As most people hunker down at the sound of another winter weather
warning, snow and ice management contractors are out reaping 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.” But 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-flavoured 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 the 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 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). And 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 money-making machine. For 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 customer base. When he 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 de-icers, such as magnesium chloride or calcium chloride, provide options for treating ice more effectively in cold temperatures. The contractor may also consider pre-treatment 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 cases. While many companies are cutting costs, they continue to allocate sufficient funds toward having their properties de-iced, 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 de-ice 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 favours spreading. For every time a contractor plows, he 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 take only a quarter of the time required to plow the same area, so a mid-sized 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 pounds 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 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 pounds of salt per snow event. Figuring salt at seven 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.
Frost bitten, twice shy
Although spreading seems to be a natural extension of snowplow services, many contractors shy away from anything other than plowing. They easily understand how to push snow but possess a fear of the unknown when it comes to spreading. They’re unsure of what materials to use, what equipment to buy or how much to charge.
When starting a spreading service, a contractor must take some time to learn about the available materials. For instance, limestone chips and sand work well for increasing traction, but do nothing to eliminate the ice. On the other hand, rock salt, calcium chloride, potassium chloride and magnesium chloride actually melt the snow and ice, but they differ by the temperature at which they lose effectiveness. Other substances such as urea, ammonium chloride, ammonium sulfate and other fertilizer-type chemicals are used for their economical value, but aren’t as effective as the previous examples.
Manufacturers of ice melters provide information on the application rate for their product, but they usually state it as a broad range. From there, it’s up to the contractors. They must consider several variables to decide if they need to spread at the lower end, higher end or somewhere in the middle of the provided range. For example, a contractor will need to spread at the higher end if snow will continue to fall for several hours rather than several more minutes. Dry snow will also require more ice melt than wet snow. Next, property with heavy vehicle traffic requires less material than one with light traffic, since vehicles help drive material into the snow and ice. Finally, a daytime application requires less material than a night application, since the sun helps to melt ice during the day.
As the conditions dictate the materials used, materials also influence the equipment decision because some spreaders do not handle certain products as well as others. For example, gravity-fed units are not ideal for sand, which tends to clump together and needs some help to discharge evenly. The corrosive nature of de-icers makes durability another important factor in a purchase decision, so stainless steel and poly-constructed units are usually a better choice than regular steel spreaders.
One of the most important considerations in equipment purchases is size. A spreader that is too small for the job will lead a contractor to waste time with constant refills, but on the other hand, some contractors let their ego get in the way and automatically purchase the biggest available unit, even if it is overkill for their operation. However, the size of the spreader should solely rely on the size of the job. If one typically services driveways, sidewalks and other small residential applications, then a small tailgate spreader may be best. Likewise, for mall parking lots or other large commercial or institutional facilities, a larger, v-box style or replaceable tailgate spreader may prove to be more effective.
Finally, control is one of the keys in equipment selection. Gravity-fed units may be cheaper, but they give the operator limited control on the rate of material discharge, and the vehicle’s gas pedal is the only way to manage it. The next step higher is a conveyor system, but controlling the material rate on these units requires a balancing act between the gate height and conveyor speed. For maximum control, auger-fed spreaders are best, allowing the operator to accurately adjust material rate from the cab.
With a little help from my friends
As with many other things, some of the best ways to learn about the industry is through contact with people already in the business. Other snow and ice contractors are a great source of information when it comes to spreading since they have learned through experience. Because there is enough work for everybody, many local contractors are willing to give advice to colleagues in the community, and contractors across the country constantly tap into each other for information via online message boards.
For those who are still weary of getting their feet wet, there are many seminars available to help them realize that the only thing they really have to fear is the lost profits from not offering a full service. Some spreader manufacturers like SnowEx offer these seminars to help both seasoned professionals and newcomers understand the business side of the snow and ice industry. They cover many aspects, including information on contracts, pricing, materials, equipment and basically everything else a contractor needs to know. In turn, the manufacturer is left with satisfied customers who are more likely to succeed.
As the seasons change, so does the trend in snow and ice management. Spreaders are becoming more popular, and for good reason. By pairing one with a plow, the result is a combination that’s both powerful and profitable. Now is a perfect time to update your arsenal because although recent winters have been rough, Mother Nature is expected to return in full force for several years to come. If armed with both plow and spreader, you’ll be prepared to take full advantage, and while others sing of a “White Christmas,” you’ll be humming the tune of “I’m in the Money.”
For more information about snow and ice management and de-icing products, visit http://www.snowexproducts.com.
Barry Truan is sales coordinator for TrynEx International.
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