Do you want to start a snow plowing business? If YES, here is a complete guide to starting a snow removal business with NO money and no experience plus a sample snow removal business plan template.
The snow season is one period everyone in the united states looks forward to. Snow affects human activity in four major areas, transportation, agriculture, structures, and sports. Even though snow removal (including snow ploughing, shovelling, and ice removal) is a seasonal business in many parts of the world, but it still can serve as a part time or even full time income earner.
A lot of contractors who work outdoors such as roofers, masons, and lawn care professionals, indulge in snow removal in the colder months.
To start and run this business successfully, you need more than just a shovel and a wheelbarrow. Starting and running a successful snow removal business involves organization, knowledge, patience, perseverance, people-skills, and a number of other traits.
A lot of entrepreneurs fail, not because they weren’t skilled in working snow, but because they were not skilled in running a business.
Have it in mind that the bigger you want your snow removal company to be, the better you need to be an entrepreneur as the responsibility will be greater. Indeed it can never be wrong to dream big, but if you are a new business owner, it is best to start small and work your way up.
Indeed a lot of snow removal businesses are seasonal in most areas of the U.S., but the high season brings in consistent, reliable demand.
We believe that a snow removal business can be as simple as a young lad earning money on the weekends using his dad’s snow blower, or as complex as a fleet of salt trucks and workers. But no matter the scale you hope for, starting a snow removal business can provide a reliable way to earn an income during the winter season.
Furthermore, if you reside in an icy climate, providing snow removal services to neighbours and local businesses is an opportunity to make extra income during the winter.
Also plenty of individuals prefer to leave snow removal to professionals with appropriate equipment, rather than clear it themselves before a long day at work; which is why to start your own snow removal businesses; you need the right equipment, insurance and a ready customer base. Read up more about how to successfully start a snow removal business.
Steps to Starting a Snow Removal Business
1. Understand the Industry
Businesses in this industry provide snow ploughing and ice removal services to icy cities. Reports have it that over the five years to 2016, the Snow ploughing Services industry gained immensely from favourable weather conditions, which includes greater than average annual snowfall totals and numerous high-accumulation snow events which gingered up demand for snow ploughing, salting, de-icing and other services provided by businesses in the industry.
Indeed a healthy economy with thriving businesses, substantial consumer spending as well as a growth in non-residential construction over the past five years, has aided to widen the industry’s potential client base and bolster demand, as property owners and merchants are always depending on industry businesses to keep their parking lots and sidewalks free of ice and snow.
Note that Industry value added (IVA) which measures the industry’s contribution to GDP, is believed will grow faster than the economy as a whole, expanding at an average annual rate of 2.6% over the 10 years to 2022. Comparatively, GDP is also believed will grow at an average annual rate of 2.2% over the same time frame.
Then generally, an IVA rate which exceeds the overall economy is indicative of a growing industry. Other factors such as expanding industry revenue, a rising number of companies and establishments, increased employment and an enhanced level of product development also point to an industry in its growth phase. Another indicator of the industry’s growth phase involves the level of product innovation in the industry.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The snow removal business is perfect for anyone who doesn’t mind driving and also enjoys being alone for extended periods of time. This is because snow removal professionals spend hours alone, driving from client to client. Note that starting a Snow Removal business while maintaining another job that has regular hours is difficult, if not impossible.
This is because your clients expect snow to be cleared promptly, and snow plough drivers often head out whenever a storm begins -regardless of whether it is morning, afternoon, evening or middle of the night.
The ideal customer for this business is an individual or business that is located in a metropolitan area. This is because people and businesses in cities are close together, business owners can spend more time ploughing clients’ properties and less time driving between clients.
3. Decide Which Niche to Concentrate On
Even though a lot of cities and states in the United States have their own snow ploughs, most individuals and businesses don’t have specialized, heavy-duty snow removal equipment.
Also even though snow can easily be cleared from driveways, walkways and (small) parking lots with shovels or snow blowers, a lot of individuals would rather have someone else do it. They either don’t want to, aren’t physically able to or don’t have time to clear snow themselves.
Snow removal businesses specialize in removing snow from personal residences and commercial properties. Note that big commercial sites like banks, hospitals or mall parking lots offer one-stop ploughing opportunities – but keep in mind the liability pitfalls.
Also, since a lot of these sites are sewn up with a large provider deploying multiple trucks via sophisticated storm-tracking equipment; it may be worthwhile to research the benefits and drawbacks of signing on as a subcontractor. Also note that residential ploughing might offer faster turn times, but it also means handling more customers, more phone calls and having a lot more people to answer to.
The Level of Competition in the Industry
When planning to start a snow removal business, you should know that it is a tough job. As the white blanket thickens and the centimetres accumulate, so do the long hours.
When your clients are snowed in, you’re snowed under. Have it in mind that in this business, few competing snow removal experts working in your region may approach you at the beginning of the season, or over the course of the winter, offering to “share the workload” or “split streets” with you.
Also have it in mind that they will even try to convince you to apply a surcharge for heavy snowfall seasons. But know that when you discuss these subjects with competitors, you are walking on thin ice. Agreements with competitors on these topics are illegal and could have significant consequences for you and your business. Before starting this business, it is important to note that it is illegal to agree with competitors on:
- The prices you are charging, including any increases or surcharges.
- The territory, streets or neighbourhoods you will cover.
- The number of customers you will sign up.
We advise that you plough through the season with the following tips:
- Do not discuss business with competitors unless you are accompanied by a lawyer.
- Decide your prices, price increases and surcharges on your own.
- Explain the terms of your service contract to your customers.
4. Know Your Major Competitors in the Industry
- Ceres Environmental
- Winter services Inc.
- Ethel Rivet
- Senseks Services
- DH Funk and Sons
In this business, it all depends on your investment budget and on how much money you want to earn, there are a few methods of removing snow and ice during winter months. We believe that the most expensive of these is a snowplough and salt spreader mounted on a four-wheel-drive truck.
Note that this option will set you back about $2,000 to $3,000 for equipment, less the cost of the truck, but it gives you the potential to do the most work and earn the most income.
The second option is a self-propelled snow blower as well as a manual salt spreader for de-icing. We believe that both pieces of equipment are walk-behind models and require a truck or trailer to move from job to job. Note that this is a good option for people wanting to earn extra money on nights and weekends.
Also, the third option is the good old Armstrong method. Armed with nothing more than a $20 shovel and bag of salt, you can remove snow and ice.
But irrespective of the method you choose, snow removal and surface de-icing is an easy service to start, operate and sell. Yes this is a seasonal and weather-dependent opportunity but it is not uncommon for snow removal businesses to earn $1,000 a day or more when the snow blows.
Note that a Snow Removal Business makes money by charging clients for snow removal services. Clients may either pay on a per-ploughing basis or enter into a season-long contract. Also we believe that a lot of snow removal businesses serve one specific area.
A business might bring on additional drivers so it can serve more clients, but hiring employees significantly increases a business’ operating expenses.
5. Decide Whether to Buy a Franchise or Start from Scratch
Indeed a lot of businesses in the snow removal industry started from the scratch and are struggling to create a fulcrum for their business. You should know that building a Snow Removal Business from the scratch requires patience, passion, enthusiasm and immeasurable risks but buying a franchise is a very quick way to own a Snow Removal Business.
It is very important to state that buying into a franchise is far better than starting from the scratch because it takes time to build a client base and local reputation. When you advertise a known brand name in your new market, customers come ready-made, and the cash starts flowing faster.
Also, in this industry you must learn all the basic things needed to strive on your own, with “rookie mistakes” part of the learning curve. But franchisors provide new franchisees with extensive training in every aspect of their new business, from receiving a call to the service endpoint. And many offer advanced training to help you stay on top of your business as it grows.
A lot of entrepreneurs franchised or not, love what they do. In fact, they are rather doing what they love, which can result in neglecting how they manage their business.
Additionally, caught up in the day-to-day details of such “mundane details” as taxes and supplies, they fail to innovate and develop as leaders and executives. That is why franchisors provide field support specialists to help keep their franchisees on track, training them to become managers and leaders working on the business, not in it.
6. Know the Possible Threats and Challenges You Will Face
Whether we believe it or not, every lucrative business has its challenges and this seasonal business is not left out. It takes more than just funds to build a successful business.
Like in the snow removal business, it takes risks, commitment and survival to be able to achieve or build a breathtaking snow removal business. Below are the few challenges and threats faced when starting up a Snow Removal Business;
- Developing the Vision and Business Idea
- Raising Capital for your Start-up
- Assembling a Business Team
- Finding Good Employees
- Finding Good Customers
- Dealing with Competition
- Unforeseen Business Challenges and Expenses
- Exiting the Business
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When starting a business, you should know there are many legal entities in the business world and it takes careful consideration to be able to choose one suitable for a particular spec of business.
When it comes to an individual planning to start a Snow Removal Business, a Limited Liability Company is the best legal entity to start up with, because a limited liability company (LLC) provides the limited liability protection of a corporation, while avoiding the double taxation.
Also since it is taxed like a partnership, it can be more flexible than a corporation and a sole proprietorship – Seems like the best of all worlds.
It is still very important to state that a lot of investors do not like to invest in LLCs. First, investing in an LLC can create unintended consequences under the Employee Retirement Income Security Act (ERISA) pension funds for those who may have invested in the fund.
This is the reason why a lot of funds are prohibited by their governing documents from investing in an LLC. Second, venture capital and other funds do not want to wait for a portfolio company to finish its own tax return and issue K-1s to its members before the fund can do its tax return and issue its K-1s to its investors.
Finally we believe that there is a significant tax incentive to investors who invest in “qualified small business” stock, which requires that the company receiving the investment be a C Corporation. So to cut the long story short, it is recommended that individuals start a moving business as a Limited Liability Company and convert to a C corporation immediately before they receive substantial outside funding.
8. Choose a Catchy Business Name
- Snow Job
- Señor plough
- The Shovels
- The Longest Yard
- Lords of Lawn
- Snow truck
- Clear Guild
- Snow Knoll
- Power Mowers
- The Mow Better
9. Discuss with an Agent to Know the Best Insurance Policies for You
In this business, you will surely depend on your snow removal insurance to provide protection for both your vehicles and business.
We believe that the insurance can include a BOP with general liability, workers’ compensation, commercial truck insurance and other coverages that provide protection against costly lawsuits. Have it in mind that insurance is usually required by law or your snow removal contract.
If you earn an income by providing snow removal services to either residential or commercial properties, make sure you are familiar with the local rules and regulations where you work. Some of the needed policies include;
- Workers Compensation Insurance
- General Liability Insurance
- BOP insurance
- Commercial vehicle policy
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
Intellectual property is protected by law for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interest of innovators and the wider public interest, the Intellectual property system aims to foster an environment in which creativity and innovation can flourish.
In the snow removal industry, intellectual property rights protect Trademarks, industrial designs and geographical indications.
11. Get the Necessary Professional Certification
It is very important to state that professional certification is a process in which a person proves that he or she has the knowledge, experience, and skills to perform a specific job. This comes in the form of a certificate earned by passing an exam that is accredited by an organization or association that monitors and upholds prescribed standards for the particular industry involved.
- Certified Snow Professional (CSP) certification
- SIMA certification
- ASCA certification
- Accredited ASM Program Certificate
- SN 9001
12. Get the Necessary Legal Documents You Need to Operate
You should have it in mind that licenses for snow ploughing are typically regulated locally. For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
In this business, we strongly advise that you require clients to sign a services agreement before starting a new project. Note that this agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions.
This is because just like any other snow removal businesses, you will typically choose to distribute hourly or seasonal contracts, depending on the amount and frequency of ploughing requested.
13. Raise the Needed Startup Capital
When you do not have enough funds, your business ideas are just like water poured on a rock. In case you do not know, funds in business is a big ingredient that can move a business to the limelight, and without a detailed business plan; a company won’t be able to land sufficient funds from prospective investors.
You should be very prepared when planning to start this business and also have it mind that getting funds is not an easy task because no one would want to pledge his/her money in a business that can’t guarantee returns and profits. Basic ways of financing a Snow Removal business include;
- Funds from Personal savings
- Getting loans from families and friends
- Taking small business loans
- Getting microloans
- Attract an angel investor
14. Choose a Suitable Location for your Business
Be it a small or big business, location is one decision that tends to hit a business hard when made wrongly. Location decision has a direct effect on an operation’s costs as well as its ability to serve customers (and therefore its revenues).
Have it mind that location decisions, once made, are difficult and costly to undo. This is because the costs of moving an operation are often significant and you run the risk of inconveniencing customers and staff. This is why you need to get it right once and for all. Things to consider when choosing a suitable location may include;
- Foot traffic
- Accessibility and Parking
- Proximity to other businesses and services
- Utilities and other costs
15. Hire Employees for your Technical and Manpower Needs
Indeed a lot of snow removal businesses are one-person operations, largely to keep their ongoing costs minimal. Most of the businesses that hire employees not only have to pay those employees’ salaries, but they also must pay higher insurance premiums. But irrespective of these expenses, a few snow removal businesses do hire employees.
We believe that a business might be ready to hire employees when it secures a contract for a large parking lot, which may require ploughing and shovelling, or has more clients than one driver can get to in a reasonable amount of time. So to be able to grow your snow removal company, you will need to work hard, have people skills and be patient.
You will also need to market your business effectively because success and profit won’t come overnight. There is often a lot of competition to secure contracts. You may need to start out with residential customers if you are having trouble signing up commercial contracts.
We strongly believe that equipment will probably account for the biggest portion of your startup costs. When starting, you don’t necessarily need all brand-new tools and equipment.
We believe it will save thousands of dollars in startup costs by purchasing a used truck, used plough, used salt spreader, and any other equipment you may need. But if you already have a truck for your existing business, you already have one necessary piece of equipment.
Also note that the right equipment for the job really rests on the services you will be offering and how large a customer base you plan to serve. From the least expectations, you’ll probably want a plough that can be mounted on an existing truck. This piece of equipment alone can cost between $3,500 and $6,000.
Snow blowers might be required if you plan to remove snow from a large number of walkways or sidewalks in a small amount of time.
These can cost up to $3,000 each. Transporting snow blowers will also require trailers. The more customers you plan to serve, the more equipment you will need to sustain your business. Generally, the equipment you will need may include;
- Snow shovel
- Snow blower
- Ice pick
- Winter service vehicle
- Snowmelt system embedded in pavement
The Service Delivery Process of the Business
We believe that in a lot of high elevation or heavy snow accumulation areas, companies with snow removal equipment offer to provide services to remove the snow. We also believe that contractors may work on a per-time basis, full season contract, or will-call status.
Per-time service (or per-push) is usually invoiced monthly and customers will be charged for each time services are provided.
A lot of businesses in this industry will charge per-time and per-inch where the depth of the snow is even taken into account. A full season contract is quoted and paid upfront at the start of the season and services will be provided automatically according to the contracted terms.
Note that terms may sometimes differ between companies. For instance, few full season contracts will expire after a certain amount of trips where others are unlimited. And finally, will-call service is where the client makes contact with the snow removal company to initiate a single clearing. This is not an automatic service and charges are usually higher for will-call jobs.
In this business, snow removal services may include driveway and parking area snow removal, walkway and deck handwork, and occasionally roof clearing. You may have to use hand shovels, walk behind snow blowers (or snow throwers), truck ploughs, skid-steers, light-weight tractors, and heavy front-end loaders.
A lot of times also, these machines will need to use tire chains to perform their tasks. Also note that snow may be pushed by ploughing methods or blown to an area of the property by snow blowers. Or you may apply sand or salt in some locations to help melt ice accumulations.
It is very important to state that a Snow dump site is a location where snow is dumped as a part of the snow removal process. These designated sites are sometimes required to prevent water and ground pollution because the snow collected on roads typically contain a variety of grit, de-icing chemicals, vehicle fluids, engine emissions, and litter. Few of the pollutants become diluted and wash away with the melt-water and some concentrate at the dump site.
We believe that dumping into fresh water is almost universally prohibited due to the serious impact that de-icer salts can have on freshwater aquatic life. The states and local governments determine their own dumping policies.
We also believe that a Snow dump site selection is based on the availability of suitable land and pollution prevention factors that may include distances from lakes and streams, installation of silt fences, soil and aquifer type, and other factors. A lot of these sites may use filters and settling ponds to help prevent pollution from spreading.
16. Write a Marketing Plan Packed with ideas & Strategies
The most effective way to market a snow removal business is via word of mouth. This is why it is very important to provide excellent service so clients are happy. To encourage happy clients to recommend the removal business, business owners may want to offer discount for referrals. Ways to market your snow removal business may include;
Using Plough-Side Ads
We advise that instead of allowing your plough truck to serve as a purely utilitarian vehicle, make it an advertisement as well. Try to get a vinyl sign created featuring your snow removal company’s name and your contact number, and place this on the side of your plough.
Use Mailbox Fliers
In case you offer driveway ploughing services, alert homeowners with mailbox fliers. We advise that you create a half-page flier featuring your company’s name and rates. Reach local areas with these fliers, placing them on all mailboxes or focus on mailboxes that rest at the end of excessively long or steep driveways where your services would likely be most appreciated.
Using Community Board
It is advised that you make use of free advertising space by posting a sign advertising your company on a community board. Try visiting area spaces in which community members gather such as the library, community centre or rec centre. Then place a sign for your company on each board you locate.
Make use of Business Services Brochure
Indeed a lot of businesses seek snow removal businesses to clear their parking lots, making them safe for patrons to traverse. You need to reach out to area business people by creating a brochure specifically tailored to them. Remember to include information about any parking lot ploughing packages you may offer, such as a flat rate for an entire winter of ploughing, in these brochures.
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
A lot of snow removal businesses provide lawn care services during the warmer months. This aids to cover loan payments and equipment depreciation when there is no snow. Indeed advertising is a necessary function for all businesses.
We all know that snow-removal businesses are operational for a limited amount of time each year, which is why it is advisable that you start advertising your services months ahead of the first snowfall. This way, your company is so familiar in the community that you become the natural choice for new customers. Ways to boost your brand awareness may include;
- Print flyers and paste around town
- Place an ad in as many publications as are available
- Participate in fundraisers
- Sponsor a local team such as your child’s little league
- Create a social media presence
- Negotiate with customers to place a sign in front of their homes