If you’re waiting for ‘light jacket’ weather to arrive before setting up your snow operations, you’ll be too late. Top snow contractors are ready for the first snowflake long before the first frost. In this three-part series, we’re breaking down how the ‘snow pros’ set themselves up for success, regardless of what Old Man Winter throws their way. In Part 1, we’re focused on Budgeting.
According to a recent survey, a whopping 61 percent of small businesses didn’t create a budget in 2018. Simply put, if you don’t have a budget, your business will likely end up as one of the 50 percent that fail during the first five years.
Smart business owners understand they need a budget to survive and thrive. Snow Pros understand how to work their budgets for maximum profit and they use budgeting software that’s industry-specific—making the process that much easier.
#1: Create a separate snow & ice budget. Unless your budgeting software accounts for differences between your green and snow divisions (like how jobs are priced or how overhead is calculated), it’s important to separate your summer and winter operations. This way, you’ll arrive at accurate numbers and plan for seasonal success.
#2: Consider overhead to define sales goals. The way you account for overhead (wages, drive time, fuel, insurance, etc.) differs between green and snow work. For example, insurance costs alone for your snow business can eat up your profits if you’re not careful to account for them. Bottom line: You’ll need to plan how much overhead your snow division needs to recover in order to (at least!) keep the lights on all year.
It’s best to assign a fair portion of overhead to each division. For example, if your Landscape Designer doesn’t work in the winter, your snow customers shouldn’t pay for any of that salary. Learn how to calculate overhead for your snow division. Download the Snow Overhead Calculator.
Once you have an overhead recovery plan in place, you’ll be able to define your sales goals and the ideal mix of snow contract types that can help you achieve them. We’ll talk more about snow contract types in Part 2. For a record-breaking snow season, watch the webinar “Creating a Sales Process that Actually Sells“.
#3: Charge for your equipment. Inexperienced contractors will stop factoring the use of plows, salters and other equipment into their estimates as soon as they’re paid off. Be sure to include equipment recovery costs in your budget so customers are paying for the wear and tear. This way, when it’s time to buy new, you’ll have the cash to equip your crews with the most efficient vehicles and equipment for the job.
Stay tuned for Part 2 of 3 in How to Set Up Your Snow Operations for Success this Season!
Register for the LMN Academy Snow Day in Toronto on October 30, 2019. But Hurry! Our first two snow days are SOLD OUT.