If you’re in a snow market, you have three or four months of opportunity to add to your bottom line by offering snow and ice management services. And it’s very easy to calculate to determine what an average winter income should produce for your enterprise.
It takes planning in order to get a return on your time and equipment, but the snow segment of your business should be able to provide some significant income opportunity for your company.
So how do you make winter services worth your while?
Collect weather data
Start by understanding the number of weather events in your market for a season. Confirm the number of times you would service your sites then budget for what you can expect for an average winter.
Run the numbers on what you can generate during an event, then plug in the average events you believe is obtainable in a season and see what this does to your revenue for a year. My guess is you will add quite a bit to your bottom line.
Look at your numbers
Once you collect the weather data, take a look at your revenue and gross margin contributions, as well as your overhead by quarter. If you want to be in the snow business, and you want to make it worth your while, you must be able to cover three months of overhead at a minimum. This is a good goal to aim for and is very achievable. If you confirm that you can cover your overhead, the next area you need to look at is your workforce.
People and machines
Do you have a workforce to keep busy from Thanksgiving to St. Patrick’s Day? And if you have the labor, do you have the equipment to make it happen?
Remember, you are offering snow and ice management services to make money, not to add to your overhead. Labor and equipment are fundamental items you must have ready and accessible. If you don’t, then you must factor the costs into acquiring a workforce and equipment into your overhead projections.
The next thing you need to tackle is sales. Do you already have an existing customer base that is purchasing snow services from another provider? If so, that is one more piece of the puzzle you have in place for a lucrative winter.
If not, you have two choices. You can confirm a marketplace of buyers, businesses and communities that can help you (at a minimum) cover your overhead for three months if you were to service their properties.
Or, you can become a subcontractor for a large provider in your area. Subcontracting for a reputable snow provider will immediately put your workforce and equipment to work, taking some of the risk out of entering the snow business.
Plus, working as a subcontractor eliminates the sales process and the customer component of snow services. This means you won’t have to make the sales to cover your overhead, and you won’t have the administrative burden that comes with servicing customers directly.
Each model has pros and cons, but if your customer base already purchases snow, then I would begin offering the service directly to them. If you have to build a customer base and compete for the work, then becoming a subcontractor for a reputable snow provider could be a great solution.
Leveraging your business with an effective snow operation should be a very worthwhile move if done right. Thinking you can only make money six to eight months out of the year is a faulty concept. There’s a huge opportunity to make money 10, 11, even 12 months out of the year; and if you have the desire to participate in the snow and ice management industry, I would encourage you to get out there and attempt to make the winter profitable.
Mike Rorie has been a participant in the snow and ice industry for over three decades. He is now a supplier to the industry as CEO of GIS Dynamics, parent company to Go iLawn and Go iPave. Contact him at firstname.lastname@example.org.