Digging Out Profits in Residential Snow-Plowing
To be successful in plowing residential sites doesn’t mean you have to lower your prices or your level of service. It’s a balance of both that makes this market segment profitable.
Many contractors are under the false impression that you cannot make money in residential snow-plowing. This is simply not true. Done properly, residential snow-plowing can be more profitable than some commercial work.
Before you decide to jump into this segment of the market, however, you first must define which aspect you intend to pursue. Do you want to offer the cheapest plowing service in town and carry a high number of jobs with low profit per job? Or would you prefer to charge the highest prices in town, risk having fewer jobs and make more money on each job?
Our firm charges the highest prices in town for plowing residential sites. Yet, our snow-plow routes have been completely sold out for the past 15 years. How have we been able to accomplish this? Primarily, we don’t compete based on price; we compete based on quality. Basically, we’ve been able to prove to our customers that we offer such a high-quality, dependable snow-plowing service that they are willing to pay us more than they would to our competitors. Of course, this does not mean we get every job on which we give an estimate. Some people are always going to purchase service based on who offers the lowest price.
How to set your company apart
What differences will set you apart from your competitors? First, when someone calls for an estimate, price the job immediately and call him or her back with a quotation within 2 days. Next, explain exactly what service is available and clarify the details in a written contract before beginning any work. One of the most important things you can do—both verbally and in the written contract—is to properly set the customers’ expectations. For example, explain the snow-depth level and ice conditions at which the customer can expect plowing and the time factors involved.
Another way to help ensure profitability is to offer various service options. For example, you could offer two different levels of service. Under the “primary” level, you promise to plow each customer’s driveway before 7 a.m. to allow on-time access out of the driveway for the customer’s morning commute to work. This level of service also could include plowing any daytime snowfalls before 5:30 p.m. to ensure customers’ driveways are cleared upon their return home from work.
A “secondary” level of service could focus on retirees and other customers who do not need driveway access early in the day. Under this program, you can charge less and schedule these jobs for later in the day—after you have completed your “primary-level” customers’ jobs. For “secondary-level” customers, you need not give a guaranteed time of completion.
When offering a contract, no matter what type it is, you must ensure that customers understand what it includes. For example, make sure that customers with “primary-level” service clearly understand that when snow fall commences a short time before an originally scheduled completion deadline that you will not be able to fulfill the contract within the original parameters. Explain that, under those circumstances, you do not have sufficient time to plow all routes and meet the original deadlines.
Another way in which you can get an extra edge over your competitors is by offering payment options. One option is to bill customers at the end of each month for each plowing you perform. A second option is to charge by the season based on a certain number of estimated snowfalls. The latter choice can work to either the customer’s advantage (during a severe winter) or your advantage (during a mild winter season).
Take advantage of the time before the snowy season begins by preparing for each plow. During fall months, direct your route drivers to place marker stakes on the sides of customers’ driveways. Doing so will help your drivers avoid damaging customers’ lawns when plowing. This practice also gives your drivers a chance to “walk-through” areas they will be plowing so they remember the terrain later when it is covered with snow. Have your drivers practice their routes several times before winter sets in so they can easily find their jobs on dark, snowy mornings.
Another important advantage to ensuring residential plowing is profitable is to make sure you have high-quality, well-maintained equipment. Make sure your employees thoroughly prep and check each machine and truck, as well as their components and attachments, before the date of the first possible snowfall. (Here in Syracuse, Oct. 31 is our deadline for having everything ready to go.)
Another important aspect of offering dependable service is to have a good system for monitoring the weather. Don’t just rely on the 6 o’clock news to advise you of possible snowfall. You must check the weather every night when it could possibly snow. I personally get up and look outside at 2 a.m. and 4 a.m. every morning from Nov. 1 until April 15. In neighboring communities, we hire individuals to provide additional weather-checking for us.
A communications system with your drivers is important to make sure they arrive for jobs when you need them. Setting up a system with your drivers may involve giving them pagers or cellular phones to make sure you can quickly notify them when you need them. It’s also a good idea, if possible, to hire drivers who live close to where you store your equipment. That way, it won’t take an employee 2 hours to get to work in a snowstorm. Having spare drivers on call and spare snow-plow trucks also can make the difference in getting the job done on time.
Pay attention to the "little things"
What else constitutes a quality snow-plow service for which customers are willing to pay? Doing a “good job” of plowing means covering all the bases:
- Teach drivers to care about quality
- Pay attention to the customer’s specific requests
- Don’t bury mailboxes, fire hydrants or parked cars
- Be considerate to the general public by not leaving snow piled in the road or stopping traffic to back out of a driveway.
You also can offer the little “extras” that help make winter life more bearable. For example, for an additional fee, offer to snow-shovel your customers’ walkways.
In addition, make sure someone answers the phones during regular office hours to give personal attention to your customers and to enable you to quickly respond to requests and complaints. Communication with the customer—and taking care of problems to the customer’s satisfaction—is of major importance.
We have been able to expand our residential business—and our profits—by reinvesting in new trucks and equipment to cover additional customers and routes. You must base your profit on your ability to meet or exceed your customers’ expectations to the point that they are willing to pay for your services. The customer base that is loyal and appreciates quality is what enables a high-quality snow-plow-contract business to become truly profitable in an industry filled with immense competition.
Rick Kier owns Pro Scapes Inc. (Syracuse, N.Y.) and is treasurer of the Snow & Ice Management Association (SIMA).
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