Sidewalk work is an important part of any snow program. Professional snow programs don’t end at the parking lot - they include servicing the full width of sidewalk, curb lines and other walking areas that pedestrians will encounter when they leave their vehicles. Maintaining sidewalks can be challenging work, particularly if you have not priced the job properly to ensure you have the resources to effectively manage the program. Before you can accurately calculate pricing, consider several factors. Risk factor
The snow business is very risky. At the beginning of the season you do not know how much it’s going to snow or how many hours your crews will work; therefore, you do not know how much overhead will be required or how much profit will be generated. Hypothetically, if all of your work was fixed-cost pricing, each time you provide service, your margins drop. Alternatively, if you were all per-occurrence, you wouldn’t be sure if you would cover all of your overhead or profit, particularly on a low-snowfall season. Depending on your pricing and contract mix, the amount of snowfall and costs to service may or may not cover your fixed overhead or meet profit expectations.
Despite the uncertainty, you still need to make these calculations. So you’ll have to base them on estimates. You can try to be surgical and calculate to the penny; however, it may be wise to include a fudge factor and round up and/or specifically add a line item for “risk” to your pricing equation. How much you choose to add is a personal choice and may be influenced by market rates and how competitive you believe your numbers need to be based on your clientele, and how you market your company. This additional risk factor is a soft number, which may occasionally change, based on what feels right for your business.
If you have not studied your labor or production rates, review your records or begin studying production this season. How long does it take your crew to hand-shovel 1,000 square feet of walk? How long does it take to snow-blow 5,000 square feet? What happens with a 1-inch storm versus a 2-, 4- or 6-inch event? Measure your crew’s production over known areas and account for the amount of snow and the level of difficulty or detail required to determine your production rates.
The production rate for dedicated crews is different from routed crews. Dedicated crews must monitor the site and/or provide continuous service even during lulls in the storm. The actual hours on site may be different throughout the season depending on the scope of work and how you service the property. If your dedicated sidewalk crew was sold as an increased level of service and a means to become more proactive, you need to account for this in your labor estimate. Site engineering factors
The site’s size, complexity and location will influence how you service the site relative to the equipment you have available. The total time required for service is based on how you engineer the site. A more precise estimate will break out service areas by type of clearing method. Determine areas to be serviced with the most efficient equipment available. Add the time required for each area to be serviced, considering the workflow and how the crew operates, to determine total time on-site.
Once you’ve considered all the factors, you can better calculate a total cost for servicing your sites, including pricing for crews and equipment. Crew pricing
Different cost calculations are necessary for routed versus dedicated sidewalk crews. The process to arrive at their costs is similar, but the inputs are slightly different. A routed sidewalk crew has a truck that likely is not a factor for a dedicated crew, while a dedicated crew may have on-site ice control product storage, shovels and dedicated equipment for the site or area being serviced. Even if your storage is an enclosed trailer that you own, the true cost should still be included in the seasonal rate. Regardless of your crew type, sidewalk pricing should follow a consistent formula. Equipment pricing
How will your crew get to the job site? If a dedicated crew reports directly to the job site, transportation may not be an issue. Otherwise, you may need to factor in vehicle costs (assuming you don’t recover the cost through overhead). If the crew is equipped with a tractor, ATV, snow blower or other sidewalk equipment, a factor needs to be added to the crew rate to account for this equipment.
Snow-specific equipment (e.g., snow blowers) should be priced based on expected use for the winter, while equipment that is used in multiple seasons for different lines of work (e.g., trucks or skid steers) should take into account the shared burden. Site pricing
Pricing can be presented in any number of ways, and you can create variations that reflect your marketplace and client preferences. Two general pricing methods are per-occurrence and fixed seasonal rates. As an example, your per-occurrence price will be based on the time it requires your crew to service the site with allocated equipment. Assume you have a site that takes a three-man crew an average of 30 minutes to service including the use of a snow blower:
Crew rate (labor x $45/hour): $67.50
+ Vehicle ($21/hour): $10.50 + Snow blower ($8/hour): $4.00
To factor a seasonal fixed rate, you need to determine the expected frequency of service for the season. A good place to begin is to divide your total average seasonal snowfall by the trigger depth for the site. For example, Cleveland receives 68 inches of snow on average, and a 2-inch trigger will result in approximately 34 service visits, assuming you must service every 2 inches at a 24-hour location. Based on this approximation, you’ll adjust up or down based on additional considerations.
For example, you may service less frequently if your trigger depth is more of a guideline rather than an absolute; if you must service every time the trigger depth is reached, clearing will occur more frequently than if you simply use the trigger as a guideline as to when to begin plowing. If you’re proactive in servicing your clients ahead of the trigger depth, particularly before morning opening, you may service more than 34 times. Additional factors may include hours of operation, if in-house staff provides some aspect of service, and overall tolerance for accumulated snow, which is based on your scope of work and trigger depth.
Two methods can be used to calculate a seasonal price based on the same scenario in the per-occurrence example. The first is a quick and simple method that is generally better for smaller, less-involved sites.
For larger or more complex sites, the second method allows you to tweak the variables and more easily make adjustments for the site’s circumstances. For example, labor hours may include site monitoring, ice patrol, ice melt product, dedicated site equipment, fuel, etc. While the second method adds more steps, it is more flexible when adjustments need to be made.