The Snow Pro Report

By CE Contributing Authors October 3, 2012 View Profile

Snow and ice management can be a difficult industry to be a part of, especially when Mother Nature throws a curveball and delivers a little-to-no snow season. The 2011-12 season proved difficult for many, as snowfall totals were significantly down all over the United States and Canada. Looking ahead to 2012-13, snow contractors will have other issues besides a lack of snow to think about, including competition from other entities, liability and managing costs.

SIMA and Snow Business magazine recently completed their State of the Industry 2011-12 Winter Season survey, collecting more than 300 responses from contractors across the United States and Canada. One question paints a good picture of challenges expected: What single trend do you think will have the most impact on your snow/ice services business in the 2012-13 season? Responses included:

Lack of snow (45.2 percent)
Increased competition — from snow and ice companies entering the market or from national and/or regional service management companies entering the market (23.4 percent)
Competitive pricing (7.5 percent)

In spite of these challenges, there are great opportunities for success in the industry if you approach it as a professional, viable business.

What Happens if It Doesn’t Snow?

Nothing has proven the unpredictability of weather more than the past few winter seasons. From heavy snows one year to a non-existent season the next, it has become harder and harder to predict what will happen in any given season. This unpredictability can make equipment and materials purchasing, staffing and preparation difficult for snow contractors. The low snow winter was a common thread in the State of the Industry survey:

94.4 percent of respondents reported “less than average” snowfalls vs. 72.1 percent reporting “more than average” or “far more than average” in 2010-11.
62.8 percent reported “lack of snow” as one of their top three business challenges in 2011-12.

The lack of a true winter was quite a change from previous heavy snow seasons, and while some companies struggled, others were able to do well due to solid planning. Preparation goes a long way in this industry, and there are things companies can do to protect themselves, whether or not next season is above or below average, including:

Analyze weather trends/data. Despite its unpredictability, there are patterns in weather, and tracking current trends in your region can help predict future ones to a certain extent. The more you know about your local climate and weather patterns, the better prepared you might be.
Review/revise contracts. Contract revisions for abnormal weather could include proactive agreements and provisions for below-average or above-average snow seasons. Revisions might include adding a floor/ceiling pricing structure for seasonal contracts or readiness fees for per-occurrence and time-and-material agreements. Having a balanced portfolio of different contract types can also help protect margins. 54.6 percent of State of the Industry respondents plan to adjust their portfolio balance for the coming season.
Develop an overhead cost recovery plan. If it doesn’t snow, think about what other services you can sell. Other services you could provide include demolition, painting, hauling, cleaning, etc.

Having a plan in place for an average season as well as for the lower and higher seasons is the key to remaining steady when you aren’t sure what winter, or a lack thereof, will bring.

Staying Front and Center in an Increasingly Competitive Industry

The second and third biggest challenges from the State of the Industry survey (increased competition and competitive pricing) prove that snow and ice management will always be a necessary service, even after a year of low snow. As the market becomes more crowded, it has never been more important for companies to set themselves apart. There are several key issues facing the industry right now, but the following standards are a good place for any professional snow and ice management company to focus on.

Efficiency and Managing Costs

Having a detailed knowledge of costs and running an efficient operation will help keep your company on track and ready to service customers at a moment’s notice. Efficiency in the following areas is important in keeping control of costs and in servicing sites timely and correctly: route planning and optimization; training staff; monitoring and documenting employee/sub-contractor performance; using equipment correctly and efficiently; and utilization of new technologies that increase efficiency.

Documentation and Liability

Strong record keeping practices and liability issues go hand-in-hand. Unfortunately, slip and falls are always a possibility during the dangerous winter months, but strong documentation can make a big difference in the outcome of any liability issues. Record keeping basics include keeping track of all the details of service (date, time, onsite conditions, etc.), processes for collecting, organizing and retrieving documentation and having response plans in place in case of a slip and fall incident.

Insurance

Proper insurance is a necessity for snow and ice management. While it can be challenging to get coverage due to liability, understanding policy types and having options to review is a good business practice. Make sure you are educated as to the requirements in your state/province and be as proactive as you can in communicating your safety, documentation and operations policies to your carriers. At the very least, make sure that your insurance coverage is snow-specific. If your insurance carrier doesn’t know you do snow, you are taking a major risk.

Education and training in these areas and others can keep costs in check while allowing you to service as efficiently as possible.

Awareness

In addition to having solid processes and business practices, it is becoming increasingly important to develop professional relationships with consumers of your services. SIMA has been working on several initiatives to develop communication between property/facilities professionals and snow professionals. At the SIMA Snow Strategies Forum in August 2012, a structured dialogue between a panel of high-level property/facilities professionals and snow professionals occurred, where each side shared insights into the work they do. Outcomes included:

Snow Is Unique

Both sides agreed that snow is a unique service, different from anything else in exterior maintenance. Due to its unpredictability and immediate safety issues that can arise, snow and ice management is unique and needs a specialized, qualified, professional response.

Metrics Are Key

Many from the consumer panel stressed the importance of simple metrics to help them understand and manage the challenge of price vs. quality when purchasing snow services. SIMA and snow contractors have begun to work on defining these to take some of the complexity out and make hiring a qualified snow services provider easier for consumers.

Keep It Simple

One of the most obvious insights gained was the need for simple solutions. Although snow and ice management is a complex field, training and education on both sides can lead to simpler solutions that will foster a better industry all around. There are many opportunities to create a competitive, diverse and entrepreneurial market that rewards innovation, competes on efficiency and is respected by consumers, peers and the public at large.

As these two diverse groups begin to understand one another better, finding a professional snow contractor and getting the work done will be easier and will lead to improvements in everyone’s main goal: keeping the public safe and sites open during the winter season. The landscape of snow and ice management seems to change on a yearly basis depending on trends, the economy and the weather. However, focusing on standards and efficiency, facing challenges head on and developing good relationships with consumers can allow any company to be successful in an unpredictable industry.

Ellen Kobach is certification and communications coordinator and Brian Birch is assistant executive director at the Snow and Ice Management Association (SIMA), based in Milwaukee.