When winter is upon us, the snow removal business can be bustling. But snow and ice can be as fickle as your customers at times. There are lots of different sizes and inches of snow to plow. Sometimes it can be hard to come up with an appropriate price. Read here to learn why and how to establish a minimum snow removal fee.
Why Charge a Minimum Snow Removal Fee?
Smaller, one-time jobs are only as profitable as they are convenient for you. Your customer base could be mostly small lots or far away. You still want to remove snow for them but it makes your pricing model unprofitable. In these instances, it is good to determine a minimum snow removal fee.
How Much Should Your Snow Removal Fee Be?
When determining how much to charge for your snow removal fee, consider these factors:
- Distance Traveled
- Gas Cost
- Area to be Plowed and/or Sanded
- Time Spent on the Job
Some people find it helpful to charge a fee per mile when they travel beyond a certain radius (say 7 miles) to a site. Make sure this fee accounts for gas prices in your area and time spent traveling to the site over a certain amount. More than 25 minutes, depending on the ruralness of your area, is a good place to start.
Another factor to consider is what type of snow removal you will be doing:
- Shoveling or blowing generally cost $25-$75 per hour
- Plowing generally costs $30 to 100 per visit
- Salt spreading charges about $20-$65 per application
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Finally, charging per hour may not be as beneficial as charging by the amount of snow removed. Especially not if you’re a small snow removal business. If you know that clearing 6 inches of snow takes you much longer than removing 3 inches of snow, you might want to bracket your prices. Charge a bracketed price for removing 2-6 inches of snow. Then a slightly higher price for removing 6-9 inches and even higher a price for removing 9-12 inches of snow. This factors in the longer time spent removing larger amounts of snow. It also takes into consideration you getting more efficient in your snow removal time. E.g. a lot that originally took you 30 minutes now takes 20 as you improve your service efficiency.
Communicating Your Snow Removal Fee To Customers
Customers need to understand your pricing model if you expect them to return the following winter. Explain the factors that went into determining your cost (distance traveled, amount of snow removed, the labor intensity of removal method, etc.). Once you have completed a job for a client, be sure to have your contact info on the invoice you give them. Also, it’s good to include an estimate for next year’s snow removal cost. If you live in an area with consistent yearly snowfall, consider a seasonal snow removal cost. Seasonal removal costs run between $200 and $600. A seasonal snow removal cost will help you build long-term customer relationships. . Additionally, informing your customers of your seasonal rates can make for better long-term planning of your snow removal routes. This will save you money in the end by decreasing travel time. Planning ahead and establishing a minimum snow removal fee for your services can ensure you maintain a profitable rate.