopping centers have to be done by 8:00 AM, no matter what). You will either have one main contract and a couple with lesser requirements, or a bunch of small contracts with lesser requirments. Can be monthly or per event, but you will be waiting 90 days or more for money.

In either case, you will need liability insurance for slip/falls as well as all the usual business insurance. You can not take any time off in the winter (i.e. no holidays) and you have to be 100% reliable.
Deal Addict
May 24, 2010
1034 posts
152 upvotes
my snow guy in winter is also my grass guy during summer. you have to do both to keep it going. i have no idea how this guy makes money because his rates seem pretty cheap. he must have like 100+ clients. and work 6 days a week. i randomly called his number from an advertisement i saw of his in a neighbors yard when i became too snobby to do my own yardwork.

the thing about winter snow removal is that unlike summer, i dont see how he could do 100+ clients. because you have to go out to each person every day there is now.
Deal Fanatic
User avatar
Nov 6, 2010
9866 posts
1813 upvotes
Montreal, QC
Are we talking peer-to-peer snow removal (like a guy with a shovel) or like industrial?

It's a thriving business where my dad lives since he's in Quebec so snowfalls are pretty much daily occurrences in the winter; there's at least 2-3 companies I see going around the neighborhood offering the service; they usually have a big tractor with a snowblower attached to the back and all they do is back up into your driveway with it during a snowfall (sometimes if you agree to it with them, you can move your car out after this and they'll do the whole driveway). If there's a heavy continuing snowfall they'll come back once or twice during the day. These guys usually charge 300-400$ for the season so I assume it's a numbers game for them (given that with the tractor it takes them literally less than 5min to "clear" your driveway).
[OP]
Deal Addict
Nov 13, 2012
1468 posts
68 upvotes
Edmonton
How much are commercial snow removal contracts worth? Is this a business that is: it's not what you know but who you know??
Deal Fanatic
User avatar
Nov 2, 2013
5610 posts
1474 upvotes
Edmonton, AB
CalgaryExotics wrote: How much are commercial snow removal contracts worth? Is this a business that is: it's not what you know but who you know??
From what I know a lot of the big construction companies got a lot of them as they got the manpower and the machines like graders and big trucks. The one I worked for this summer that's basically all they do in the winter.
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Deal Addict
Nov 21, 2004
1676 posts
121 upvotes
CalgaryExotics wrote: How much are commercial snow removal contracts worth? Is this a business that is: it's not what you know but who you know??
Depends on the customer and the conditions in the contract. You will not just start up a commercial snow business and have customers. Understand that all these businesses already have their contractors in place. Late summer/early fall companies tend to put out there contracts to bids, but even then, it will only be to a short list of contractors.

You need to understand that commercial business comes with strict conditions... WCB/COR/5 mil or more in liability insurance... you're not getting any money until 90+ days after invoicing, etc. UNLESS YOU HAVE LOTS OF MONEY BEHIND YOU, YOU WILL FAIL.

If you really want to be in the business, you need to look at buying an existing company.

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