Use data to make better decisions for your snow business

Good data in… good data out. When we focus on making data-driven decisions, we don’t need to rely on our gut or emotion.

You can have the best operations in the industry, literally catch snowflakes before they hit the ground, and go out of business tomorrow. Without a healthy balance sheet, you’re dying.

Every account needs to be profitable. We need to quickly fire clients that cost us money — and you’ll only be able to do that if you are tracking the data and running good reports. If you didn’t start this process with good data, then you will continue making emotion-based decisions and hoping for success. Hope is not a good strategy. Do you know the profit margin of every site you performed last season?

Data-driven decisions

The best way to do that is to have a good estimation program. Protecting life, property and production in the winter starts in June. With a good program you will be able to forecast your upcoming season. You can know your equipment and personnel needs ahead of time, enabling you to make data-driven decisions when spending money or signing additional contracts. Gone are the days of saying “I think we should buy another piece of equipment.”

Have confidence in your bids, know your equipment needs, fire bad clients and know what customers to go after next year. Here’s how:

Know your costs. Have a budget and understand where you are breaking even and how much profit you will make. A good place to start is with your costs. Do you know your hourly rates for equipment? Your material costs? What about overhead? Without this type of essential data, you are throwing spaghetti at the wall to see what sticks.

Know your production rates. Determine how long it takes and what equipment is needed to perform a 2-4”, 6-10” and 10-14” event. Get a climatological history to know how many of these events you get on average. Add a difficulty scale (e.g., easy to complex sites) and consider the level of service for each site.

Base everything on area. The first step is always measuring. Knowing the square footage or acreage is important because all sites are different. Plus, you need to know this for estimating your salt applications.

Build a program. Put it all together to create formulas to help you bid with confidence. You’ll know the equipment and labor needed for the upcoming season and will have benchmarks to grade the season and reports to make decisions for next year.

You will not be able to scale your snow business without a good estimation program. If every bid goes through your gut, then you will never be able to standardize a process and a procedure. You will never truly know why you had a good or a bad season and won’t have the information needed to improve.

You can’t improve what you don’t measure. Think about how much time you would save if you were able to streamline your bidding process or even pass that important job to someone on your team. Set the budget, build the estimation program, create an equipment list, track sales and run good reports. This is how you can grow.

Getting started

Use and track data to your benefit. Many free resources can help you do it. Google Earth or an app paired with Excel or even a notebook is an easy way to start. There is also great subscription-based software to track the data. Either way, snow is a business so be as serious about administration as you are about operations.

*I’d like to dedicate this article to the memory of my friend James R. Huston. A master of his trade, he helped many land and snow companies across the United States. His consultation was called “Bid with Confidence” and, along with his books, taught me so much. Rest in peace, Jim. 

Need benchmarking help?

The SIMA Foundation’s free Financial Benchmarking Tool for Snow Contractors includes data such as hourly equipment rates, salt pricing, contract types and cost percentages by expense and employee types. You can customize your results by region, company size and more. Learn more at sima.org/benchmark.

 

Dive deeper with StartUp

Visit here to access the “5 Tips for Sales Success,” which takes an in-depth look at the estimating process.

Kevin Mahon, CSP, has been in the snow industry for 23 years and is Director of Operations at Vault Enterprises in New Jersey. Contact him at KMahon@vault-enterprises.com.