How to run a Snowplow Business: Red flags, pricing systems and what not to do...

[Music] Sometimes it's the little things that drive me nuts. [Music] Safety first, sir. Let's see what we got in the boxes. Look at all these boxes for one snowball. [Music] These are insane how heavy duty these snowplow this snowplow system is. There you go. Rain day. No way. How about a busy day? Poured last night and my crews can't work. And so I've been literally waiting for an opportunity like this to start prepping for the next season coming up. And that's snow plowing and snow removal. So today we're going to be talking about how to bid snow plowing and removal while we actually show you some of the equipment that we use and some tips and tricks to help you guys get ready for the upcoming snow season. So I don't know when you're watching this video, but it's September right now and I'm actually kind of behind because I should have had a lot of this stuff done in August, especially the bidding and estimating. So hopefully you guys aren't playing too much of catch-up, but what are we waiting for? Let's go put some snow plows on and get some stuff done today. There's three basic ways to price out snow removal and ice control. And we're going to be talking about all three of those today. But if you don't get enough information because maybe you're thinking about starting your own snow removal business, don't worry. Just go over to Dirt Monkey University because we've put together a program just for you guys where we really dive deep. We actually take the formulas that the big commercial properties are using when they go out and bid thousands of acres of jobs and give them to the average everyday guy so he can be on the same playing field as them. So, let's talk about the three basic pricing structures that you guys are going to be using when you're first going out to start your snow removal business. The first one is hourly. The second one is on a per snow event. And there's one big red flag that I want to talk about, and we'll get into that later in this video. There's a very specific way to price out on a per event. Make sure that you're protected. And the third way is monthly or yearly. And those are basically the same thing. And I know those don't sound the same thing, but how you actually calculate the formula is the same. And then you just allocate for different times of the season. It sounds really complicated right now, but over the course of this video, we're going to break it all down for you. And hopefully by the time you're done, you'll feel a little bit more comfortable with the bidding and estimating process. But first, we got to get my wife to move her car. Okay, on second thought, we actually are waiting for my wife to move her car so I can leave. Take the other car, but the yard is muddy, so I might as well take the Franken Jeep. I think she's coming. Let's see. Where are you going? Been cold in this stuff. You forgot. Then where? Huh? Oh, I thought you're going to workout class. I have to change. Oh, are you going to workout class? Yeah, I'm going to go to workout class. All right. See, I know some things she do do. What are you doing? Where are you going? I'm going to go down to the yard. put the front plow on, the back plow on, fix the back snow plow, and then I'm going to put a new cutting edge on the western and test that against the brand new cutting edge that's on the other Western. So, we got one from a different company, and we're going to put that on and see how that holds up compared to the one that Western supplies to everybody that buys a brand new Western snowplow. Is that clear? I I don't think she I think she's lying to me. Hey, I'll talk to you later. Have fun. That's the look she gives me when she's like, "Just nod and say yes and he'll go away." You couldn't see it, but she said yes. All right, let's go down to the boneyard. All right, before we hit the boneyard, guys, let's talk about hourly and some of the dangers and benefits of of bidding and estimating with this system. Now, hourly for you guys is great when you have a great year, but if you don't get any snow, you could be looking at having some real difficult times paying your bills. So, hourly leaves the contractor in a very insecure place. And if you think that's just on you, you're actually wrong. Because from a customer's perspective, hiring a contractor on an hourly basis doesn't really give them a whole lot to go off from so that they can budget and set aside enough money and funds to pay you. So, a lot of customers may you may get a little bit of push back one way or another by going with an hourly basis. Also, beware of collecting. Let's say you have a phenomenal year and you do a ton of snow plowing. A big red flag is make sure you invoice and expect to be paid immediately upon completion. And I say immediately, you can give them two weeks, maybe a month, but never extend credit further than that. Because from experience, if you extend that credit out and they get a big bill and then all of the snow melts, there's a lot less incentive for the customer to pay you. And I'm actually referring to actual commercial sites where I've worked on where I've had a 10 $12,000 bill at the end of the season. The snow melted and then the association dispersed. They sold the entire complex and Mr. Snowplower was left with no money in his pocket. So be careful of that scenario. Make sure you invoice immediately and expect to collect immediately and set that expectation up from your customer. Welcome to the boneyard. A lot of you guys go, "Hey, I want to see your yard." Which I never understand because we don't keep a whole lot of crap down here. TLB, dump truck, trailer, another TLB, excavator, another dump truck, packer, pickup truck behind me, another packer, another trailer. Exciting. Another skid loader. What do we got going on, boys? Can't get at it. So, uh, can you put the flip the cab down? No. And, uh, start it up. She'll run. She just can't lift the arms up. There you go. She'll fire. She'll roll. You just can't, uh, you can't raise the arms on it. This is the boneyard. Hey, Blaine, how much equipment do we keep down here? Know all the stuff that we use on a regular basis? Not a I'm going to say most of our stuff is out on job sites. I mean, realistically, we You've got He's got an excavator. More pieces out here. He's got an excavator or two. He's got two excavators. One skid motor. Um Tim's got another excavator, another skid loader. It's always out on jobs. We got a plow to hook up. Two of them. All right, before we hook up that plow, this seems like a great opportunity to talk about snow plowing on a pervent basis. And what I mean is if it snows, you go out and plow and you get paid a lump sum for that one individual event. Now, there's a certain way to price that service out that will protect you, the customer, and also make it easy for the customer, you the contractor, and also make it easy for you, for your customer, to actually follow along and have a better idea of what their budget can be set for. All right, I'll get it right eventually, you guys. So, here's how you do it. Let's say that you're snowplowing a gas station. You go out there and you calculate approximately how long it's going to take you to snowplow that one gas station on a 2 to 3 in event and you price that out on a 2 to 3 in event. Then you can add 10 15 maybe 20% when you have a 3 to 6 in event. So you raise your price the more snow you have. You don't give them one lump sum and say, "Hey, I'll plow your service station every single time it snows, even if it's up to two feet, because it's going to take you three times longer to plow a monster snowfall as it is a minor snowfall." And I want to make sure that you guys are protected. So, the way I actually do it, I do it on I give them a price for a 2 to 3 in event. I give them a bigger price for 3 to 6 in, and then I break it down from 6 to 9 in. I raise that price up. And then when I have 9 to 12 inch events, I raise the price more. And any event over 12 in then goes into a time and material scenario. Meaning that I'm completely covered under any and all circumstances. And then I can actually follow along and when I invoice them, I can actually give them the weather report for the day that I snowplowed. And that weather report will show them exactly how many inches of snow fell when I plowed. That way there's no questions asked about what happens and if I'm I'm in the right pricing structure. It's very clear customers seem to like that. But again, this system does not protect you, the contractor, because if it doesn't snow all season, you're still hungry. So, let's talk about the next pricing structure, which keeps you fat and healthy all year long. But first, let's go hook up a snow. Sometimes it's the little things that drive me nuts. Like somebody that puts away the snow plows the wrong way. Check this out. Why would they do this? They bet. They pick them up, pull pull them in like this. So now there's no way to just hook up to this ball without having a skid loader to spin it around. If it was put away the right way, we can just drive in, hook up, be down the road. All right. All right, let's test it through. Now, this thing hasn't been ran. I'll tell you straight up, the Westerns are actually really good plows, except for the cutting edge. In the next video in this series, we solve the problem that I've had for the last four years with the Western cutting edge. Way more important than that, we talk about how to set up your company to have equipment that's universal, meaning that you can use it in the summertime, but by making small minor tweaks, you can have hyper efficient, productive equipment in the wintertime. In fact, when I go to purchase my equipment, I purchase it with the winter in mind and then peel everything off to use it in the summer. It's that important to get your equipment set up right for winter work because there's a lot more that goes into running it in the winter than it does in the summer. When it's 15 below and the wind's blowing at 40 m an hour, you need that piece of equipment to operate. And you need your operator inside of it to be comfortable. And we're going to be talking about all of these little things in the next video in this series. But we're going to wrap this one up. And we're not done wrapping this one up. We got more to go. What am I saying? Let's get back into this thing. All right. How's the oil? Were you guys able to check that? Yeah. Okay. So, what we'll do is we'll back it up. We'll we'll flip it around and we'll hook up the pull plow. Then we got to check oil on both of them and we'll bring it up to the house. Okay. So, this has its own battery. You can literally raise and lower it without the battery. But now with the with it plugged in, it'll battery tender it. And now I got to come back just a titch. Right. Yeah. We can slide this up a little bit. Is that as high as it'll go? I think so. Now we can we can get it exactly right. So, all right. Now back in. Todd, you want to hold this camera so we can get This is a critical shot. [Music] These people really want to see me back into this pile on the first time with no editing. I couldn't do it. I couldn't leave it unedited. It drove me nuts. I handed Todd the camera and instead of him keeping it on the plow, he actually kind of flipped it backwards and held it up to his chest. So, we got to look at his for like 30 seconds and stuff like that drives me nuts. So, couldn't do it. Sorry, guys. I couldn't make you look at Todd's for 30 seconds. Just a little bit. But you you lined it up lined up perfect. But we got to take the fence out. That helps, doesn't it? Okay, I got my side out. So, let me show them. We got the pins where right there. these are actually probably the easiest snow plows to put on. your experience. What do you think, Lane? I think so. Yeah, I'd say so. You want to lower it just a hair? This one's helpful. Is that Is your side up too high? Oh, yeah. Okay. There we go. Okay. Now, we'll get her up just a titch and we'll see if she'll slide in. Ready? Go. Good. Got it. And you didn't have to look at Todd's. All right. I'm I'm going to guess I'm going to get dinged by YouTube for saying so many times in this video, but whatever. I mean, it was just his shirt, actually. But anyway, this is a great opportunity for me to talk about the third bidding system that you guys may be experiencing and that's monthly and or yearly. And so what we're going to talk about is those as one lump sum. And here's how you do that. You've got to look at how many snow events you get in your typical area. So in Minnesota, we get anywhere from 12 to 15 snow events. So, I'm going to put together a a bid based on 17 to 19 events. That way, I'm protected. And that is literally how we do it inside the industry. Now, you have to figure out in your local area how many snow events you get. And it's going to be different than my area. Northern Minnesota gets more snow. Lake effect areas get more snow. So, be very careful that you get this number right. Now, when you go to put your bid together on a perime basis, if it's a yearly contract and they say, "Hey, we need to allocate for every month, well, then you start at least, this is the way we do it in Minnesota. We start in November and we go through March." But here's the beauty of it. If it snows in October, we get bonus money. If it snows in April, which it did last year, we got 19 in. We get bonus money above and beyond. So you define the parameters of how many months you're willing to provide snow plowing and snow service under this lump sum. So let's re-review this thing. I get 17 to 19 average events in Minnesota. I figure out how much it costs every single time it for me to go out and plow on a per event basis. I sandwich all those together and I give that to them as a lump sum. That could be for a year and if they want it for a monthly then I just divide out how many months of service I'm willing to provide. Any service that I provide outside of those months I get to invoice on a per time or per hour basis or however you guys see fit. So that's how you do it. Now this is a little bit dangerous to you guys. And what what I mean is is here's something that you guys are going to experience. If you go way over on your snow events, you should put a clause in the contract that says that you get paid extra. But a lot of times that that clause won't kick in because you just don't get enough snow to activate it. And here's another thing that you guys may may experience is some associations and some businesses are going to want another clause in the contract that's saying if you plow under the minimum amount of events, they get a refund. So if you see that, don't be shocked and surprised when that comes to happen. I have a contract right now where if I plow under 10 times, I actually have to give them money back. But realize they've been paying me every month whether I plow or not. So, this works both ways, good and bad. Wish I could have said that a little bit faster for you. Now, this is the tip of the iceberg, guys. Ice control is an whole other scenario, and it's actually a lot more involved than even snowplowing. In fact, at least in Minnesota, commercial ice control can be almost double what you would experience with snow plowing and snow removal. And so that's why we put together these courses to help you guys. Because honestly, if you guys think you're going to learn everything from this video, I'm going to be a big red flag cautioning you to just do your homework because there's not enough information in this video for you guys to be able to go out and do it. And I can't make a video long enough and post it on YouTube to really drive home how important this part of the education process is. That's why I have hours and hours and hours of programs designed just to help you guys really drive home your snowplowing business because I'll tell you straight up, it's a big part of my business. It's a good part of my business. And inside my company, I have all three ways bid. I have hourly, I have per event, and I also have seasonal snowplowing bid. So, I wrap all three of those together into a nice tidy bow package. I I missed on purpose. I'm really not that uncoordinated. I wrapped them all three together. That way, I have all of my bases covered no matter what the season brings my way. Now, in the next video, we're going to be covering equipment rates. Make sure you guys stick around and let me know what you think of this video because I feel like I did a lot of talking and not a lot of action. And I don't know if you guys like that, but sometimes in education, I just got to speak. I can't be doing. I got to be talking. Tell me what you guys think. God bless. Go get them, guys. And hope you have a super snowy year. Hey, Jake. Yeah. So, do you get a lot of looks going down the road with a snow plow on, pulling a lawnmower every year? Before and in middle of June. In the middle of June. What are you talking about? When we take it off finally. Oh, we took it off in Was it middle of June? It was the beginning of June last year. Oh, holy crap. He's right. Why do we leave it on so long? Uh, cuz it snowed up and through April. We had 19 in in April, but then we got And then you wanted to you wanted to do a video on it. So, we left it on for another two months. Two months. Month and a wow. Not that bad. All right. So, the fact of the matter is we actually put it on early. That way, well, let's find out. Why do we put it on early? Do you know? To make sure it's not broken, right? We get all the bugs out of it. That way, when the season starts, everything is just flowing like This is why I hate it. I was put it down. Flowing like a river. All right, we'll see you in the next video.