June 21, 2013

Presented by Chad ReinholzMarketing ManagerHindSite Software

8 Lessons From the Snow Industry Benchmark Survey

Demographics

Demographics

Demographics

1. 2012/13 Was a Better Year

Grew by 20%+37%

Grew by 11-20%12%

Grew by 6-10%13%

Grew by 1-5%11%

Stayed the same13%

Decreased by 1-5%4%

Decreased by 6-10%2%

Decreased by 11-20%

3%

Decreased by 20%+

5%

In the 2012-2013 snow season, the number of snow events:

“We actually had a normal season, it grew considerably from last years small number of snow events.”

Snow Events Were Up, Generally

“This is the most snow that fell in the last 10 years of our snow clearing and hauling business.”

Which Led to an Increase in Revenue

“Revenue would have been better but this was the year chosen for multiple problems with my fleet. No matter how many preventive measures are taken, you don't know what's gonna happen let alone when it'll happen. I'm confident next season will be better.”

“A 65% increase in snow events yields a 65% increase in revenue.”

Which is Leading to More Spending

“I would like to increase in a couple areas but mainly in software. Although I've been offering/doing snow removal for a few years, the economy has taken a toll on myself as it has for other's as well. Trying to recoup when possible is becoming a little more difficult at times, especially after this previous season of break-downs. Sinking money into other equipment for preventive measures does not leave much for improvement of other things needed.”

“With increase in properties we will be adding equipment and looking at software for increased productivity.”

2. Examine Your Margins

Margins over 20% are normal.

“Snow plowing is not profitable. It just turns dollars through the bank and keeps a couple employees busy in the off season.”

“Even though snow removal only accounts for approximately 10% of our revenue, it is the largest profit margin next to lawn applications.”

There are Regional Differences.Profitability by Region

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NE SE Midwest SW W Canada

40+

31-40%

21-30%

11-20%

0-10%

And the Size of the CompanyProfitability by Peak Employee Size

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1-5 Peak Employees

6-10 Employees

11-20 employees

21-30 Employees

31-50 employees

51-100 employees

100+

40+

31-40%

21-30%

11-20%

0-10%

3. Consider Your Prices

Half of Respondents Will Increase

“Increase in fuel price means that salt and transportation will increase. With this means an increase in price to the customer so that the business will continue to make money.”

“Costs continue to increase. Rates need to be increased to help cover these increases. An improved economy should help these increased costs be accepted.”

“Increased competition, can’t raise without losing.”

Think About Your Pricing Mix

“This balance is key depending on the type of weather in your market. Our markets have unpredictable weather from year to year making it crucial to have the right balance.”

“My contracts are all per event and it is based on a 3" or more snowfall. Anything less I only go if requested.”

“We ate our shorts this year going all monthly, however, I expect to take some more huge risks while running this business.”

4. You Need to Do It All

Odds Are Your Competitors Do It All

“Providing as much as possible eliminates the potential of having to lose a customer due to something minor. Again, not getting ahead of yourself allows you to offer more to the customer.”

“We also provide hazard assessments to generate additional revenue on non-snow event days.”

“All services, besides roof shoveling, are offered.”

On Every Property Type.

“Residential is not worth the travel time.”

“In the past we have been 100% commercial, but residential has become the dominant revenue source in recent years.”

“Residential: 10% and dropping. Just a few short years ago, residential represented 50% of my business.”

5. Snow Businesses Change Once they Have About 10 Employees

They Hire an Office Manager

And Start Using Field Software

Their Margins Improve.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1-5 Peak Employees

6-10 Employees

11-20 employees

21-30 Employees

31-50 employees

51-100 employees

100+

40+

31-40%

21-30%

11-20%

0-10%

And Their Marketing Tactics Are More Sophisticated.

6. Think Beyond Word of Mouth

Word of Mouth is King

There’s Plenty of Opportunity

And Lots of Advice.“I would tell another snow removal company to spend some time and money and get a good company to help with marketing. I am not the best at marketing and I think it hurts us some with winning bids and promoting ourselves.”

“Be prepared to explain what your ‘differential advantage’ is and do not criticize your competition.”

“Make some effort to advertise. Not advertising is advertising for disaster. Doesn't matter what, do something.”

“I feel direct marketing is the best method. Instead of hoping your target clients see your ads/website, go directly to them.”

7. SIMA is THE Source for Education.

SIMA is King.

“Join SIMA and learn as much as you can about snow removal. There is a lot more to the snow removal business than just a truck and a blade. ”

“Join SIMA...Ask your mentor questions, keep in touch with him or her over the years. On our second snow season I had more meaningful questions than I did before I started. Understand that most successful people want to teach and help you grow, it is only the bitter contractors that want to burn your equipment and steel your employees. The good contractors will send over their right hand man or a piece of equipment when you’re in a pinch. Stay stubborn and stay in the game of being an entrepreneur.”

8. Grow Your Revenue With Software

Those using field software were more likely to have grown their revenue.

Download the SnowIndustry Benchmark Report

http://www.hindsitesoftware.com/2013-snow-industry-benchmark-report-sima.cfm