Contracts are often a bore, but the perfect snow removal contract will excite your clients, keep them happy, and help you grow every season.
As a small business, one of your main concerns is survival.
Data from the U.S Bureau of Labor Statistics says that 20% of small businesses fail within their first year, and 50% in their fifth year. Needless to say, it is important to protect yourself in order to keep your company alive. A contract is a great place to start, especially when it comes to avoiding misunderstandings on the job or not getting paid on time.
There are many opportunities that a proper snow removal contract can provide for you and your clients, so if you have the equipment, a team of experienced professionals, and the right insurance, this season can be your most profitable, yet.
Here's what you need to know about snow removal contracts and how they can help:
What Should Your Snow Removal Contract Include?
Comprehensive snow removal or snow plowing contracts include a detailed mention of the work included, payment structures, a guarantee of performance and standards, and insurance coverage.
Detailed mention of the work should show specifics on sanding, salting, and removing snow. The contract should also talk about the type of equipment used and the crew members provided. Basically, It should serve as a blueprint of the kind of snow removal contract that the business and contractor see as the best fit, whether that means a per inch, per event, per push, time, or seasonal agreement.
The contract establishes the overall performance of your snow removal business and tells your clients how their needs will be handled. After that, response times to snow removal should be consistent for each snowstorm. Finally, having reliable business insurance can build trust with your client by protecting everyone involved throughout your partnership.
It is essential to be clear on each section as this will strengthen your relationship with clients.
The Different Types Of Snow Removal Contracts
There are various contracts to consider for your snow removal business.
- Seasonal: A seasonal contract makes it easier to plan a budget. Clients pay your snow removal service a fixed amount no matter how many times it snows. These contracts are usually set for three to five years to save time and eliminate a long vetting process every season. If winter is particularly mild one year, it could balance out a heavier winter in the future—a win for both you and your client.
- Pay per push: If pay-as-you-go is the kind of contract your client seeks, this is a better option. This contract is beneficial if the location has constant snow and you have to pay more than one visit per day. As a snow plowing business, you would charge for each visit.
- Per inch: This kind of snow plowing contract relies on brackets of snowfall (i.e. 1-3 inches, 6 inches and under, or 3-6 inches) The inches are determined by local weather stations to avoid disagreements between you and your client. However, it is harder to budget under this contract.
- Per event: You would charge a flat-rate per snowstorm. This could be a beneficial one-time charge in areas that are not as active, but it can be less profitable in areas with constant events.
- Time-based: As a professional, this can be highly profitable as you charge for every event and push by the hour. You can easily manage your budget as you will be the one to set the price. You could also charge by the hour in this type of snow removal contract which could be lucrative when it comes to larger properties. However, certain clients may pressure you to work quickly, which could be dangerous for your employees.
Each contract has its own unique set of advantages and disadvantages. As a snow removal business, you have to take into consideration various elements such as time and location. It may be best to use one contract for a specific client and another for a different one to make sure you are always getting the best deal!
Residential vs. Commercial Services
Commercial and residential snow removal contracts can offer the same services, but there are large differences in how you should set up payments and the tools you need.
- Commercial snow plowing contracts can include apartment buildings, large parking lots, restaurants, or grocery stores. There is more liability tied with these contracts as they themselves are liable for the many people who step in and out of their premises. You will certainly need more trucks, loaders, and manpower, which equals a higher cost.
A seasonal contract may be the best fit for commercial snow removal, in order to create a fair exchange between you and your client. Since seasonal contracts are typically signed for a few years, both parties can benefit at different points due to the overall average of snowfall across time.
- Residential snow removal contracts demand less of both parties, which leads them to be a bit more flexible. Primarily, residential snow removal contracts include a homeowner's property, and they will determine if you need to go to their house several times a day or just a few times a week.
This could translate well with a seasonal, per push, or even a per event contract. A seasonal contract would secure that you are paid even if there is only a couple of snowstorms throughout the season. A per push contract will require them to pay you a set amount each time you visit, which may work best if the location is too sporadic in the amount of snowfall. A per event contract may work best for areas with low volume, but often recurring events.
Keep Your Snow Removal Business Protected With Next Insurance
As a snow removal business, Next insurance coverage can save you money that you may not be able to forfeit immediately as a seasonal business.
Unfortunately, the world can be unpredictable and often litigious, so it’s imperative to plan ahead. While it is true that finding a transparent insurance company that offers tailored coverage can be a hassle—it doesn’t have to be. Next Insurance makes it easy to design the type of insurance coverage you need in just a few clicks! Snow plowing insurance covers bodily harm, property damage, advertising harm, and product completion.
With other insurance companies, any one of these scenarios can become hours of work for a business owner. Not to mention, the entire process can damage your reputation in the meantime. Next Insurance makes it easy to sign-up, make changes and file claims online, which means you can focus on building success, rather than getting snowed-in with paperwork.