Breaking the Ice

As most people hunker down at the sound of another winter weather warning, snow and ice management contractors head out to reap the harvests of abundant snowfalls. Recently, nature has been accommodating to the snow and ice business while money is hard to earn elsewhere in the current economy. If you plow snow, you’ve experienced the potential. But if you only offer a plowing service, you’re missing out on the increased profits of material spreading. Whether you’re currently in the snow business or looking to get in the game, it may be time to break the ice and jump into the growing trend of full-service snow and ice management.

Turning Lemons into Lemonade

Everyone is familiar with the saying, “When life hands you lemons, make lemonade.” Rather than handing out lemons, Mother Nature has been dropping record amounts of snow throughout the past couple winters. To make the best of this situation, lemon-flavored snow cones may not be the answer. Instead, why not turn the white into some green? The long-term winter forecast combined with the cloudy economic environment is creating the perfect storm for new people to get in the snow and ice business or for current snow removal contractors to extend their services.

Some may be afraid that they’ve missed this business opportunity, but the cold, hard truth is that the harsh winters might not be over. In fact, this may only be the beginning since weather trends such as the current one typically last for about seven years. Severe winter weather has even extended its reach into regions that typically don’t experience snow or ice and many cities are being caught off guard.

Given the current unemployment rate, many are entering the snow and ice business to take advantage of the jobs created by nature (which may seem to be doing a better job at it than the government). Although the industry has already seen an influx of newcomers, there is still plenty of work to go around. For those who own a pickup, there are few barriers to entering the industry. With a small investment, a plow can be attached to the pickup, transforming it from a regular gas-guzzler into a moneymaking machine. For a little added expense, contractors can realize the real profit potential by adding a spreader and offering complete snow and ice management services.

One-Stop Shopping

In the sense of adding services, snow and ice management firms can be likened to discount stores. As if these stores weren’t big enough in the first place, they have recently been turning into superstores, offering everything from prepared food to oil changes. Not only does this earn more business from existing customers, but the added convenience also attracts new one-stop shoppers, all while adding growth and revenue to the store. No, this doesn’t suggest that contractors should sell rotisserie chickens cooked over their defroster, but similarly, many successful snow and ice management firms have appealed more to clients and secured new contracts by providing the options of both plowing and spreading.

When offering new services, current clients often sign up first, especially when a good business relationship exists and the benefits are explained to them. This upselling allows a contractor to earn more money without increasing his or her customer base. When he or she  does search for new clients, prospects are likely to be impressed with the service packages he has to offer and more likely to hire his business.

Beyond the typical salt and sand, spreaders present additional choices to offer customers. Other deicers, such as magnesium chloride or calcium chloride, provide options for treating ice more effectively in cold temperatures. The contractor may also consider pretreatment services, which help reduce liability while increasing profits. This is a relatively new concept in which material is spread before a snow event, preventing a bond from forming between the ice and pavement. The lot may still require plowing and spreading once snow begins to fall, but it will then be much easier to service.

Furthermore, many snow and ice management firms have started spreading simply because their clients demand it. Liability is a growing concern, and the currently high unemployment rate will likely yield a high number of lawsuits. More people are looking to make a quick buck (or thousands of them), and there are plenty of lawyers ready to take on their case. While many companies are cutting costs, they continue to allocate sufficient funds toward having their properties deiced, which helps protect them from a costly slip-and-fall lawsuit.

Contractors also need to consider their own liability when it comes to spreading. By not offering to deice a property, they only increase their liability exposure. For example, a contractor who only provides a plowing service may sign an agreement with a commercial property to keep the lot cleared. After a snow event, the contractor plows the property, but a customer slips and falls on a patch of ice later that day. If a lawsuit results from the incident, the contractor may appear negligent for not offering an adequate service to treat the ice.

Working Not That Hard for the Money

While spreading is becoming more of a necessity in the snow and ice business, it shouldn’t be considered a burden, but rather a blessing. Spreading provides an efficient way of making money, yet requires little extra work and only a small investment to begin. Depending on the size and quality, a truck-bed or tailgate-mounted spreader ranges from $750 to $5,000 in price. The low cost is even easier to swallow after considering the productivity and quick return on investment.

The spread-to-plow ratio in winter maintenance highly favors spreading. Every time a contractor plows, he or she can plan to spread between four and 10 times. In other words, property that is plowed 10 times a year may require up to 100 spreading applications. Spreading can even extend a contractor’s season, since freezing rain events often occur before the first snowfall, and freeze-thaw cycles continue to require management into the spring. A spreader also helps to hedge a contractor’s bets in the chance of an uneventful winter because when a season’s snowfall is minimal, ice remains a perennial problem.

Not only can spreading be done more often than plowing, but it can also be done much quicker. One spreading application may only take a quarter of the time required to plow the same area, so a mid-size lot that takes 20 minutes to plow may involve just five minutes of applying ice melt.

Although many fledgling contractors believe their operation isn’t large enough to get into spreading, even the little guys can greatly benefit. Take, for example, a small operation that serves 10 accounts, each requiring approximately 200 lbs of salt per application. For each snow event, the contractor will likely spread material at least three times throughout the course of the event. Although many pricing strategies exist, in this case the contractor implements a flat rate, charging $125 per application. Conservatively estimating three spreading applications per snow event, he can charge $375 per customer, or $3,750 for all 10 accounts. If the area receives 30 snow events during the season and he spreads three times for each customer per event, he or she makes $112,500 from spreading services alone.

But what about the costs associated with spreading? Cost of materials is the most significant factor to consider, and in the example above, the contractor spreads 6,000 lbs of salt per snow event. Figuring salt at 7 cents per pound, his total salt cost after 30 snow events is $12,600 — leaving him with a total of $99,900 after subtracting materials from the total revenue. Of course, there are other factors to consider, such as overhead costs, fuel and vehicle wear and tear. However, even a liberal estimate of these costs will leave the contractor with a healthy profit.

Barry Truan is a sales coordinator for TrynEx International, based in Warren, Mich.