Smart snow equipment investment can be the difference between this snow season being profitable or a drain on your finances. This applies whether you wish to rent, buy, or lease your equipment going into the winter. Carefully allotting your resources to get not just the most equipment, but the most profitable equipment will help you take on the maximum amount of jobs over the season. With this said, how do you figure out the best way to go about doing snow equipment investment? As a part of SIMA’s Summer Pop-Up Webinar series, LMN CEO, Mark Bradley provided some essential insight on just that topic.
1. Create An Equipment Budget
Solving the rent-buy-lease question when it comes to snow equipment investment isn’t going to be a simple process. One of the ideal methods to tackle the issues is focusing your budget to encompass all equipment expenses. For leasing, this would include leasing payments on top of what you are paying outright. Even if you fully own equipment, make sure you cover annual costs like upkeep and depreciation, even if you don’t have to make any payments. The budget is essential to show the actual cost of equipment and guide your decision making. You need tech here in order to properly organize and gather all that information.
2. Change Your Profit Mentality
Every business owner wants to be profitable, but when it comes to snow equipment investment, Bradley recommends that you focus on true profit versus top-line revenue. Technology is essential here because, in order to find out what is truly profitable, you need:
- A historical record of all the costs associated with your equipment and specific jobs.
- The ability to quickly A/B test different ideas to see if they are profitable or not.
Doing this by pen and paper, or even with legacy software, is both inaccurate and extremely time-consuming. Modern software makes it far more efficient for you to price out different contracts, including the equipment needs.
3. Looking At Operations Before Scaling
Bradley notes that in his history of running snow businesses, one of the major mistakes he made was constantly scaling up in terms of buying new snow trucks and other seasonal equipment as his business grew. On paper, this seems like an obvious course of action. However, as Bradley points out, no matter how many trucks you add on, you’re not going to be able to use them in the summer months. As a result, a truck fleet that is too large could be a financial albatross before a financial boon. Only advanced project management software allows you to run the calculations to determine where that sweet spot is based on the amount of work available in your area.
4. Checking After The Fact
Determining whether or not certain snow equipment investment is the right choice doesn’t end when you make your purchase. For example, you can use snow contractor software to determine the location and usage rates of a given piece of equipment. If you find that you’re not using it as much as you originally planned, you may need to switch gears before buying more of that same type of equipment.
Getting the most ROI from equipment is one of the most essential contributors to overall success this snow season. However, the best way to reach this point is by having all the tools necessary to figure out the financial side of snow equipment investment. This means making use of the top snow removal contractor software available. The best-in-class option here is LMN, the #1 business management software for snow contracting professionals.
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