One area often overlooked by contractors where there’s great potential to capitalize on snow removal profits is effectively routing crews before, during and after they’ve serviced a property.
Generally speaking, our industry takes for granted the money, resources and time involved in delivering our services. Driving to a job is a huge indirect expense that contractors incur; however, they really don’t think about the costs involved because it’s routine and must be done.
What’s overlooked is that every time you deploy your fleet to service your book of business, the two biggest items on your P&L statement - your people and your equipment - are leaving the shop. To say it’s in your best interest to plan what’s going to happen when your crews deploy is an understatement. It’s absolutely imperative.
If you aren’t routing your crews with profit in mind, you’re leaving a lot of money on the table. And this doesn’t just apply to driving your routes. Sales and operations have a huge hand in routing a job so that it’s completed in the most efficient manner every time for the largest return on investment.
So how can you plan to effectively route your crews? Consider the following:
1. How many times do you travel to a site per year?
This is particularly important to understand if you are a full-service contractor offering maintenance services in addition to snow removal. For example, a typical maintenance job in the Midwest that includes mowing, pruning, floral install, leaf removal, snow removal and irrigation (not to mention the other work orders for which you’ll visit the property along the way), requires about 90-100 visits per year to deliver services.
Let’s say you’re operating with a three-man crew and each person makes $12.50/hour. At 2,000 man-hours per year, that costs your company $75,000 in payroll alone. Wouldn’t you want that $75,000 to be well spent?
If we’re just looking at the snow removal aspect of servicing a property, take an average of the past three years of weather events to determine how many times you can expect to service your properties throughout the season. This can give you a good baseline for the number of trips your crews will make.
2. What costs are involved in traveling to the sites?
We have to take into account labor, fuel, wear and tear on vehicles and depreciation. Capital goods are always going up. Trucks get more expensive and depreciation is always working against you. And from our previous question we know a three-man crew costs the company about $75,000 per year.
Throw a supervisor in at $25/hour and that’s another $50,000/year.
Sit down and run your numbers on what it costs to send your crews out in labor and you’ll be very motivated to pay attention to how efficiently everyone is from the time they show up for the day until the time they leave.
3. How far is your average job from the shop?
Do you know how many miles your jobsites are from the shop? You can use many free and paid tools and services to collect mileage information and to help you most efficiently map out your routes. Or go about it the old-fashioned way: Drive all of your routes and verify the mileage it takes to get from one site to another.
It’s worth the time and capital investment to figure out how much you’re spending on labor and fuel in a typical day. Every time you send someone out in the truck, you want that trip to be worth it, which brings us to the next question.
4. Who determines where we will go for work?
What is your sales strategy? Do your salespeople have the shop’s location in mind when they’re prospecting? Are they thinking about the expense of sending a crew to a property before they target the customer?
Win new work around your existing work and you have the best of everything when it comes to routing your crews for profit. By servicing properties around existing properties, you not only reduce wasted time behind the windshield, but you also significantly decrease the number of wasted trips back to the shop.
It’s a time-tested, effective strategy when you look at maximizing your earning potential and controlling your costs.
But don’t take just any job that you drive by on the way to your existing work. Be selective and make sure it fits into your book of business. The contract should provide good additional income. If it doesn’t, don’t agree to the work.
Processes can save money
Answering the questions will give you a great foundation for organizing your fleet for the upcoming season, but there’s more to routing your crews for profit than planning your time on the road. Management and operations on the jobsite also have a huge hand in routing your crews efficiently.
There is a lot of waste surrounding the most redundant but required tasks. You want routines like beginning-of-day processes to be just that: routine. You don’t want your people to scramble and operate in dysfunction and chaos just to get out the door. There’s enough of that to handle in the snow business without the added burden of disorganization.
So get your most routine tasks down into processes and prioritized checklists. Then nothing is left to question. Your crews know what to do and what is expected of them; and if they forget, they can refer to the checklist.
And that goes for the jobsite, too. Do your people know their responsibilities at every site? Or are you sending them out and hoping they know how to be efficient while effectively servicing the property?
Visual site maps can help ensure your crews know exactly what is required every time they make a trip to a property. This is especially important for snow services since it isn’t as “one size fits all” as other maintenance services.
You also need a great leader in the field who helps orchestrate everyone’s moves so not a moment on the property is wasted.
Routing your crews during sales, management and operations is time-consuming and takes a lot of preparation and ongoing effort, but it’s worth it.
If you take a good look at the money and resources involved in making trips to and from a property to sell, deliver and manage your services, I’m confident you will find a big opportunity to eliminate waste and increase your company’s bottom line on every job sold.
Mike Rorie has been a participant in the snow and ice industry for over three decades. He is now CEO of GIS Dynamics, parent company to Go iLawn and Go iPave. Contact him at firstname.lastname@example.org.