Don’t be caught without a signed contract for your commercial snow removal services. In your agreement, you lay out the services that your crews will perform, cleaning off snow from your customers’ parking lots, walkways, crosswalks, and entrance doors.
Snow and ice management companies recommend five types of contracts for different segments of your customer base. These payment schedules depend on how much snow your region gets as well as it helps you keep consistent cash flow over the winter.
Here are five types of snow removal contracts:
- Pay per push
- Pay per inch
- Pay per event
Different Snow Removal Contracts Based on Your Client’s Needs
As you build your snow and ice management business, you’ll see that there are different types of snow removal contracts because your customers all have different needs.
Also, if you live in a low snow area, you can get away with time-based and pay per push contracts. Successful snow and ice management companies recommend different pay structures based on where you plow snow as well as how much snow you get each year.
Here’s the breakdown of the pay structures for snow removal contracts:
- Seasonal contracts: This is a long-term contract for snow management over a 3-5 year period. You then have the security of work and cash flow, no matter how much it snows.
You and your customers know that the cost will balance out over the extended period because some years will have many snow events, while others will be low snow.
- Pay per push contracts: Your customers pay you after each snow event.
If your area gets consistent snow, then the customer knows you’ll return as many times as needed to keep parking lots and walkways clean throughout the event. Your customer pays you for each visit you make to their business.
- Pay per inch: You set up a fee structure with your clients ahead of time. Then, you set up a bracket where each slot is charged differently.
For example, you charge X for 3”-5” of snow, X for 6”-9” of snow, and X for 10”-12” of snow. You and your customers rely on what your local weather stations report for the exact snow totals.
- Per event: You charge a flat fee per storm. This structure works well for low snow areas.
- Time and materials contracts: You charge for every snow event that requires your snow removal services. You can set this up by how many hours you estimate that you’ll be at a particular property. Also, make sure you include material, snow removal equipment, and other overhead with this contract.
How to Bid for Commercial Snow Removal
Most folks, when they’re starting out in snow removal services, think they can whip up a contract, include the pay structure, and then meet with the potential customer.
Not so fast. To make a bid correctly and to earn enough money to compensate for your time, materials, equipment, and crews over the winter, you need to refer back to previous years.
If you’re just starting out, you can guess what some of these costs would be, but you may also want to consult with more seasoned snow professionals to flesh out some of the numbers.
The article describes the following parts for coming up with a bid:
- Know your financials: This part of the bidding process includes your basic financial statements, the cost of doing snow and ice removal, and overhead. Overhead includes your crews, snow removal equipment, ice melt as well as indirectly your back office staff.
- Production numbers and measuring: Consider the time it takes to clean a parking lot or sidewalks using your crews, snow removal equipment (skid steer and spreaders), and materials (ice melt) used to complete a measurable job (shoveled sidewalks).
You also need to measure the size of each property you’re servicing and calculate whether this job will be along your snow removal routes. You don’t want your crews driving out of the way to maintain a new client because it’ll cost you more in overhead.
- Event history: How often does it snow in your area? For example, in southeast Pennsylvania, there may be four snow events between 4”-8” during the winter.
You need to research the average amount of snow your region gets each winter. For example, add the total number of years you started keeping records, and divide by the number of years to get the average snow totals for your area.
- Customers are essential: You can’t make any money or remove any snow without customers. Be wise, though. Not every customer is going to be a good fit for you.
Initially, you need to “qualify” your customers to make sure that they’re along your routes and are the typical size and scope of your other customers. You don’t want to lose money by adding a property that costs you money in materials and time.
Then, you need to gather up all of this information and set up a budget that will help your snow contracting company stay in the black throughout the winter.
How to Find a Snow Removal Contract Quote Template
The internet has hundreds of templates to choose from, but you need to make sure that whatever snow removal quote template you use covers all the bases.
Here are six quote templates to try:
How Spyker Spreaders Help You Clean Off More Sidewalks and Entrances
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Our new Ergo-Pro™ Ice-Winter Spreader gives you these additional features:
- You get a stainless steel carving blade, so you don’t waste any ice melt.
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