September 2002

Spread the wealth

When the dot-com crash began in early- to mid-2000, sending countless twenty-something company presidents and weekend warrior day-traders to bankruptcy court, the rest of the country watched and wondered if and how it would be affected. But with recent jarring events and the official proclamation of a “recession,” the question is no longer if there will be an effect, it''''s now a question of how to deal with a definite slowdown.

Though no industry is completely sheltered from the bitter elements of a sputtering economy, those in the winter maintenance business may be one of the best suited to successfully weather the storm. Winter maintenance demand relies on nature''''s challenges, not on speculation and business projections. Simply stated: Snow is sure to fall and ice is bound to form, and someone needs to take care of it.

However, regardless of a seemingly unfettered industry, this is no time to rest on your laurels and await the bounty of yet another successful season. In fact, You should be considering the opposite approach. Retail establishments and office buildings will be evaluating and cutting back, looking to eliminate any unnecessary expense to avoid cutting its workforce. Additionally, many of your residential customers who provided supplemental business in the past may now be more apt to pick up a shovel and take care of the problem themselves. Thus, in order to prevent a cash-flow freeze, consider a backup plan, such as an increased focus on material spreading.

Grow your snow business

If material spreading is not a major portion or even a part of your maintenance offering, growing this side of the business is a good idea. Regardless of your company''''s size, you can quickly and easily improve profitability with a minimal investment in one or more truck-bed or tailgate spreader for the application of sand, ice melters or salt. Even if snowfall is minimal, cold winter temperatures and wind still continue to produce ample ice problems. Thus, no matter what winter may bring, offering material spreading is one way to keep your business thriving all season long.

Is there money in spreading? First of all, there is no shortage of customers who need their lots sanded, salted or deiced. So establishing such a program will keep you busy, even during a snow shortage. Also, such applications are not time intensive. A typical mid-sized lot would take at least 20 to 30 minutes to plow, whereas material spreading for that same lot would take roughly 5 minutes with a truck-mounted spreader. Additionally, most lots require several applications of ice-melting materials. During an average winter, lots that would typically require five to 10 plowings would require anywhere from 20 to 50 applications of salt or deicing materials, so you have an opportunity for increased profit margins.

Are some companies too small to get into spreading? Unfortunately, many fledgling contractors come to this false conclusion. Simply consider the economics of a spreading operation. For example, take a small, two-truck operation serving 25 to 30 small- to medium-sized accounts. They would need at least one truck-mounted spreader, with an initial cost of approximately $1,000 to $2,500. As far as materials are concerned, most mid-sized lots would require an average of three bags of salt or deicing material per application. Each bag usually costs $3 or more (depending on materials), and this cost is typically passed on to the client. At the very least, a contractor could earn between $50 and $60 per application. Multiply this by the 25 to 30 accounts and the possibility for 20 to 50 applications per account in a given season, and that same small contractor could net between $25,000 and $90,000 just for the spreading side of his or her operation. If you already make a profit from plowing, it is not unusual that you could realize a 100- to 200-percent profit increase simply by incorporating and promoting a spreading program.

Demand is growing

There is no shortage of demand for winter maintenance. Snow removal to gain and maintain access to thoroughfares and structures will always be necessary, but those who are in the business continue to see a rise in the demand for sanding and salting. Why are clients showing an increasing interest in ice maintenance?

Well, in many ways, they don''''t have a choice. Each year, more than one million Americans seek emergency room treatment for accidental falls. Of these million people, 300,000 suffer disabling injuries from their falls and 12,000 die as a result of them. In fact, slip-and-fall deaths rank second only to automobile accidents. Given the more than 650,000 attorneys in the United States and today''''s increasingly litigious society, these statistics don''''t bode well for the property owner, commercial or otherwise.

Thus, many property owners are forced to keep their parking lots and sidewalks maintained. Even if this practice doesn''''t eliminate the problem, these continued efforts help to lower the amount of accidents and also provide protection from lawsuits. Although property owners are expected to do what''''s necessary to maintain a safe environment, in no way are they reasonably expected to eliminate the hazardous properties of ice. By subscribing to a snow-removal program, the owner is provided with documentation of ice-control efforts, which in turn helps to minimize liability concerns. Though businesses are looking to cut expenses during these tight times, the last thing they need or want is a lawsuit. This provides a continued strong opportunity for you.

Additionally, technological developments have further spurred interest in material spreading. Deicing is no longer the only option for a winter maintenance program. Anti-icing, a relatively new concept, has been gaining popularity. Anti-icing involves the application of a chemical freezing-point depressant onto the pavement before the onset of precipitation, which inhibits the development of a bond between snow and ice to the surface. Before the snow has even begun to fall, an ambitious contractor could perform winter maintenance work. Obviously, your benefit for promoting such a service is one of added profits, but the customer is given yet another tool to minimize problems and liability. To clarify, anti-icing does not replace the need for deicing practices, but it does reduce the amount of material and effort needed to address problem areas following snow and ice accumulation.

Spread the word

Arguably, the most important tool every winter maintenance contractor has and must use to achieve success is communication. Regardless of the technological advances made with equipment or techniques for combating snow and ice concerns, you must actively communicate these developments to your clients in order for them to make a difference. And given the current economic situation, communication is even more crucial.

Sufficient communication with customers is much more than just asking which areas need to be maintained and how much snowfall is necessary for a visit. Part of your job is to help educate your customers by describing different options. In fact, the most successful people in the business have realized that they must have a careful balance of multiple services, the right equipment and salesmanship.

Many contractors have made a practice of setting up strategy sessions with their customers before the maintenance season begins. This does not mean that you should merely provide a client with a list of services and prices from which to choose. During this session, you should tour the property and take the general nature of the business in mind before suggesting a maintenance plan catered to the individual client. Such a tailored approach makes the client much more comfortable with the relationship and more apt to choose additional services.

Also, remember that the easiest customers to get are ones for which services are already provided. Since most winter maintenance contractors offer landscaping services during warmer months, the opportunities to cross-sell services to establish a year-round maintenance client should not be overlooked. Again, communication is key. Many times it just takes the effort to indicate to a current customer that these services are available.

Icing on the cake

Though the addition or further emphasis of spreading services may help buoy your business during an uncertain business climate, there are some other modifications that can be made to ensure that your business does not falter.

One idea is to offer a contract rebate. Though on the surface, it may not seem logical to cut prices when trying to maintain profits, the reasoning is quite sound. Given the economic situation, many commercial and residential clients may be less interested in signing winter maintenance contracts. Perhaps they''''ve decided to take a per diem approach, only commissioning service when absolutely necessary in an attempt to save money. Whatever their reason, a successful winter maintenance service relies on contract business to maintain a steady flow of income. Offering contract rebates is a way to not only help maintain a current customer base, but to also increase it.

Another method of increasing business is to take a value-added approach, going above and beyond the customer''''s expectations. This may seem like an obvious piece of advice for any service-oriented business, but the benefits of such an approach are hard to dispute. Let''''s face it, there are countless snow-removal operations from which to choose — all basically offering the same services and comparable rates. In order to help solidify and expand your current business, you have to position yourself as different from the competition. Simply put: Do more than what is expected. This goes back to offering a complete winter-maintenance package with spreading and improving communication with the clients, but there is much more you can do to differentiate yourself. For instance, though every snow-removal service will plow driveways and parking lots, not all would go the extra mile of shoveling areas where the plow can''''t reach. This may take more time, but it again helps to build a better relationship with the customer. When a customer begins to expect different areas to be maintained that most contractors won''''t touch, it creates a dependence on a particular contractor. In time, not only will these value-added practices grow the client base, but customers also will be inclined to pay a little more for the service.

A profitable forecast

Even if you implemented only one of these suggestions it would help boost your snow-removal business; however, for the enterprising snow-maintenance contractor who is facing an uncertain season, perhaps the best route is to incorporate all of these tactics into your repertoire. By adding or emphasizing spreading services, improving communications and tweaking policies to accommodate this down period, you could find yourself much more profitable in winters to come.

Jay Truan is general manager of sales and marketing for TrynEx International (Warren, Mich.).

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