Anyone could conceivably win a contract by being the lowest bidder. However, being the owner of a successful snow and ice removal business isn’t a race to the bottom. Instead, it’s a calculated marathon of sustaining a business model that is both competitive to your region and lucrative to you for the foreseeable future.
Better snow removal bidding is about building the financial sense to be the clear choice in a long list of competing bids and contractors. Yet finding that sweet spot between being budget-friendly and making money takes strategy. Luckily, we’re here to help you with our snow removal pricing calculator so your estimates don’t get lost in the pile.
Know Your Overhead Costs
Overhead costs are the consistent, assumed cost of simply running your enterprise from day-to-day. When you charge a client, you need to take this expense into your quote or you’re going to lose more money than you stand to make. Here’s a rundown of the overhead you typically see within a snow business. Any snow removal estimate calculator should consider all of these expenses before it spits out a quote.
It doesn’t take a snow plow estimate calculator to tell you that time is money. The truth is, every minute your fleet is on the road, they’re costing you money. Understanding how long a job will take down to the minute will help you achieve a better understanding of your costs so that you can carry them into your quote.
Once you have a solid understanding of how to estimate the length of a job, you need to be able to convert that arbitrary number into man-hours. How much do you pay your crew? If it’s just you, how much is your time worth? Find a figure that is sustainable but attractive and multiply it by the estimated duration of a job.
You’re a commercial plow business. That means you’ve invested in some heavy-duty equipment to get the job done, whether it’s a fleet of vehicles or otherwise. Your equipment investments shouldn’t cut straight into your revenue stream. You should be making informed equipment investments that you can afford based on the quotes you send out, with an expectation of actually winning a percentage of those clients. The term “it’ll pay for itself” shouldn’t just be a tagline; it should be the absolute truth.
Bulk road salt and de-icer aren’t cheap. They’re perhaps one of your greatest investments for this type of business. Moreover, you typically buy these products upfront. Ensure that your plow quotes reflect your cost of materials; they are a major expense that needs to be accounted for.
Lastly, how big is the property you’re bidding on? While it certainly saves time to have a quote template at the ready, don’t standardize your pricing to the point where you charge the same for a small, medium, or large property. Measure the client’s property and write up a quote that reflects the scope of the work, down to the square foot.
Choose a Pricing Model
There is no reason to reinvent the wheel every single time you send out a quote. If you don’t standardize your quoting process by settling on a pricing model, then you’ll go crazy trying to come up with a figure each time a potential client comes along. We recommend you choose a pricing model that is distinctive, competitive and makes the most sense to you.
It can be attractive to offer a seasonal rate to clients. With this kind of quote, you send a clear message that is both easy to understand and simple for your potential client to wrap their head around. Just make sure you have your bases covered here; you don’t want to bite off more than you can chew and not get paid for it.
An hourly rate is just as simple a message as a seasonal one. You’re telling your client that you charge for the time spent on their property (and possibly the time to travel there) and take any other complications off the table. An hourly quote is straightforward but also protects you; you charge only for the work you do, which is a good thing. While hourly quotes are great, there is still an expectation that you provide a client an accurate estimate of time so they aren’t blindsided when the first invoice comes.
Depth of Snow
Many commercial snow plow businesses will charge by the inch, which is to say that they categorize weather events into three basic categories; light, normal, and heavy. Heavy events have the most snow (let’s say 6″ or higher) whereas a normal event would be your average snowfall that needs to be cleared away.
However, don’t just stop at depth; you should also give your client a breakdown of how many of each event you’re estimating for. We suggest you estimate for 15+ normal events (use your knowledge of your region to come up with this figure) and fewer light and heavy events. This type of quote is great at not just putting a value on your services, but showing a client that you understand the region and the typical snowfall amounts.
You can offer a simple “per push” plan, which is a flat rate fee for every time you visit a parking lot or property. Considering that many snow events require multiple plow trips in a single day to a single property, then you’ll find that this price model approach can add up. We still suggest giving the customer an estimate of how many “per push” events will occur for the season so they can better budget.
Understand the Competition (and Their Prices)
In the art of war and snow plowing, it’s advantageous to know your enemy. Okay, maybe a snowplow competitor isn’t quite an enemy, but they are someone you should be aware of. Ignoring the other plow companies in your area will mean you risk being ignorant of any edge they might have found. If you keep your eyes and ears open, then you can act quickly with quoting and have the confidence to know that your price estimate isn’t coming out of left field.
Consider Packages and Recurring Revenue
Like it or not, the subscription model is here to stay. Whether it’s your favorite iPhone application, streaming service, or plow company, it’s lucrative to land on a pricing model that guarantees future revenue.
What does that look like? A package deal that gets you through multiple winters at a slight discount is one consideration. So, too, are recurring “add on” options, like monthly ice melt deliveries so your clients have a fresh supply for their sidewalks and entrances. Whatever you dream up, a monthly model will keep revenue flowing.
Measure Twice, Bid Once
Whatever you do ensure that the quote you send a potential client is the best quote you can send. That means it’s your best, most competitive price. However, that also means that the quote is thoughtful and free of any spelling or grammar mistakes. Your quote is your first impression; show a future client that you can do more than push a plow around their property. Show them that you’re professional and detail-oriented and the rest will fall into place that much easier.