Knowing how much to charge for snow removal is crucial to the success of your business. Price too high, and you might lose clients to competitors. Price too low, and you risk operating at a loss.
This comprehensive guide will help you navigate the complexities of snow removal pricing, ensuring you can build a profitable business while providing excellent value to your clients.
Price Your Snow Removal Services In 10 Minutes Or Less
Use historical snowfall data to inform your snow removal pricing
Consider including a clause for "excessive" snowfall (set a limits for events, pushes, and inches)
Multi-Seasonal Contracts
A multi-season contract is a longer-term contract, which usually happens in commercial plowing. While it's not common in residential, you could make it work.
This model should include an annual rate increase of AT LEAST 10-15% to account for costs increases and inflation.
For example, travel, labor, and equipment costs have risen by about 19% over the past few years. Always account for these costs in your multi-seasonal contract.
Pros:
Can cultivate very profitable long-term relationships with clients
Cons:
Challenging to develop and calculate
Requires a good history, trust, and rapport with clients
3. Per-Inch Pricing
This method involves setting a base rate for a certain amount of snowfall and charging additional fees for each inch above that threshold.
Much like per-push, this is when you charge per inch that's cleared.
Pros:
Flexible model that allows you to set the rate per inch
Closely correlates with the amount of work required
Can be mutually fair for both your business and the client
Cons:
Requires precise measurement
Can be complex for clients to understand
Involves extensive experience and is challenging to calculate
Consider a cap or different rate for extreme snowfalls
4. Hourly Rates
Charging by the hour is straightforward but less common for residential properties.
Hourly pricing is a simple method, especially for job costing. You'll charge for your time on the job per person. Then, you'll bill every event and push by the hour.
Specialized equipment operation: $100-$200 per hour
Pro Tips:
Be transparent about your time tracking methods
Consider minimum charges for small jobs
5. Per Event
Charging per event means you charge per event. Which means, even if you push multiple times during the event, you'd still only charge once.
Pros:
Lucrative for low volume events
Cons:
Not profitable for heave volume events
You don't get paid if it doesn't snow
Pricing Strategies for Success
Tiered Pricing: Offer different service levels at varying price points. For example:
Bronze: Basic snow removal
Silver: Snow removal + walkway clearing
Gold: Snow removal + walkway clearing + de-icing
Early Bird Discounts: Offer discounts for customers who sign up early, helping you secure business before the season starts.
Multi-Year Contracts: Provide slight discounts for customers who commit to multi-year contracts, ensuring stable long-term income.
Referral Programs: Incentivize current customers to refer new business by offering discounts or credits.
Bundled Services: If you offer other seasonal services (e.g., lawn care), create packages that include snow removal at a slight discount.
Setting Your Prices: A Step-by-Step Guide
1. Calculate Your Costs
Use the cost categories outlined earlier to determine your break-even point.
You'll compute job length based on the hours it would take one person, working alone to complete.
This way, you can divide by the number of crew members to get an accurate gauge of how long it will take, real-time, even if the crew size changes.
Plus, easily access your average snow removal times for similar job using the right snow removal software.
With Service Autopilot you can quickly see how clients align with your profit goals. In turn, you don't have to spend hours crunching numbers on a calculator.
2. Research Your Market
Understand what competitors are charging and what customers in your area expect to pay.
The profit you're able to generate largely depends on the level of demand in your area. For this reason, it's important to see what your competitors are charging.
While you shouldn't base your prices on the competition, it's important to be aware of what's going on in your market.
3. Determine Your Desired Profit Margin
Decide on a fair profit margin, typically 50% for the snow removal industry.
Even though profit setting goals vary from business to business, these are the main factors influencing how much profit you can get from your local market:
How much are clients willing to pay for snow removal?
See what competitors are charging to gain a general consensus.
Fully evaluate every property each new snow season
Also, keep in mind, you can utilize different pricing models as you deem fit for the job. Usually, it's best to apply different models to different clients to ensure maximum profits no matter the weather.
5. Adjust for Property-Specific Factors
Develop a system for adjusting your base rates based on property characteristics and service level.
When pricing snow removal services, it's crucial to consider the unique characteristics of each property. A one-size-fits-all approach can lead to undercharging for difficult jobs or overpricing simpler ones.
Here's a brief overview on a few property-specific factors you'll want to consider when considering how much to charge for snow removal:
Property size:
Measure the area that needs clearing (driveways, parking lots, sidewalks)
Establish a base rate per square foot or square yard
Use a sliding scale where the per-unit price decreases for larger areas
Property type:
Residential: Usually smaller, but may have more detailed work (clearing around vehicles, walkways to doors)
Commercial: Larger areas, higher liability, may need to be cleared before business hours
Industrial: May require heavy equipment, could have hazardous areas
Surface type:
Asphalt: Generally easiest to clear
Concrete: Similar to asphalt, but may require more care to avoid scratching
Gravel: Requires special equipment or techniques to avoid displacing gravel
Pavers or decorative surfaces: Require extra care and possibly hand-clearing
Terrain and obstacles:
Slopes: Increase difficulty and risk
Tight spaces: May require smaller equipment or hand-clearing
Obstacles: Cars, planters, or other items that need to be worked around
Multiple levels: Such as multi-tiered parking lots or properties with both driveways and upper decks
Accessibility:
Distance from your base of operations
Ease of access for your equipment
Whether you need to clear a path to reach the main clearing area
Service level requirements:
Trigger depth (how much snow accumulates before you start clearing)
Response time
Thoroughness (clearing to bare pavement vs. leaving a thin layer)
Frequency of clearing during ongoing snowfall
Additional services:
De-icing application
Snow hauling
Roof snow removal
Hand shoveling of steps or walkways
Time of service:
Regular business hours
Early morning or late night
Weekends and holidays
6. Include Clauses for Exceptional Circumstances
Address how you'll handle extreme weather events or other unusual situations, such as:
Property damage
Liability limitation
Contract termination for exceptional circumstances
Price adjustments for extreme snowfall and material shortages
Remember, while these clauses protect your business, they should be balanced with a commitment to providing excellent service.
Your goal is to create a fair agreement that allows you to maintain a sustainable business while meeting your clients' needs, even in exceptional circumstances.
7. Develop a Clear Contract
Clearly outline your services, expectations, and pricing structure in a professional contract.
These are a few essential elements to include in your contracts:
Services to be provided
Terms of the contract
Pricing and payment terms
Service provider responsibilities
Client responsibilities
Limitation of liability
Dispute resolution
Confidentiality
Modifications
FREE CONTRACT TEMPLATE
Streamline communication between your business and clients!
Be prepared to explain how you arrived at your prices
Remember, the lowest price doesn't always win. Many clients are willing to pay more for reliable, high-quality service.
Pricing for Commercial Properties and Parking Lots
As you know, commercial properties take more time and materials than residential drives. In turn, you'll need to consider the size difference between a residential driveway and the average parking lot.
However, there's more to it than size:
Will there be cars parked in the parking lot?
Will you need a skid steer to push and lift snow?
Will they demand emergency clearing during a snow event?
E.g. hospitals, commercial centers during business hours, etc.
If you don’t have a way to service everyone, you’ll end up skipping and/or juggling properties. Additionally, this will burn out overwork your crew, and anger clients.
Since snow is a demanding business with long work hours, it's important to do you best to remain dependable with consistent high-quality snow removal services.
Plus, clients are likely willing to pay more for these reliable high-quality services.
Automations is the #1 way to follow up with clients. If you’re not using it, your business might still be successful - but it won’t grow.
Exploring how much to charge for snow removal doesn't have to be a complex process.
This article has shown you a simplified process of how much to charge for snow removal based on profit. Plus, use this information to help determine how much to increase prices on existing clients.
AS ALWAYS, check in with your trusted CPA (i.e. Certified Public Accountant) before launching any new pricing changes.
Now, you know how much to charge for snow removal to meet profit goals and grow your business today!
Lisa Marino is the Sr. Marketing Director for Service Autopilot. She uses her 17+ years in direct marketing, sales, and product development to push entrepreneurs beyond their limits. She's passionate about helping others grow their businesses through time-tested marketing techniques. When not writing, you can find her belting out a mean Stevie Nicks at a local karaoke night.
